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Sofia expects to earn $3800 from her summer job and $1500 from working as a babysitter. She receives gifts worth $400 from her friends and family on her birthday. A scholarship from a local Book Reader's Club adds $1000 each year while she is in college.
Additional details:
Sofia's family pays for her college costs, except for room and boarding
Her planned expenditures for the year include the apartment rent of $150 per month for 12 months and annual food costs of $5000.
Monthly transportation and entertainment costs are $40 and $50, respectively.
A cash reserve of $500 needs to be maintained for travel and other emergencies.
At the beginning of the year, Sofia has the cash reserve and $200. Her father asks Sofia if she would need a loan during the year. Suggest an appropriate written response for her father.
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Budgeting supports the planning process by encouraging all of the following activities except:
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