$25 000.00
$19 300.00
$750.00
$600.00
$150.00
$100.00
Sources of Money
VISA with an $800.00 limit and no unpaid balance, 17% interest rate
Two year bank loan at 6% interest
Furniture store offering, Dont pay for 12 months at 28.8% interest
Facts
Gross Monthly Income
Deductions
Income Tax
Employment Insurance
Canada Pension
Monthly Take-Home Pay
Monthly Expenses Lisa has to Consider
Rent/Utilities
Food
Grooming/Hygiene
Telephone
Transportation
Credit Payments
Household Incidentals
Questions (1 mark each)
$2083.00
$362.85
$60.42
$52.41
$1607.32
2. Review Lisas monthly expenses. List any other expenses she might have
overlooked.
Rent- $750
Other- $600
Student Loan Payment- $150
Towards Savings- $100
Emergency Expenses- ?
Gifts for friends-?
Going out/restaurants/movies/entertainment-?
3. Create a list of ways in which she could reduce costs and increase
available cash.
-Carpool to work
-sell unused items
-unplug unused devices
-cancel club memberships
-look for free entertainment options
-cancel unnecessary subscriptions
-meal plan
-do not eat out
-use coupons
-spend less on personal items
-move somewhere with cheaper rent
-consider renting to a roommate for a monthly rent
4. Imagine you are asked to advise Lisa. What would you say to her? Which
is her best option and why?
I would advise Lisa to request a loan for a monthly fee she is certain she can pay,
while at the same time lowering her monthly expenses with the tips above. This
way, by consistently paying off her loan, Lisa is building up good credit, she quickly
gets her furniture, and her monthly expenses are lower so she is not under too
much pressure to budget.
$25 000.00
$19 300.00
$750.00
$600.00
$150.00
$100.00
Options
1. Buy a new Honda Accord @ $25 600.00 + tax = $29 184.00
2. Lease an Accord @ $370.00/month + tax = $426.00 per month for four years
3. Buy a used, four year old Honda Accord @ $16 000.00 + tax = $18 400.00
Additional Costs
Insurance, repairs, maintenance and fuel for the year = $5400.00
Facts
Gross Monthly Income
Deductions
Income Tax
Employment Insurance
Canada Pension
Monthly Take-Home Pay
$2083.00
$362.85
$60.42
$52.41
$1607.32
1.
a.
b.
c.
d.
e.
Household Incidentals
Questions (1 mark each)
List at least 5 options for Lisa to consider concerning transportation.
wait to purchase a car until you have gotten into a more natural pattern of paying
your monthly expenses.
use public transportation
borrow a car from a close friend
get a loan from the bank
put savings towards your car
technology
warranty
https://smartasset.com/auto/the-pros-and-cons-of-buying-a-new-car
http://www.silverstatecu.com/life-planning/buying-a-car/pros-and-cons-of-buyingused-cars.aspx
4. Imagine you are asked to advise Lisa as to her best transportation option.
What would you tell her? Why?
Again, I would advise Lisa to plan with her banker. They are the professionals and it
is their expertise that will contribute the most towards a safe investment. I would
suggest that Lisa make a strict and solid budget and carefully evaluate whether it is
safe to purchase a vehicle.