Personal Budget Project

Transcription

1 Personal Budget Project Students will prepare a personal budget that summarizes typical monthly expenses for a single person, living alone and newly entering the job market. The early part of the project asks you to select a career, and figure out how much income you will have in that career. The second portion of the projects asks you to decide how that income should be spent. Keep in mind that you will be required to pay income taxes, and dedicate 10% of your after taxes income to Savings in the categories of your choosing. Block 1 Due Date- May 9, 2018 Block 2 Due Date-May 9, 2018 Block 3 Due Date- May 9, 2018 Block 8 Due Date- May 10, 2018 You will be expected to complete this budget exercise and turn it in on the due date listed above. No LATE work will be accepted. IF YOU ARE ABSENT on the DUE DATE and it is excused you will turn it in on the day of return. If you are absent on the due date and it is unexcused you can turn it in late for 10% off each day for up to three days. After three days no projects will be accepted. All necessary documents are on the website at Project.php. This Personal Budget will count as 25% of your quarter grade. This Should be composed into a bound (in a folder) document with a cover page that includes your name and period number. The Budget worksheet should serve as an accurate table of contents. Please remember that each of your estimates should have some documentation. Even if it is a guess please have a separate sheet of paper that shows me how you arrived at your guesstimate. Steps to Completion 1. Research your chosen career and complete the Career Summary Questions Worksheet. The worksheet is available at a. To find the Occupational Outlook Handbook i. Go to ii. Hover over Publications iii. Select Occupational Outlook Handbook iv. Find you career and use the information to answer the questions on the career summary sheet b. To find 10 th, 90 th, & 25 th percentile i. Go to ii. Hover over Home iii. Select Pay & Benefits iv. Select Wages by Area and Occupation v. Select State that you d like to live in vi. Select the career from the list

2 vii. Print the graph that shows wages for proof 2. Fill out and print a 1040EZ a. To find the 1040 EZ go to b. The answer to #1 is the answer from #10 on the Career Summary Questions. c. To find the answer to #10 go to and look up the amount from #6. 3. Complete the Taxes sheet from a. Only change cells B4 & B10 b. B4 is the answer from #1 on the 1040ez c. B10 is the answer from #12 on the 1040ez 4. Complete the Personal Budget Overview from a. The answer for cell B2 is the number you got on the Taxes worksheet in cell B24 b. Make sure your total savings is at least 10% of your monthly budget c. The amount for federal taxes is cell B17 on the taxes worksheet d. Any items on the budget overview that are bolded are required e. Remember the budget is on a monthly basis!!!! Income Wages and Tips - Use the 25 th percentile amount that you got from BLS. This would include any wages and tips paid to you for your work. Interest Income If you have money sitting in the bank and earn interest payments from that money. This is only counted here if you are using that money as income and not letting it sit in your account to compound and grow until a time when you need it. I would tell you that you should not build a budget that relies on taking money from savings regularly because it cannot go on very long before you have no savings at all. Dividends are from stock or other investments that pay you an amount of money again which you are using to supplement your income. Gifts Received Do you regularly receive cash gifts, document that here again if it is going to add to your overall income. Transfer from Savings -. I would tell you that you should not build a budget that relies on taking money from savings regularly because it cannot go on very long before you have no savings at all.

