THE JOB AND CAR Part 1 of Flying the Coop NAME: GRADE: /50

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1 THE JOB AND CAR Part 1 of Flying the Coop NAME: GRADE: /50 Circle the scenario that best fits your future position in life: 1. You have just finished a 4-year college and have your first full-time job 2. You have just finished trade school and have your first full-time job. 3. You have just finished high school and have your first full-time job. DIRECTIONS: You have your first full-time job and in order for you to leave the family s nest and get your own apartment and car, we will need to know how much you are going to make a year. Go on the internet, find an informational sheet about the type of job you would like to secure. If you choose to keep the same job you selected at the beginning of the semester that is fine 1. Download a sheet about the job you have chosen that has the salary you will earn per year and benefits. Be sure to include the URL of where you found this information. You will attach this sheet to the back of this assignment. 1. How much will you make a year? 2. Divide this amount by 12 to find breakdown of month wages 3. Subtract 1/3 of month wages from month wages to find out what is left after taxes are taken out. 2. You also had a car given to you during college by your grandfather, Honda Civic The car has 90,000 miles, and is in fair condition. You plan to use this car as a trade-in for your new car. Go to Kelley Used Car Blue Book Values at: Cars/default.aspx Key in the information about your car as given above. What is the value of your car? 3. What factors influence the value of a used car? 4. You have decided to purchase your first NEW car that you can afford. Visit to shop for a car. If you have a particular car in mind, you may visit an alternative website. You can only buy a 2010 or later model car. Print off a picture of your new car with sticker price and details. Record your vehicle information below of your new car: Make and Model: Price: Are there any rebates or other sales incentives for this vehicle? If so, describe and adjust the price:

2 5. Available funds for down payment You are relying on your trade-in for your down payment of 6. Loan Information What is the total cost of your car before financing? What is the trade-in amount? Any rebates, sales incentives? Rebates Incentives Total amount you are financing? Length (term of loan)? Interest Rate? Monthly Payment? Total amount of interest paid for this car? How much will you have actually paid for this car? GO TO BANKRATE.COM Auto loan calculator (search Auto loan calculator) Auto Loan Calculator Auto loan amount: Auto loan term: years or months Interest rate: Auto loan start date: % per year Jan Monthly auto loan payments: NOW IS YOUR CHANCE TO FIND OUT WHAT IT WOULD COST YOU FOR THE CAR OF YOUR DREAMS. Follow the same format above but for the car of your dream. Let s see if you can afford it. 7. Search the internet for the car of your dreams. You will still use the Honda Civic 2003 as your trade-in. Print off a copy of your dream car with price and details. 8. Visit to shop for your DREAM car. You can only buy a 2010 or later model car. Record your vehicle information below of your new car: Make and Model: Price: Are there any rebates or other sales incentives for this vehicle? If so, describe and adjust the price:

3 9.. You are relying on your trade-in for your down payment of 10. Loan Information What is the total cost of your DREAM CAR before financing? What is the trade-in amount? Any rebates, sales incentives? Rebates Incentives Total amount you are financing? Length (term of loan)? Interest Rate? Monthly Payment? Total amount of interest paid for this car? How much will you have actually paid for this car? GO TO BANKRATE.COM Auto loan calculator (search Auto loan calculator) 11 Can you afford your DREAM CAR yet? Auto Loan Calculator Auto loan amount: Auto loan term: years or months Interest rate: Auto loan start date: % per year Jan Monthly auto loan payments: Print off a copy of your car and financing of your car. Print off a copy of your DREAM car and financing of your car. This will all be attached to the back of this form. NOW ON TO CAR INSURANCE Read the article below and answer the sheet attached.

