Question

Advise the Williams Family The Williams household has compiled the following financial information: • They rent a house in a nicer neighborhood for $1,300/month +$150 utilities • They estimate that they are spending $400 per month on groceries and $1,000 per month on eating out. They own some land and use it to sell hay and timber. This amounts to an average of $1,000 per month They also have a car (valued at $8,000, with loan balance of $11,870, monthly payments of $315), a clunker (valued at $975), and a 4-wheeler (valued at $800, with loan balance of $1,210, monthly payments of $153) Their garden yields roughly $500 of produce per month that they sell They inherited some antique farm equipment that is worth $1,300. Their credit card debt totals $7,000 with monthly payments of $285. Health insurance costs them around $407 per month Checking account has $2,500 on average; savings account has $13,700. Their combined retirement accounts have $121,009. Their total monthly salary is $4,800. They have life insurance ($130), car insurance ($167), and renter's insurance ($45). • They give around $260 per month to charity, spend $150 per month on clothes, and use $320 on entertainment A. Use the balance sheet below to compile the data and calculate total income, total spending and net cash flow. Income/Cash Inflow Cash Outflows Item A mount Item Amount D Total Income: Total Spending Net Cash flow:

Answer 1

Cash Outflow:

1. Rent of house 1300

2. Utilities 150

3. Grocessories 400

4. eating out 1000

5. EMI of car 315

6. EMI of 4 wheeler 153

7. Credit card payments 285

8. Health insurance 407

9. Life insurance 130

10. Car insurance 167

11. renter insurance 45

12. charity 260

13. clothes 150

14. entertainment 320

Total Outflows 5082

b) Total inflows

1. selling proceeds of hay and timber 1000

2. garden yield 500

3. chaecking account 2500

4. saving account 13700

Total Inflows 17700

Net cash flow 12618

2. As per SWOT Analysis:

Family's Strengths LAND,Combined retirals amounting to 121009

Weakness Not having owned house

Oppurtunities amount in saving account

Threats High cost of eating out,entertainment

3. Financial Advice would be to spend lesser on eating out,and entertainment expenses.