Your friend has prepared his monthly budget and asks you if he has overlooked anything in his planning. Which of the following questions points out his most serious omission?

\begin{tabular}{|c|c|c|}
\hline
& Cash Inflows & \\
\hline
1 & Disposable income & \[tex]$4,165 \\
\hline
2 & Interest on savings & \$[/tex]0 \\
\hline
3 & Income from stocks & \[tex]$50 \\
\hline
4 & Total Cash Inflow & \$[/tex]4,215 \\
\hline
& Cash Outflows & \\
\hline
5 & Mortgage & \[tex]$1,000 \\
\hline
6 & Homeowner's Insurance & \$[/tex]60 \\
\hline
7 & Car payment & \[tex]$373 \\
\hline
8 & Car insurance & \$[/tex]125 \\
\hline
9 & Stock purchases & \[tex]$200 \\
\hline
10 & Life and health insurance & \$[/tex]150 \\
\hline
\end{tabular}



Answer :

Let's analyze your friend's monthly budget to identify any potential overlooked items. The data available provides the following details:

### Cash Inflows:

1. Disposable income: \[tex]$4165 2. Interest on savings: \$[/tex]0
3. Income from stocks: \[tex]$50 4. Total Cash Inflow: \$[/tex]4215

### Cash Outflows:

1. Mortgage: \[tex]$1000 2. Homeowner's Insurance: \$[/tex]60
3. Car payment: \[tex]$373 4. Car insurance: \$[/tex]125
5. Stock purchases: \[tex]$200 6. Life and health insurance: \$[/tex]150

Total Cash Outflow: Adding the provided outflow items:

[tex]\[ \$1000 + \$60 + \$373 + \$125 + \$200 + \$150 = \$1908 \][/tex]

After subtracting the total outflow from the total inflow, we find the remaining balance:

[tex]\[ 4215 - 1908 = 2307 \][/tex]

### Analysis:
The remaining balance of \$2307 suggests that your friend still has money left over after accounting for the listed expenses.

However, there is a potential oversight in the budget. While he has considered essential expenses such as mortgage, insurance, car payments, and stock purchases, he has not accounted for:

1. Daily living expenses: This includes groceries, utilities, transportation costs (beyond car payments), dining out, entertainment, and other miscellaneous expenses.

2. Savings or emergency fund: There is no mention of an allocation for additional savings or an emergency fund, which is crucial for financial stability.

3. Unexpected expenses: Things like medical emergencies, home repairs, or any other unplanned costs are not accounted for here.

### Conclusion
The most serious omission in your friend's budget is the exclusion of daily living expenses and savings/emergency fund. These are vital elements of a comprehensive budget as they cover the day-to-day costs of living and provide a safety net for unexpected events.