4 Got it Covered? - A Crash Course in Car Insurance Channel: Online Author: Heather Levin - Asheville, North Carolina If getting your license was exciting, driving your own car meant you were really on your way. The first speed bump isn t that far down the road though, and it can quickly let the air out of your tires: car insurance. Two little words with the power to make us grab our wallets and run for the hills. While we may begrudge every dollar poured down the insurance hole, even minor injuries from an accident can cause crippling financial setbacks. A safety net is an absolute necessity. The key to insurance is understanding how big of a safety net you need. Then you can tailor your policy to fit whatever stage you re at in life. INSURANCE INTELLECT: LEARN THE LINGO Insurance is protection against financial loss. You pay a regular fee, a premium, for the assurance that if you experience a financial loss, the insurance company will help to cover it. Companies assess risk levels for different age groups, genders, and lifestyles to develop a rate plan. This is why insurance rates for under 25-year-old drivers, people who statistically get into more accidents, are very high. A deductible is a fixed portion of the accident costs you must pay before the benefits of the insurance plan kick in. Generally, the lower your premiums are, the higher the deductible you will have to pay when an accident occurs, and vice-versa. There are endless combinations of premiums and deductibles, and invariably there is one to fit your needs. AUTO INSURANCE: THE BREAKDOWN Liability Liability is the most important type of auto insurance because most states require you to carry it. Bodily Injury Liability is going to protect you if you injure or kill someone. Property Damage Liability pays for the vehicle, building or mailbox you may damage in an accident. Many professionals recommend carrying high limits with liability to save money on your deductibles. It s far easier to shell out a 500 deductible after a fender-bender than to come up with 250,000 to cover a lawsuit you didn t expect. Liability rates depend on where you live. Drivers in New York for example, are required to carry at least 25,000 for injury, 50,000 for death, and 10,000 for property damage caused by any one accident, also known as 25/50/10. Check out insure.com for a list of minimum requirements by state or contact your state insurance department. Collision is going to cover your car when you get into an accident, regardless of who is at fault. If you lease or finance your car, then you re most likely required to carry it. However, if you drive an older car it might be wiser to skip this coverage and put that money in the credit union towards the purchase of a new one. Collision is generally the most expensive component of auto insurance, so check the Kelly Blue Book (kbb.com) to make sure your car isn t worth less than what you are paying for in coverage. Comprehensive Think of Comprehensive as the jack-of-all-trades coverage. Hailstorm? Covered. Riot? You bet. Comp covers almost any damage to your car aside from a vehicle-to-vehicle crash and requires a deductible. If you feel you can come up with 500 in the event of a freak tornado, you can keep your deductible

5 high and save money on your monthly bill. Comprehensive costs vary depending on the city. For example, an area with a lot of car theft is going to spike your payments. Uninsured Motorist Wondering who s going to pay for your hospital expenses should you need them? If the other driver doesn t have any insurance, and the accident is not your fault, hopefully you signed up for Uninsured Motorist. Some states require this in addition to Bodily Injury Liability, so make sure you talk to a professional before you decide whether to decline this coverage. Uninsured Motorist generally costs less than Liability and Collision, and depends on your driving record, location and car. Personal Injury Protection Property Injury Protection covers your medical expenses regardless of who is at fault. This covers lost wages as a result of your injury, as well as funeral expenses, if you re unlucky enough to need them. It s only available in some states, so check with a professional on this one. Personal Injury Protection should cost less than Liability and Collision, but is highly subject to all of the variables in your life. Rental Reimbursement Rental Reimbursement will pay for a portion of your rental car costs if your insured car is put in the shop. This is considered an extra, and should be the least expensive component Are there more types of coverage? Absolutely. But if you re a young adult with few assets you probably don t need them. INSURANCE SHOPPING The best things to do are to shop around and compare policies. Make sure to note the differences in limits and pay structures, or you will have a skewed view of which offer is the best. Rates can vary widely, even within the same city. Check with your credit union to see if they offer insurance, and while you re at it, check out sites like progressive.com and geico.com. They give you rates for up to four different agencies. Sources: insure.com; progressive.com; geico.com; nicb.org; insurance.com; statefarm.com; nydmv.state.ny.us The Bottom Line U.S. drivers paid an average of 944 for auto insurance annually in However, with smart shopping, safe driving, good grades, low mileage, safety features and reasonably raising your deductibles, you can make quite a dent in your payments... and you'll always be covered if your car ends up with one.

