To understand Ted's financial situation, we need to first verify the total cash outflows and then consider if there are any components missing from his financial plan.
Step 1: Sum of Individual Cash Outflows
We start by adding up all the individual expenses:
- Rent: \[tex]$3,000
- Utilities: \$[/tex]250
- Satellite dish: \[tex]$175
- Cell phone plan: \$[/tex]135
- Car lease payments: \[tex]$385
- Groceries: \$[/tex]200
- Insurance: \[tex]$380
- Recreation: \$[/tex]700
Adding these amounts together:
[tex]\[
3,000 + 250 + 175 + 135 + 385 + 200 + 380 + 700 = \$5,225
\][/tex]
This sum matches the total cash outflow provided in the table, which is \[tex]$5,225.
Step 2: Verification of Cash Outflows
We have verified that the total cash outflows match the sum of all individual expenses listed. Therefore, the total cash outflow of \$[/tex]5,225 is accurate.
Step 3: Identify Missing Components of the Financial Plan
To have a comprehensive financial plan, Ted's plan should not only account for the regular monthly expenses but also include components that provide financial security and growth. Based on the given cash outflows, we observe that the following essential parts are missing:
1. Savings: This is crucial to build a financial cushion for unexpected expenses or future needs.
2. Investments: Investing helps grow wealth over time and can ensure financial stability for the future.
3. Emergency Fund: An emergency fund is necessary to cover unexpected financial emergencies such as medical expenses, car repairs, or loss of income.
Conclusion
Although Ted's monthly cash outflows are adequately accounted for, his financial plan is missing key elements that are important for long-term financial health. Specifically, he should incorporate:
- Savings: To build a financial reserve.
- Investments: For long-term wealth growth.
- Emergency Fund: To handle unexpected financial crises.
These additions would ensure a more robust and resilient financial plan, helping Ted to secure his financial future.
