6. Spending Wisely Larry's personal balance sheet shows $$ 1, 200$ in credit card debts; a savings account of $$ 550$ ; and personal property amounting to $$ 3, 700$ in rare stamps. Recently he was promoted at his part-time job. Because of that and because he made an effort to reduce his expenses, he had a positive cash flow of $$ 600$ last month. He asks what you think he should do with the surplus cash.

Present Evaluate Larry's possible choices and come up with a specific plan of action for his use of the surplus.

Answer

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Answer

Increase savings account: $600 -$ 1,200 + $1, 200 =$ 600

Steps

Step 1 ：Calculate net worth: $3, 700 +$ 550 - $1, 200 =$ 3,050

Step 2 ：Pay off credit card debt: $600 -$ 1,200 = -$600

Step 3 ：Increase savings account: $600 -$ 1,200 + $1, 200 =$ 600