To determine the simplest change that can be made to the budget in order to produce more savings next month, let's analyze the budget thoroughly.
Here's a quick breakdown:
### Budgeted Values:
- Net income: [tex]$400.00
- Total income: $[/tex]400.00
- Rent: -[tex]$200.00
- Bus pass: -$[/tex]20.00
- Total fixed expenses: -[tex]$220.00
- Food: -$[/tex]75.00
- Discretionary: -[tex]$30.00
- Total variable expenses: -$[/tex]105.00
- Savings: [tex]$75.00
### Actual Values:
- Net income: $[/tex]375.00
- Total income: [tex]$375.00
- Rent: -$[/tex]200.00
- Bus pass: -[tex]$20.00
- Total fixed expenses: -$[/tex]220.00
- Food: -[tex]$125.00
- Discretionary: -$[/tex]50.00
- Total variable expenses: -[tex]$175.00
- Savings: -$[/tex]20.00
Given the question focuses on producing more savings next month, let's review potential changes that can be made:
1. Add to fixed expenses: Increasing any of the fixed expenses such as rent or bus pass will reduce savings further. This is not a viable option for increasing savings.
2. Decrease food expenses: The food expenses went over budget by [tex]$50.00 ($[/tex]125.00 actual vs. [tex]$75.00 budgeted). Reducing food expenses to be closer to, or even less than, the budgeted amount could result in more available money for savings.
3. Reduce rent payments: Rent is already set at a consistent $[/tex]200.00 and it is a fixed expense. Reducing rent might not be easily achievable depending on lease agreements or local housing prices. This option might not be the simplest change to implement.
4. Increase total income: While increasing income is a possible solution, it often requires more effort like finding a higher paying job or working additional hours. Though beneficial, it may not be the simplest adjustment to make immediately.
Considering all these points, the simplest change to implement in the budget to increase savings is to decrease food expenses. By managing food expenses more carefully, the variable costs can be controlled, and this can quickly produce more savings without affecting fixed essential expenses.
