Sookie’s take-home pay each month is $3500. She’s not currently contributing to any retirement accounts (such as a 401(k) or a Roth IRA), but she does have a savings account at her bank. For the past four months, she’s been keeping track of her spending and saving, and here are the results:
May -- spent $3200, put $300 into saving
June -- spent $3450, put $50 into saving
July -- spent $3475, put $25 into saving
August -- spent $3250, put $250 into saving She would ideally like to have an emergency fund of $12,000 and save up enough for a big vacation with her friends next August (~$4500). She’s afraid she’ll never get there.

Write a detailed savings plan for Sookie to meet her goals.

Question

Sookie’s take-home pay each month is $3500. She’s not currently contributing to any retirement accounts (such as a 401(k) or a Roth IRA), but she does have a savings account at her bank. For the past four months, she’s been keeping track of her spending and saving, and here are the results:
May -- 		spent $3200, put $300 into saving
June -- 		spent $3450, put $50 into saving
July --		spent $3475, put $25 into saving
August -- 	spent $3250, put $250 into saving She would ideally like to have an emergency fund of $12,000 and save up enough for a big vacation with her friends next August (~$4500). She’s afraid she’ll never get there.

Write a detailed savings plan for Sookie to meet her goals.

b3lla2025 · Answer

do you have an image

b3lla2025 · Answer

@Alexa01

Alexa01 · Answer

No sorry this was all I was given

Alexa01 · Answer

It isn't multiple choice. You have to write out a detailed savings plan for Sookie to meet her goals.

Angle · Answer

@Alexa01

I am honestly not sure what kind of answer you are looking for...

From a real life perspective, I would say that Sookie should create a breakdown of fixed expenses and variable expenses. Items such as rent/mortgage, utilities, car insurance, car payments, gasoline, etc as well as food, clothing, eating out, online shopping, etc.

We would then treat the fixed expenses as a bare minimum piece of Sookie's budget. That she can spend $100 a month on food (eating out is expensive) and look for other areas where she is currently spending her money and look to reduce or replace the spending with a cheaper alternative. (For example, taking Uber everywhere is going to be more expensive than owning a used car).

Once we have created a budget of baseline expenses, we can allocate a specific small amount to entertainment money to keep Sookie sane. Then siphon the rest into the savings and retirement accounts.

The emergency fund is the most important thing to fund first. I guess the vacation is next, 401k up to employer match percent, roth ira, then max 401k

I suppose the question might be asking for a more specific monthly breakdown... but without knowing Sookie's baseline expenditures it would be difficult to answer.

Alexa01 · Answer

Thank you for your help that is way better than I could have done.