Classify each item of his expenses as high priority or low priority.

High priority: Rent, water and lights, groceries, taxi transport, bank charges, medicine, cell phone contract, instalment on DVD player. Low priority: Clothing, satellite TV subscription, magazines, entertainment.

Calculate the total cost of his variable expenses.

Variable expenses include clothing, water and lights, taxi transport, groceries, magazines, entertainment. So: \(\text{R}\,\text{260}\) + \(\text{R}\,\text{280}\) + \(\text{R}\,\text{900}\) + \(\text{R}\,\text{940}\) + \(\text{R}\,\text{180}\) + \(\text{R}\,\text{340}\) + \(\text{R}\,\text{580}\) = \(\text{R}\,\text{3 480}\)

Suppose now that Jacob earns \(\text{R}\,\text{6 500}\) each month. He could choose to buy a flat screen TV on hire purchase but he still owes \(\text{R}\,\text{2 000}\) on the DVD player. What would you advise him to do?

Jacob should finish paying for the DVD player before he acquires more debt.