3 Other Please describe any other forms of income A. Home Expenses - No Roomates or Sharing Expenses Mortgage/ Rent The assumption is that most you just starting out in your career will most likely be a renter. If you desire to buy a property and more importantly can afford to do, you are likely to have expenses related to Lawn/Garden, Maintenance/Supplies and Improvements. If you are renting typically those things are done for you at no additional charge. Since most people will rent an apartment here are your directions. Select an apartment that fits within your monthly budget. Be sure to check on utilities. Try Apartments.com. Find a place to live that matches your expectations and desired area to live. Remember that you have to price it out for the state you are chosing to live in. Renters Insurance You can get online quotes at progressive.com, allstate.com, statefarm.com, or geico.com, divide the amount by 12 to arrive at a monthly amount. Note that the amount for renters insurance is a yearly amount, so to put it in your budget you will need to divide it by 12. Electricity You can easily estimate your expected cost by taking your parent or guardians bill amount divided by the number of rooms and then taking that result and multiplying it by the number of rooms you will have in your apartment. Please make a copy of an average bill of theirs, being careful to block account numbers and other personal information. For Example: Using your parents electric bill, in a home with 2 bedrooms, 1 bathroom, 1 kitchen, 1 dining room, and 1 living room. Therefore there are a total of 6 rooms in your present home. Electric bill is $160 / 6 = $26.67 per room. Let s say that in your new home after college there will be 1 bedroom, 1 kitchen, 1 living room and 1 bathroom, for a total of 4 rooms, take the per room amount $26.67 an multiply by the # of rooms in your new home [ $26.67 x 6 = $106.68] Water / Sewer/ Trash Again for most renters these expenses are paid by the property owner and not by you the tenant. If you are going to buy a home, please get a bill of this type from your parent/guardian and divide the bill amount by the # of people and multiply by the number of people in your target home. Phone - This can be for either Cellular or regular landline. Either choice, please find a quote for the service you desire that either includes tax already (MetroPCS is one of the few companies that do this) or take a normal monthly rate and add 15% to it, in order to arrive at the total.

4 Cable TV / Satellite TV - If you are going to have a television subscription you will be expected to find a rate quote for the channels that you watch the most. Don t use the promo rates that are only good for a fixed amount of time and then climb after that amount of time. Use the normal monthly cost. Internet Many times there are bundles that include this cost. If it is covered in the Cable section because you bought a bundle, then you don t need any numbers here, just make a reference to the fact that you purchase it in a package with your cable and or phone. B. Transportation Car Purchase - You can use to find a car. You may finance it out for anywhere from 1 to 5 years. The car that you choose on edmunds.com will give you estimates for fuel, maintenance, and repairs. Take notice that the longer the time you take to pay it off the lower the monthly payments are but ultimately the more the car actually will cost you. Car Insurance Quote-To get a car insurance quote go to quote.allstate.com and answer the questions about the car you choose. MAKE SURE TO ENTER THE AGE YOU WILL BE AT GRADUATION/END OF TRAINING Registration/License-Go to to get the fees for Florida (if you are moving to a different state get the fees for that state). Be sure that you capture both the Drivers License and Vehicle Registration. The amount you spend here will depend on the length of time you are going to finance the car for. Ex. I financed a car for 5 years Initial Registration $225 Renewal of Car Registration $44 per year So I have $225 plus $176 ($44 x 4) = $401/ 60 (5 years) = $7 per month License Renewals lasts 8 years so take the cost for Driver License renewal and divide by 96 C. Health Health Insurance Use ehealthinsurance.com to get a quote for Health Insurance. Take note of the co-payment for a doctors visit. Let us say that you will

5 be visiting the doctor twice, so the cost of a doctors visit can add up. MAKE SURE TO ENTER THE AGE YOU WILL BE AT GRADUATION/END OF TRAINING Doctor Depending on the coverage that you selected, you will need to pay your doctor a co-payment. That is the amount that you pay and your insurance will typically cover the remaining balance of the visit. But not all insurance is created equal. Some plans save you money monthly, but may only contribute a set amount towards the doctors visit leaving you to pay the rest. Assume you visit the doctor twice a year, once for a routine exam and another for illness. Medicine /OTC If you take medication regularly, figure out approx what your costs would be for that medication on the insurance you chose. If you occasionally get sick, find out how much the Over the Counter medication that you would normally take costs. Suggestion, if you can find it online like on CVS.com print out the page with the pricing info or feel free to include a picture of the item and its price tag. Health Club Dues this is referencing a gym membership. You are not required to have one, but if you did this is where you will include the cost for it. Life Insurance If you want to purchase life insurance on yourself, wholesalelifeinsurance.net, is one place you can put in some basic information and get a quick quote without giving personal information. Feel free to choose whatever coverage amount you would like. MAKE SURE TO ENTER THE AGE YOU WILL BE AT GRADUATION/END OF TRAINING F. Daily Living Groceries Get receipts from normal shopping from Parents/Guardians. If this represents a weekly shopping trip, then multiply by 4 for each week and divide by the number of people in the household. Example: - Receipts total $100 for a weeks shopping, So $100 x 4 = $400 3 people in Household $400/3 = $ Personal Supplies Hygiene Deodorant, Gel, toothpaste, soap, shampoo, etc. Use Drugstore.com, add items to shopping cart that would be needed monthly and print result. Clothing Wherever you are likely to shop as a college graduate and part of the workforce, think about the kind of clothes your likely to need for work. Find those clothes and don t forget undergarments and price them out for what you are likely

