Question Must post first. Life Situation Financial Data Young Married Couple Pam

Question

Question Must post first. Life Situation Financial Data Young Married Couple Pam, 30 Josh, 32 Two Children, ages 1 and 3 Monthly income $3,600 Living expenses $3,125 Assets $33,850 Liabilities $1,520 The Brocks now have two preschool-age children. Their household income has declined with Pam providing full-time care for the children. To compensate for their lower monthly income, Pam and Josh have cut back to spend money on basics only. As a result of this action, the Brocks have managed to pay down their liabilities over the past four years. The Brocks are considering purchasing a second automobile. Currently, Pam must drive Josh to the train station (creating many inconveniences for her and the children) if she wants to use the car for various business and education activities. Housing needs are changing for the Brocks as their family increases in size. At present, they pay $750 in rent for a two-bedroom apartment. To purchase a home for a comparable monthly payment, the Brocks would have to relocate farther from Josh's place of employment. With a second car and public transportation as available options, Pam and Josh are starting to consider this home purchase. Question 2: What strategies and research should they use to save on transportation costs while fulfilling family transportation needs?

Explanation / Answer

It is advisable to purchase a home for living purpose and better to use public transportation for transportation

Because if they purchased a second car the whole income will be going for that and they are not able to meet their basic expenses and car is a depreciable asset where as land is not a depreciable asset

and they can save a rent of 750$ even though initial payment was high it is better to purchase a home

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