Olya would like to find a way to reduce her current debt. The table below shows Olya’s monthly income, expenses and net income.
Monthly Budget Amount Income Wages $2,750.00 Expenses Rent $850.00 Utilities $236.54 Entertainment $410.00 Food $220.00 Cell Phone $114.98 Credit Card #1 $56.79 Credit Card #2 $38.45 Car Insurance $120.00 Car Payment $260.00 School Loan $250.00 Net Income $193.24 After evaluating Olya’s monthly budget, which of the following would not be an option to help reduce her debt? a. Olya could spend less on entertainment each month and put the money towards her credit card payment. b. Olya could skip a month or two paying for her school loan and put the money towards her credit card debt. c. Olya could try to save money on her utility bills by investigating money saving plans offered by the utility company. d. Olya could spend less on food each month and put the money towards her credit card payment.
Although skipping loan payments to add more money to credit card payments would pay off the credit card faster, this would only increase the cost of her loans (it is usually not allowed to simply skip a month of paying student loans without incurring a lot of interest and fees).