6 Personal Finance Car Insurance Objective: Examine car insurance Obtain a quote for car insurance Name: Part 1: Understanding Insurance Read the attached article (Got it covered) and answer the following questions: 1. Define Insurance: 2. Define Premium: 3. Why doesn t everyone pay the same rate for auto insurance? 4. Who is considered the highest risk for car insurers? Why? 5. Define deductable: 6. What is the relationship between your premium and your deductable? 7. Describe the following auto insurance terms and concepts: a. Liability b. Collision c. Comprehensive d. Uninsured Motorist e. Personal Injury f. Rental Reimbursement 8. How do you get the best rates for car insurance? 9. How much did the average American motorist pay for car insurance in 2010?

7 Part 2: Obtain a car insurance quote Using the new vehicle information you selected, obtain an insurance quote from American Family Insurance1 at Input the following information when prompted: 1 I am not endorsing American Family insurance. This website was selected because they do not require personal information to obtain a quote Zip code driver, 1 vehicle Garage zip Commonly chosen coverage No damage, not a replica, not used for business Average annual mileage = 12,000 Garage address: 6477 Center Street, Mentor Age = 22 Years driving = 6 Currently have insurance for longer than 6 months First name choose something No tickets or violations Car will be used to drive to work for the distance listed on the net pay worksheet What is your insurance quote: for months Calculate your monthly car insurance premium:

8 Personal Finance Financial Budgeting Simulation Calculating New Fuel Costs Objectives: Utilize a website to estimate annual fuel costs Adjust assumptions to analyze their impact on fuel cost projections Name: Now that you have a new car, you will need to determine your fuel costs. Go to Click on Find & Compare Car Click on Find a Car Click on your Year, Make and Model o You may need to select a model try and select the model closest to the model you purchased. Click on Use your gas prices and annual miles o Select 12,000 miles per year o 60 % city o Regular gas = current gas prices Annual Fuel Costs: Monthly Fuel Cost: (annual fuel cost/12) NOW USING THE SAME WEBSITE, DETERMINE THE COST OF FUEL FOR YOUR DREAM CAR. Go to Click on Find & Compare Car Click on Find a Car Click on your Year, Make and Model o You may need to select a model try and select the model closest to the model you purchased. Click on Use your gas prices and annual miles o Select 12,000 miles per year o 60 % city o Regular gas = current gas prices Annual Fuel Costs: Monthly Fuel Cost: (annual fuel cost/12) ONLY RECORD THE FUEL COST FOR YOUR NEW CAR, NOT DREAM CAR ON YOUR BUDGET FORM.

9 IT S TIME TO KICK YOU OUT OF THE NEST, BUT BECAUSE YOU ARE LOVED YOU ARE GIVEN A PARTING GIFT OF 5,000 EACH. IF YOU ARE GOING IT ALONE, YOU ARE GIVEN 10,000. YOU CAN THANK YOU FAIRY GODMOTHER FOR THIS. Using Word, cut/paste pictures of your apartment and all furnishings. Include documentation of what pictures represent. Using spreadsheet given, keep track of all expenditures. Print off (using laser printer) your word document/spreadsheet Points: You are to rent an apartment in the Mentor area. Criteria: List location (address), name of apartments if a price range, use average price range You will need to pay the first month s rent and a security deposit. Security deposit = one month s rent 3-bedroom apartment air conditioning Security deposit First month s rent 2. Appliances needed to purchase: Washer and Dryer List vendor, brand of appliances, and price 3. Purchases for apartment Must provide name, brand, price, and store purchased at: Sofa Two chairs for living room 2 Lamps for living rooms End tables Flat screen TV (at least 40 inches) Dinette/dining room with four chairs Microwave oven Dishes/silverware Pots and pans A FEW WEBSITES: Apartment.com Moving.com Apartment guide.com Ikea.com Sears.com Penneys.com 4. Two bedroom sets (queen or king) List all pieces that are included with each bedroom set, manufacturer of bedroom sets, where purchased, price Two sets of bedding for each bedroom (sheets, blankets, pillows, etc.) lamp for each bedroom 5. Third bedroom you decide what to use this room as and furnish as you want ideas: computer/game room, office area, exercise room, laundry room 6. Utilities: (300) Cable Deposit for hookup Monthly fee Electric Monthly fee 7. TOTALS

