Question

ike has a net spendable income of $1,400. He decides to set up a budget before looking for an apartment or a car. He sets up his budget and finds that he has lots of money left over. He puts the extra money into entertainment.

Housing $420
Food $168
Transportation $210
Insurances $42
Debts $70
Entertainment $224
Clothing $70
Savings $70
Medical $56
Miscellaneous $70
Why might this budget be a problem?

Answer 1

If he's getting housing for $420 I want to know where he's living at
Also interesting that insurance and medical are separated, maybe a copay or deductible

BUT nonetheless, let's get you in the right direction to solve this question

This is a crucial line in the question
He decides to set up a budget before looking for an apartment or a car

It's really important to first find an apartment and car before you begin to budget. The prices on these can vary a lot and that will effect your budget.

The other thing is, you don't want to budget ALL of your money. You want to leave some extra in case for any emergencies that arise. Maybe you'll get a flat tire so you'll need to buy a new tire. You'll need money for that. So if you budget all your money, you're going to be in trouble whenever an unexpected situation arises. You'd have to slash from maybe entertainment and miscellaneous, but what if it costs more than that? You have to pay your rent and you can't go hungry. So you need to give yourself some extra wiggle room in your budget.

Let me know if that helps any! I'd be more than happy to explain further or check your answer!