Personal Monthly Budget - Problem Solving Example

Introduction

The total monthly income is obtained by summing up Income 1 and extra revenue for both projected monthly income to get the value of $4,600 for the projected monthly income and $4,300 for the monthly income. The expenses which including housing, transportation, insurance, food, pets, personal care, entertainment, loans, taxes, savings/investments, gifts/donations as well as legal expenses. The total projected cost is subtracted from the actual cost to attain the difference. A positive difference represents an under budget meaning that the actual cost exceeded the projected expenses and hence implying that the amount that was budgeted for was less that the real cost of the expenditure. Phone, electricity and gas prices, for example, were under budgeted. A difference of zero (0), shows that the projected cost was equal to the actual cost and hence a balanced budget. Water&sewer, cable and water removal, for example, had a difference of zero implying that what was budgeted was what was incurred in actual cost. A negative balance, on the other hand, represents and over budget figure shows that the actual expenditures were less than the estimated cost. Maintenance/repairs, supplies as well as other housing expenses were over estimated. Insurance fee, for example, had a balanced budget where the actual costs were equal to the projected costs.

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Expenses Projected costs Actual costs Difference Comment

Housing $1,272 $1,284

$12 Actual costs>Projected costs Under budget

Transportation $535

$571

$36

Actual costs>Projected costs Under budget

Insurance $212

$212

$0

Actual costs=Projected costs Balanced budget

Food $500

$495

($5)

Projected costs> Actual costs Over budget

Pets $45

$45

$0

Actual costs=Projected costs Balanced budget

Personal care $190

$190

$0

Actual costs=Projected costs Balanced budget

Entertainment $80

$43

($37)

Projected costs> Actual costs Over budget

Loans $345

$345

$0

Actual costs=Projected costs Balanced budget

Taxes $0

$0

$0

Actual costs=Projected costs Balanced budget

Savings&investments $0

$0

$0

Actual costs=Projected costs Balanced budget

Gifts&donations $0

$0

$0

Actual costs=Projected costs Balanced budget

Legal Expenses $0

$100

$100

Actual costs>Projected costs Under budget

The projected balance is equal to projected income of $4,600 minus expenses. Totaling expenses and subtracting the value from actual monthly income of $4,300 gives the real balance. The difference between the actual revenues and the projected balance is equal to the difference. The total projected costs are obtained by summing up all the costs of expenses. Likewise, the total actual costs are equal to the total amount of actual costs. To get the difference, the difference of all expenditures is summed up. On the overall, it is clear that the overall monthly budget outweighed the actual monthly income implying that there was an over budget.