10 FREEDOM AT LAST!!!! WE FLEW THE COOP AND WE LIKE IT!!!! I'M GOING IT ALONE: I LIKE COMPANY: GETTING INTO FIRST APARTMENT PURCHASE PRICE TOTAL AMOUNT SPENT FOR EACH AREA 3-BEDROOM APARTMENT SECURITY DEPOSIT FIRST MONTH'S RENT TOTAL APPLIANCE PURCHASE WASHER/DRYER APARTMENT PURCHASES SOFA 2 CHAIRS END TABLES FLAT SCREEN TV 2 LAMPS DINETTE/4CHAIRS MICROWAVE OVEN DISHES/SILVERWARE POTS/PANS TOTAL BEDROOM 1 BEDROOM 2 BEDROOM 3 UTILITIES BEDROOM SET LAMP BEDDING 100 TOTAL BEDROOM SET LAMP BEDDING 100 TOTAL TOTAL Cable hookup/monthly fee Electric/monthly fee TOTAL 300 TOTAL EXPENDITURES: BUDGET ALLOWANCE: 10,000 TOTAL EXPENDITURES MONEY REMAINING:

11 Personal Finance Financial Budgeting Simulation Moving Out - Rental Insurance Objectives: Revisit concepts related to insurance Review concepts pertaining to renter s insurance Name: Just when you thought you spent enough, Rental Insurance is needed to protect your apartment belongings. Part 1: What do you think? Use Information from Part 2 to complete 1. What is insurance? 2. Is renter s insurance necessary? Why or why not? 3. What is covered under a renter s insurance policy? 4. What factors influence renter s insurance premiums? 5. Which is preferable replacement cost or actual value? Why? Part 2: Review the facts Renters insurance protects your personal property against fire, theft and vandalism Renters insurance can help protect you in case of a liability lawsuit against you Your landlord s insurance policy generally covers the building you live in not personal belongings Discounts on renters insurance can occur for the following: o Multiple line o Home alert systems The higher the deductable, the lower the premium Replacement cost will reimburse you the amount necessary to replace an insured item Actual cost will reimburse you for the actual value of the insured item at the time of loss o Actual cost factors in depreciation Uninsured losses include: flood, earthquake, other natural hazard Personal property special limits apply to certain types of property including cash, collectables, theft loss of jewelry and computers. o Itemized coverage for specific items is available (at an additional cost) Based on growth projections, assume renters insurance at 225 annually. Add renters insurance to your monthly budget (remember insurance is for a year so divide it by 12) Attach this completed form to the back of your apartment spreadsheet

12 PERSONAL FINANCE ONE MONTH BUDGET 2011 NAME: MONTH: INCOME: Net Income Other Income TOTAL MONTHLY INCOME EXPENSES: Rent Rental Security Deposit Renters Insurance Car Loan Car Insurance Gas Food Entertainment Clothing Cell Phone Miscellaneous Credit Card Payment Savings Account Gym Membership additional expenses? TOTAL EXPENSES END OF MONTH BALANCE (You must have a positive balance at the end of the month. If you do NOT, indicate below what you would do to reduce your expenses for January? EXPENSES CUT: Total expenses from cuts End of month balance after cuts