Answer :
Answer:
Wants and Needs:
Wants:
- Buying a new watch.
- Updating her wardrobe.
Needs:
Paying three months' rent in advance, which totals $1,500, for moving out on her own.
Decision and Rationale:
Given Stephanie’s situation, she should prioritize her needs over her wants. Moving out on her own and having the financial stability to pay her rent is crucial. Without securing her living arrangements, she might face significant stress and potential financial difficulties.
Here’s a detailed rationale for the decision:
Financial Stability:
- Securing a place to live is a fundamental need. Not having enough money for rent could lead to significant problems, including potentially not having a place to live.
- The rent payment is a known and immediate need, while her future earnings are uncertain. It's risky to assume she will save enough for rent when she hasn't started her new job yet.
Budgeting and Planning:
- Using the $500 to contribute towards the $1,500 rent helps ensure she has a place to live. She will then need to save $1,000 from her job within the next few weeks, which might be challenging but is more manageable than relying on uncertain future savings for the entire amount.
- Once her essential needs (rent) are covered, she can plan for discretionary spending (watch and clothes) with leftover funds or future earnings.
Avoiding Financial Strain:
- By prioritizing her rent, Stephanie avoids the risk of being unable to meet her essential financial commitments. This decision helps her avoid potential debt or the stress of last-minute financial scrambles.
Recommendation:
Stephanie should save the $500 towards her rent. After securing her rent, she can start budgeting from her earnings to plan for purchasing a new watch and updating her wardrobe. This approach ensures her immediate needs are met and allows her to responsibly plan for her wants.