6 to want to purchase for an entire year, add those things in the cart, print cart. Take total, divide by 12 and document amount in Overview. Cleaning- Feel free to use Drugstore.com again or whatever other website you would like, find the cleaning supplies that you will need and add them to cart and print out total. Dining / Eating out Look at a menu for your favorite restaurants that you would like to visit. Decide what dishes you would like to eat, add a drink, 6% for sales tax, and 20% for tip. Each persons numbers will be a little different as tastes and how frequently eat out will vary. For Example: Lets say I eat the same dish at Red Lobster once a week as the only meal that I eat out each week. I order a dish that costs $ $1.99 Beverage = $ %(1.14) Sales Tax = $ % Tip ($4.02) = $ If I eat there once a week, then $24.12 x 4 = $96.48 Salon / Barber Recognize that these costs vary between Men and Women dramatically. Examine how frequently you require a hair cut, probably about once a month. Typically mens haircuts are $15 plus tip and women are roughly twice that amount. Other This is where you are to include Dry Cleaning costs and other Daily living expenses that I haven t thought to include. Please provide documentation and be specific. G. Entertainment Use proof for each of your expenses. For Movies Fandango.com is a good resource, video rental, Neflix.com if you want to rent movies regularly. Priceline.com for travel. Remember that the amounts that you put in the Overview is a monthly amount. On your proof, detail the cost on a per month basis. H. Savings This section must total up to 10% of your income after Taxes are factored in. It can be dispersed among any of the categories. Note that the amount you devote to savings will be used later in the Savings Interest Calculator. Emergency Fund Save for things your budget doesn t factor in and are unknown until they happen, like a speeding ticket, an unfortunate illness, car problem, cell phone overage, etc. Transfer to Savings The amount you dedicate here will go into the Savings Interest Calculator. Assume a rate of interest of 4%.

7 Retirement (401k, IRA) These types of plans can be offered by your employer to allow to invest your money in a way that provides you with some tax advantages that you don t get from a normal savings account. Those advantages aren t experienced until you retire, but they often are very worth the time to set up the account. Investments Real Estate, Stocks, Collectibles, these are the more risky of your investments where you take more risk for the possibility of more reward. Education Savings Account This is for your children where you can save for their education costs in a tax advantaged way. This is not to pay for your education only to save for your children or other family members education. I. Obligations Student Loan If you didn t have enough money and scholarships to cover your costs of education, you will need to borrow the money to pay for it. Once have figured out the lump sum that you would need to borrow, enter it into the Federal Taxes This is the total Monthly amount of Tax that you got from the Tax Worksheet (Cell B17). This means you will be combining the Medicare, Social Security and Income Taxes to form a monthly amount. State Taxes - Some (43 to be exact) states have a state income tax, Florida does not, if you chose to live in a State other than Florida, you will need to figure out if they have a state income tax. If there is a state income tax there, you will need to look up in a table to find the amount of State income tax you have to pay and include it here. 5. Complete the Savings Interest Calculator available on the website. Make sure cell E11 on the Savings Interest Calculator matches the amount from TRANFSER TO SAVINGS on the Budget Overview. 6. Complete the Personal Budget Thought Sheet available on the website.