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Financial Budgeting and Planning - Essay Example

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The writer of the essay "Financial Budgeting and Planning" calculates income tax for Penny for 2015/2016. The essay produces a plan to get her out of her money difficulties. In order to plan for the future, Leonard and Penny need to formulate a budget to push them through…
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Financial Budgeting and Planning
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Download file to see previous pages From penny’s example we took her total income of £ 21,200, we deducted UK dividends, UK treasury stock, building society interest and shoes as well as clothes since this should not be taxed but should be given wear and tear allowances. We later took her taxable income and multiplied it by 20 percent to get her tax for the year. From the table above, she pays £ 3,008, which we should also add the pay as you earn of £ 1,400, which she pays yearly. The resultant figure is the tax payable and should be deducted from her taxable income to get her net pay (Debar, G., 2012, Pp. 10-16). I should advise penny to cut on the budget and the money she is spending on shoes and the mortgage and the credit cards since this is increasing her burden and the amount she should pay back. From the information about penny’s credit cards, we see that she is owing to many financial lending institutions huge amounts, which have accrued interest, and she is not able to pay back. I would also advise her to take credit cards and loans from banks and other financial institutions that have lower interest rates. For example, there is a credit card she took with an interest rate of 1509 percent, which is absurd and she should try as much as possible to stop taking credit cards and loans with high-interest rates. I would also advise her to try as much as possible to try and saving in Savings and Credit Cooperative Societies as their interest rates are lower and sometimes one is not required to pay any interest rates. ...Download file to see next pagesRead More
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