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Alberto & Fatima's Spending Plan

Alberto and Fatima have two children and can't seem to save any money in their bank account for emergencies or for their children's college fund. They decide to keep all of their receipts for one month to see how they are spending their money.

After reviewing their spending, they decide to apply for government benefit programs and cut back on certain expenses. Let's see their spending plan.

Income:

 

MONTH 1
Tracking spending

 

MONTH 2
Starting to save

   

Monthly Income after Taxes

 

 $2,400

 

$2,600

 

Fatima finds a better-paying part-time job through the NYC Workforce 1 program.

Child Support/Alimony Received

 

 $0

 

 $0

 

Unemployment Insurance/Pensions

 

 $0

 

 $0

   

Government Benefits

 

 $0

 

$300

 

Alberto applied for Section 8 Housing Assistance and receives a $300 voucher.

Other Sources (Odd Jobs, Informal Work, etc.)

 

 $0

 

 $0

 

TOTAL INCOME:

 

 $2,400

 

$2,900

   
Fixed Expenses:            

Rent (includes utilities)

 

$1,200

 

$1,200

 

These are "fixed expenses" that usually won't change.  However, after reviewing their monthly spending, Alberto decides to cancel his magazine subscriptions since he can read magazines online for free.

Phone Service (Land Line and Cell Phones)

 

$50

 

$50

 

Transportation (Subway/Bus/Car Service)

 

$80

 

$80

 

Transportation: Car Payments and Gas

 

 $0

 

 $0

 

Insurance Payments (Health, Car, Home, etc.)

 

 $0

 

 $0

 

Memberships/Subscriptions (Gym Membership, Newspaper/Magazine Subscriptions, etc.)

 

$10

 

 $0

 

Savings (Retirement, College, Emergency)

 

 $0

 

 $0

 

Flexible Expenses:

           

Groceries

 

$200

 

$350

  By cooking at home more, their grocery bill increases, but the total money spent on food is less than the prior month.

Meals Out

 

$400

 

$100

   

Child Care

 

$200

 

$0

 

Fatima finds out that they are eligible to enroll their children in the Administration for Children Services (ACS) child care program for free so they don't need to pay for a babysitter.

Credit Card Bills

 

 $100

 

 $100

 

Minimum monthly payment due to credit card company for expenses, including entertainment items, such as movie tickets, and clothes.

Other Loan Payments (Student Loans, Rent-A-Center Loans, etc.)

 

 $0

 

 $0

   

Transaction Fees (Check Casher, Money Order, Banking, Bill Payment and ATM Fees)

  $5  

 $0

 

Alberto and Fatima decide to open a bank savings account and set up free direct deposit of their paychecks so they avoid check cashing fees.

Cable TV and/or Internet

 

 $120

  $50  

Eliminating expenses such as cable allows the family to have extra money to spend at the end of the month.  In addition, using cash to pay for entertainment items and clothing reduces the amount of interest and fees from credit cards in the long run.

Entertainment (Movies, CDs, etc.)

 

 $0

  $30  

Clothes

 

 $0

 

 $30

   
Money to Family or Friends  $50  $50

Donations (to Charity, Church, etc.)

 

 $5

 

 $5

   

Other Expenses

 

 $0

 

 $0

   

TOTAL EXPENSES:

  $2,400  

$2,045 

   

FINANCIAL SUMMARY: 

 

$0 

 

$855 

  This is calculated by subtracting TOTAL EXPENSES from TOTAL INCOME


GOAL ACCOMPLISHED!
By increasing income and reducing expenses, Alberto and Fatima have $855 left over every month.  They apply some of it to pay their credit card debt and to start building savings.  



  • Creating a spending plan lets you see how you are spending your money and where you can cut back to begin saving.  Create your own spending plan
  • By taking advantage of government benefits, Alberto and Fatima are able to increase their income. Even better, at the end of the year they are able to claim the Earned Income Tax Credit.  Learn more about government benefits
  • By spending less on entertainment, such as cable, eating out, and going to the movies (all flexible expenses), you can save a lot toward your goals. Get quick tips on spending wisely