Question

My friend Steve wants to buy something nice for himself. He doesn't know want he wants yet but he is thinking of spending $1,000 on it or more. He makes $500 a month and has a monthly living expense of $325. He also has a lot of bi-monthly subscription payments which costs him $450 every other month ($450 is the bimonthly expenses) . He wants to know when he will be able to buy want he wants and still be able to pay his bills. He can work normal hours or work overtime and earn an extra $150 a month. Other things to consider are the tax rate (which is seven percent) and the amount of money he already has.

Answer 1

No, he cannot spend an extra $1000 because after doing overtime he not even saves any money from his income his monthly expense is $775 and his earning including overtime is $650 so he must be running out of his savings. He's not in a position to spend money and include the tax on his income it's impossible for him to spend extra money he can only do it if he cancel his monthly subscription.

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