Question\begin{tabular}{lr}
\hline Car payment & \\
\hline Internet & \\
\hline Car wash & \\
\hline Insurance & \\
\hline TOTAL & \\
\hline
\end{tabular}
However, Lee has made a mistake and listed an expense that should not be listed.
Which expense should not be considered when making an emergency fund?
Choose 1 answer:
(A) Internet
(B) Utilities
(C) Car wash
Studdy Solution
STEP 1
What is this asking? Lee messed up his emergency fund calculation by including something he shouldn't have, and we need to figure out what it is. Watch out! Emergency funds are for unexpected problems, not regular expenses!
STEP 2
1. Calculate Lee's listed total expenses.
2. Find the mystery expense.
3. Identify the non-emergency expense.
STEP 3
Let's **add** Lee's listed expenses to see how much he *thinks* he needs for his emergency fund.
We have his car payment at , internet at , car wash at , and insurance at .
So, .
STEP 4
Lee *thinks* his total is , but we just calculated his listed expenses to be .
That means there's a hidden expense lurking somewhere!
To find it, we **subtract** our calculated total from Lee's stated total: .
That's a big mystery expense!
STEP 5
An emergency fund is for *unexpected* costs, like a sudden medical bill or urgent car repair.
Regular, predictable expenses don't belong in the emergency fund calculation.
STEP 6
Looking back at Lee's expenses, a car payment, internet, and insurance are all regular expenses that should be part of a normal budget, not an emergency fund.
But a car wash?
That's not usually a planned expense.
It's more of a "treat yourself" kind of thing, so it shouldn't be in the emergency fund calculation.
STEP 7
The car wash expense should not be considered when calculating an emergency fund.
So the answer is (C).
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