To determine the simplest change that can be made to the budget to produce more savings next month, let's analyze the details of the monthly budget.
Given:
- Net income: Budgeted [tex]$400.00, Actual $[/tex]375.00
- Total income: Budgeted [tex]$400.00, Actual $[/tex]375.00
- Rent: Budgeted -[tex]$200.00, Actual -$[/tex]200.00
- Bus pass: Budgeted -[tex]$20.00, Actual -$[/tex]20.00
- Total fixed: Budgeted -[tex]$220.00, Actual -$[/tex]220.00
- Food: Budgeted -[tex]$75.00, Actual -$[/tex]125.00
- Discretionary: Budgeted -[tex]$30.00, Actual -$[/tex]50.00
- Total variable: Budgeted -[tex]$105.00, Actual -$[/tex]175.00
- Savings: Budgeted [tex]$75.00, Actual -$[/tex]20.00
We need to determine which change can be made to increase savings, considering the discrepancies between the budgeted and actual values. Let's examine the options:
1. Add to fixed expenses: This would not help increase savings as it would instead decrease them by increasing the amount of money spent on fixed costs.
2. Decrease food expenses: The actual food expenses ([tex]$125.00) are significantly higher than the budgeted amount ($[/tex]75.00), suggesting that this increase in expenses has impacted the savings negatively. Reducing food expenses back to or closer to the budgeted amount would help increase savings.
3. Reduce rent payments: The rent payments are already matching the budgeted amount, so reducing them would not be a simple change as it might not be feasible or possible.
4. Increase total income: While increasing total income would indeed result in more potential savings, this may not be considered a "simple" change as it requires earning additional income which might not be immediately possible.
Given these options and the details in the budget, the simplest change that directly targets an area with a notable discrepancy is to decrease food expenses.
Decreasing food expenses would reduce the overspending in this category, bringing it closer to (or within) the budgeted $75.00, and thus increases savings next month.
