Aksa And Shabir Mohammad Case Study

Case Study: Aksa and Shabir Mohammad

Monthly Budget for Aksa and Shabir Mohammad______________________

Gross Monthly Income 10 000

Income tax, CPP, EI, pension (3500)

Disposable Income 6500

Necessities

Student loan payments 800 Rent 1000 Car payments and maintenance 1000 Insurance 600 Cable, internet and phone plans 300 Transit 280 Groceries 400 Clothing 450

Total Necessities 4830

Discretionary Income 1670

Discretionary Expenses Meals out, movies, vacations 1000

Balance 670

Analysis

1a.)

Aksa and Shabir Mohammad have a balanced monthly budget because they have some money left over after all necessities and deductions have been paid off. The balance

Their desire to save up $25 000 in two years for a down payment, is unlikely to happen, as their monthly budget suggests that they will only be able to save $16 080 in two years. At this rate, it would take them three years and one month. However, if they want to save $25 000 in two years, then they would need to increase the monthly budget from $670 to $1041.67. The following are a few recommendations that are provided, to help the couple achieve their savings goal of $25 000 in two years. Firstly, they should work towards setting short term and long term goals which focus on understanding and perhaps changing their spending habits. It would also help to review all the expenses and set goals to help reduce those expenses. Also, reducing and cutting back on discretionary expenses would help as those aren’t needs but wants. Finally, they should cut back on the cost of necessities. For example, they may take public transit more often to cut back on car payments or eliminate long distance calls and change to cheaper service providers. To conclude, by following the above recommendations, Aska and Shabir Mohammad can save enough money in two years for their down