Jim earns $1,600 per month after taxes. He is working on his budget and has the first three categories finished.

Housing $576
Food $272
Transportation $320

Why will he have a problem with the rest of his budget?

He is budgeting too much for transportation.

He has used the highest recommended percentages to calculate the amounts for the three categories.

He is budgeting too much for housing.

He has used the lowest recommended percentages to calculate the amounts for the three categories.