- Calculate total spending: \(\$35 + \$98 + \$500 + \$140 = \$773\).
- Compare spending to income: \(\$773 > \$750\).
- Identify that Dan is over budget because he spent more than he earned.
- Conclude that the most logical corrective action is to reduce discretionary spending: \(\boxed{\text{No, Dan should reduce his discretionary spending.}}\)
Explanation
- Calculating Total Actual Spending
To determine if Dan stayed on budget, we first calculate his total expenditure for the month based on the provided table. The total amount spent is the sum of expenses for all categories:
Internet: \(\$35\)
Food: \(\$98\)
Rent: \(\$500\)
Discretionary spending: \(\$140\)
The total spent is \(\$35 + \$98 + \$500 + \$140 = \$773\).
- Comparing Spending to Income
Now, we compare the total expenditure with Dan's income for the month. Dan's total income is \(\$750\). Since the total amount spent (\(\$773\)) is greater than his total income (\(\$750\)), Dan did not stay on budget, as he spent more money than he earned. The difference is \(\$773 - \$750 = \$23\).
- Analyzing Budget Performance and Conclusion
We examine the individual categories to see where the overspending occurred.
- Internet: Budgeted \(\$335\), Spent \(\$35\) (under budget)
- Food: Budgeted \(\$100\), Spent \(\$98\) (under budget)
- Rent: Budgeted \(\$500\), Spent \(\$500\) (on budget)
- Discretionary spending: Budgeted \(\$100\), Spent \(\$140\) (over budget by \(\$40\))
The only category where Dan exceeded his set budget is "Discretionary spending". Consequently, the most logical step to bring his spending back within his income is to reduce his discretionary spending. Among the given options, the most appropriate conclusion is that Dan did not stay on budget and should reduce his discretionary spending.
Examples
Managing a personal budget is a vital life skill. Just like Dan, tracking your expenses against your income allows you to see where your money goes. If you notice you are spending more than you earn, you can identify "flexible" categories like discretionary spending (e.g., dining out, hobbies, or entertainment) and make adjustments to ensure you maintain a healthy financial balance. By regularly reviewing your budget, you ensure you live within your means and achieve your long-term savings goals.