Thanks Civonamzuk,
It is really best NOT to change these into improper fractions like that.
This way is better
$$\\3\frac{1}{4}-2\frac{7}{8}\\\\
=3+\frac{1}{4}-2-\frac{7}{8}\\\\
=3-2+\frac{1}{4}-\frac{7}{8}\\\\
=1+\frac{1}{4}-\frac{7}{8}\\\\
=\frac{5}{4}-\frac{7}{8}\\\\
=\frac{10}{8}-\frac{7}{8}\\\\
=\frac{3}{8}\\\\$$
I suppose in this instance it didn't make much difference but often it is much easier :)