carl and nancy johnson prepared a household budget in an attempt to manage their money better. as part of their budgeting process, carl and nancy prepared the following list: monthly income (after taxes); possible list of monthly expenses which include: rent, auto loan, student loan, food, and utility bills. carl and nancy realized that they must subtract the total monthly expenses from their monthly income (after taxes) to calculate their discretionary income. they were uncertain if monthly savings should be deducted from the total monthly income because it is not a form of expense. but they deducted savings from the monthly income anyway. by doing so, they are making an error in their calculation of the discretionary income.