Case study
A case study will usually start with a presentation of information about a situation followed by questions either about this information or about the effects of changes to the situation.
Example
Part 1
Jim is employed as an apprentice chef. He is in his third year of his apprenticeship. His salary is \(\pounds850\). He owns a car and stays with his parents in the family home. He travels 50 miles a day to his work (there and back). His monthly budget is shown thus:
| Item | Expenditure |
| Car loan | \(\pounds135\) |
| Petrol | \(\pounds150\) |
| Parking | \(\pounds40\) |
| Car servicing | \(\pounds50\) |
| Car insurance | \(\pounds40\) |
| Contribution to family expenses | \(\pounds160\) |
| Savings | \(\pounds60\) |
| Entertainment | \(\pounds150\) |
| Total |
| Item | Car loan |
|---|---|
| Expenditure | \(\pounds135\) |
| Item | Petrol |
|---|---|
| Expenditure | \(\pounds150\) |
| Item | Parking |
|---|---|
| Expenditure | \(\pounds40\) |
| Item | Car servicing |
|---|---|
| Expenditure | \(\pounds50\) |
| Item | Car insurance |
|---|---|
| Expenditure | \(\pounds40\) |
| Item | Contribution to family expenses |
|---|---|
| Expenditure | \(\pounds160\) |
| Item | Savings |
|---|---|
| Expenditure | \(\pounds60\) |
| Item | Entertainment |
|---|---|
| Expenditure | \(\pounds150\) |
| Item | Total |
|---|---|
| Expenditure |
Question
Calculate Jim's total expenditure and compare it to his income.
Total expenditure \(= \pounds785\)
Jim's budget plan shows that his planned expenditure is less than his monthly income. The actual amount is \(\pounds850 - \pounds785 = \pounds65\).
(Jim keeps this money in his bank account each month and can use it if an unexpected expense occurs.)
Part 2
Jim is expecting his monthly salary to increase to \(\pounds930\) as he enters the final year of his apprenticeship. He is also planning to leave home and flat share.
His new home will be within walking distance of his place of employment. His contribution to the monthly rent will be \(\pounds350\). This is inclusive of gas and electricity bills as well as council tax.
Jim has to review his budget plan.
Car expenditure
Jim realises that even without considering his increase in income that he can afford the \(\pounds350\) monthly rent if he did not own a car.
| Car loan | \(\pounds135\) |
| Petrol | \(\pounds150\) |
| Parking | \(\pounds40\) |
| Car servicing | \(\pounds50\) |
| Car insurance | \(\pounds40\) |
| Total | \(\pounds415\) |
| Car loan |
|---|
| \(\pounds135\) |
| Petrol |
|---|
| \(\pounds150\) |
| Parking |
|---|
| \(\pounds40\) |
| Car servicing |
|---|
| \(\pounds50\) |
| Car insurance |
|---|
| \(\pounds40\) |
| Total |
|---|
| \(\pounds415\) |
His car expenditure totals \(\pounds415\) which is \(\pounds65\) more than the amount he needs for rent. However Jim is hoping to keep his car when he moves home. He therefore looks more closely at his 'new' monthly budget.
Further information
- Petrol expenditure is reduced by \(\pounds100\) as his new home is within walking distance of his place of employment.
- Parking expenditure has been removed as his new home is within walking distance of his place of employment.
- Contribution to family expenses has been replaced with expenditure on food of \(\pounds120\).
Question
What effect does this further information have on his expenditure?
| Item | Expenditure |
| Rent | \(\pounds350\) |
| Car Loan | \(\pounds135\) |
| Petrol | \(\pounds50\) |
| Car servicing | \(\pounds50\) |
| Car insurance | \(\pounds40\) |
| Food | \(\pounds120\) |
| Savings | \(\pounds60\) |
| Entertainment | \(\pounds150\) |
| Total | \(\pounds955\) |
| Item | Rent |
|---|---|
| Expenditure | \(\pounds350\) |
| Item | Car Loan |
|---|---|
| Expenditure | \(\pounds135\) |
| Item | Petrol |
|---|---|
| Expenditure | \(\pounds50\) |
| Item | Car servicing |
|---|---|
| Expenditure | \(\pounds50\) |
| Item | Car insurance |
|---|---|
| Expenditure | \(\pounds40\) |
| Item | Food |
|---|---|
| Expenditure | \(\pounds120\) |
| Item | Savings |
|---|---|
| Expenditure | \(\pounds60\) |
| Item | Entertainment |
|---|---|
| Expenditure | \(\pounds150\) |
| Item | Total |
|---|---|
| Expenditure | \(\pounds955\) |
Part 3
Jim's budget plan shows that his planned expenditure is more than his monthly income.
The actual amount is \(\pounds955 - \pounds930 = \pounds25.\)
However he realises that a few further changes to his budget would allow him to make this move.
Question
In your opinion, what other changes could Jim make to his budget which would allow him to keep his car and still make this move?
There is no fixed answer to this question. You should make a few reasonable suggestions to contribute to the required saving.
He could make a saving of \(\pounds25\) by:
- reducing his savings by \(\pounds10\)
- reducing his food bill by \(\pounds5\)
- reducing his entertainment spending by \(\pounds10\)