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Tony Just Received His Checking Account Statement from His Bank

question 76

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Tony just received his checking account statement from his bank. He has a NOW account with free checking that pays 0.75% APR on the balance and requires a $500 minimum balance. His statement shows that he currently has a balance of $3,950. In looking at his statement he notices that his car payment check for $400 is still outstanding, and that his recently received payroll deposit of $3,600 had not posted at the time the statement was created. His normal living expenses average $1,500 per month including his car payment. Other than his car loan, he rarely writes any checks as he prefers to use his debit card and ATM card for day-to-day living expenses. He pays his credit card balance in full every month. Other than his checking account he does not own any investments. He has always dreamed of owning a house, and would like to buy one within the next five years. He has access to a 401K pension plan at work where his employer will match contributions up to 6% of his salary. He currently contributes 2% of his salary to this plan.
-What would you recommend to Tony concerning his cash management?

Definitions:

Concrete Operational Stage

A phase in Piaget's theory of cognitive development where children gain the ability to think logically about concrete events.

Preoperational Stage

A developmental stage, identified by Jean Piaget, where children aged 2-7 years think symbolically but are not yet logical.

Formal Operational Stage

An advanced stage in cognitive development, according to Piaget, marked by the ability to think logically about abstract propositions and hypothetical situations.

Conservation

The cognitive ability to understand that quantities remain consistent even when their shape or appearance changes, typically developing in the concrete operational stage of cognitive development.