8Th Gradepersonal BUDGET

8th GradePERSONAL BUDGET

The objective of this project is for you to set up a budget that would allow you to live the type of life you would like, as well as to understand what skills and/or education you need to get there. This will include finding an apartment, finding a car, developing a budget, and finding a career that would match your income needs. This project involves doing some calculations and setting up a budget in Excel using their calculations feature and importing all of this data into a brief power point presentation. You have to develop a master spreadsheet that will show all your calculations and contain a working budget.You budget must be BALANCED – that is – your expenses must fall within your income!
You will need to use your shoulder partner to complete this project (just as a sounding board for another’s opinion and a second pair of eyes). Each of you will be required to set up a monthly budget of your own. You will be required to set up your budget in Excel, and then get your information off the internet. The preparing of the budget will include you finding out what type of careerswill provide you with the necessary income, and how much education is needed for such a career. Each of you will construct a budget according to a job you selected which includes all necessary bills and living expenses detailed below. No matter what your job might be, you must construct a working budget with costs less than expenses.
First you need to find a career. Using this link to the U.S. Government's Bureau of Labor of Statistics ( find a career that you are interested in and include the annual gross salary for the position. Realize that some careers will require a Certificate Program, a 2 year Associates degree, or a 4 year Bachelor’s degree and some a 6yr Graduate (Master’s) degree or more. The amount of education needed for your career will be indicated in the profile of the career selected from the BLS. Information on your career choice will be needed in your final presentation. Realize also that the median salary they are indicating are for 10 year experienced professionals and so you will need to multiply the median salary by 60%. Be reasonable with your gross salary. Even with a graduate degree, starting salary for an entry level position in any field will not be greater than $50,000.
CALCULATING NET INCOME
Once you have found your career, you will need to find out your net earnings. Net income is also referred to as your take home income. Net income is the difference between your gross income and all necessary mandatory expenses. Consider tithing to your church, taxes and student loans as mandatory expenses that must be paid. After taking outfederal income tax (which is proportionate to your income – look up federal tax tables at: AZ state income tax (use 10% of gross income) and your social security tax ( use 8% of your gross income), include 10% tithing to the Church and then your student loan monthly payment as shown below.
STUDENT LOANS
In order to find the profession you are looking at, it took education. We will use the following guidelines for establishing re-payment amounts for your student loans.
If your career required a Certificate Program or an Associate’s Degree (2yr) and you should budget a flat $150 per month to pay back your student loans. If your career requires a Bachelor’s Degree (4yr), you should budget a flat $200 per month to pay back your student loans. If your career requires a Graduate Degree (6yr) you should budget a flat $250 per month to pay back your student loans. If you are looking at an MD, a post Graduate degree is required and so budget $300 per month for you student loan repayment. Information on your education expenses will be needed in your final product.
Enter all this into your budget spreadsheet. After subtracting all of this from your gross salary, you will then have your net yearly income. Information on your fixed expenses will be needed in your final product.
HOUSING
After you have a career and a net income, you need to find an apartment to live in. It your first job, living in a studio or 1 bedroom apartment seems to make sense. Search for an apartment in the geographic area you wish and the size you are looking for. Make sure to enter in your monthly rent and other associated living expenses into your budget numbers.
CAR
Most people also have ideas on what type of car they would like to own. Look up a used car that meets your need and seems like a good deal – write down specifications for the car and make sure to write down the total cost. Not many of us can buy a car outright and need to finance it. Look at auto loan bank rates (bankrate.com) and see how much it would be to finance your car with no more that 5% down payment. Since this is your first car, your interest rate will be a bit higher than what is advertised. Use 8% as your loan rate in your monthly calculator. You may only extend you auto loan for 4 years (48 months). Make sure to write all this down on your budget worksheet. Information on our automobile will be needed in your final product.
BUDGET
The next step is to set up your budget. This will entail the following steps:
In an Excel spreadsheet begin with your gross income, calculate your mandatory expenses: Federal and State taxes, student loan payments and tithing to the Church. Subtract these from your gross income; this is your net annual income. Divide this number by 12 to calculate your monthly income.
In your next section of the spread sheet include other monthly expenses. Figure out your monthly rent payment and your monthly car payment.Do not initially worry about security deposits, first and last month rent. Also do not include the car down payment in your budget but realize these are one-time expenses that are necessary. A budget is more for recurring expenses.
Some budget experts recommend that arent payment should be no more than 28% of your net monthly income, and that acar payment should be no more than 12% of your net monthly income. Use the expense guidelines listed below to include and on your worksheet in your budget. Make sure to double check your calculations and enter those household expenses into your spreadsheet.
All of the following expenses MUST be accounted for in your budget.
Expenses and their suggested related cost
Housing 28%
Groceries and household items 12%
Utilities 5%
Auto (monthly payment) 10%
Auto Expenses: 5% (gas, maintenance and insurance)
Entertainment: 5%
Miscellaneous 5%
Cash contributions 10%
Personal life insurance and pensions 5%
Savings 10%

Schedule:

1stclass – determine career and gross and net income and begin looking into housing and transportation.

Start a Power Point presentation with the title slide identifying your name and new career and gross income. The second and third slide should include specific information on your housing and your transportation including the monthly payment for each. The fourth slide will show your budget spreadsheet.

2nd class – Start building your monthly budget spreadsheet. Use the arithmetic functions in Excel to calculate your expense percentages.

Make note of any changes you needed to make to the percentages of your expenses to make your budget work out. Mention these on your 4th slide. You can not lower your expenses too much to make your budget work out and then not have enough for groceries or pay your electric bill.

If you are not able to balance your budget perhaps you are living too large and need to evaluate you housing and/or transportation. To solve your budget balancing problem you cannot just decide to be a brain surgeon and make $150,000. Public transportation could be budgeted at $150 per month which is significantly less than owning your own car.

3rd class – use this class to wrap you’re your budget calculations on your spread sheet and make sure you budget balances. Copy this to your final Power Point slide. Hand in your 4 slides (career, apartment, car, and budget) printed out front and back in black and white with your name on it. These will be due at the end of the third class that we have worked on this project.

BUDGET WORKSHEET

Name ______Date: ______WCE#______

Career
Gross Income
Taxes Fed, Satae Local SS
Tithing
Student loan
Monthly Net
Housing 28%
Groceries and household items 12%
Utilities 5%
Auto (monthly payment) 10%
Auto Expenses: 5% (gas, maintenance and insurance)
Entertainment: 5%
Miscellaneous 5%
Cash contributions 10%
Personal life insurance and pensions 5%
Savings 10%

Websites to use:

Apartments

Cars

Net Earnings

Career