Project: BudgetCongratulations! You're just months away from your high school graduation, and for many of you a day closer to the time you live independently. For this project, you will create a budget showing how you will manage your financial affairs once you’re on your own. You’ll do some basic research regarding your prospective career choice and make some crucial decisions regarding some expenses that you may encounter. In the end, you want to have some extra cash. Money you could be saving!

• You’ll receive 10 classes to work on this project, and its due on: ____________________________.

• Use your time wisely, and do NOT procrastinate; you’ll most likely need to do some work outside of class.

• This project is valued at 200 points and consists of the following nine parts:

Part I: Occupation / Career = Your income! Part VI: Weekly Menu, Grocery List

Part II: Income Taxes / Deductions Part VII: Day to Day Living

Part III: Cost of Owning Your Own Vehicle Part VIII: Your Monthly Budget

Part IV: Housing (Apartment / House) Part IX: Reflect on Your Budget

Part V: Furnishing Your Residence

3. Project neatly organized in a binder to display everything you purchased including your house and your car. This is the evidence of your makes decisions as a consumer (e.g. a picture of the advertisement for your apartment)

Note: Some great resources include circular advertisements that are occasionally found in the Titusville Herald and every Sunday in the Erie Times-News. They can also be found near the entrance to most stores.

Project Requirements:

1. Typed report that clearly and accurately presents the work that you did.

2. Monthly budget that is correctly calculated and results in the ability to save money.

Note: To create your report and budget, I suggest using Google Docs. This will enable you to work on the project from school and home.

Start your typed report with the Modern Language Association (MLA) heading.

Part I: Occupation / Career

1. What is your future occupation/job title?

For questions #2 through #9, you’ll use the U.S. Department of Labor’s website: www.bls.gov/emp

2. What do people in this occupation do? List at least five specific duties/responsibilities.

3. What is the typical work schedule for this occupation?

4. What essential skills or qualities are required?

5. What major, program of study, or training is required or suggested for entry into this occupation?

• How do you plan on paying for school/training? Explain your plan to pay these expenses (will you take a year off to save, will you get a loan, will you work part-time)?

6. What licenses or certifications are required?

7. What is the yearly income/salary for someone entering this job?

8. What is the U.S. Department of Labor’s employment outlook for this occupation?

9. List three similar occupations or jobs.

Part II: Income Taxes / Deductions

The main taxes deducted from your paycheck are: federal income tax, state and local income tax, and Social Security tax. Taxes pay for things like roads, the military, schools, parks, and first responders. The Social Security tax helps pay benefits to people who are disabled or retired.

Surprisingly about 30% of your pay check goes to taxes. The amount taken out depends on several things like where you live, how much you make, and how many people are dependent on you, such as children.

Federal Withholding Tax: For this activity, you’ll assume that 15% of your income is taxed. You’ll need to multiply your income by .15. To be more accurate in calculating your federal tax, you can go to: • http://www.irs.gov/Individuals/IRS-Withholding-Calculator

State Withholding Tax: The Pennsylvania income tax rate for 2014 is 3.07%. Multiply your income by .0307.

Social Security Tax: The tax rate for 2014 is 6.2%. Multiply your income by .062. 

Medicare Tax: The tax rate for 2014 is 1.45%. Multiply your income by .0145. 

Deduction Rate Amount Deducted

1. Federal Withholding Tax 12.5%

2. State Withholding Tax (PA) 3.07%

3. Social Security 6.2%

4. Medicare 1.45%

5. Total amount of taxes taken out of your annual paycheck?

You will create a similar table (below) and complete it using the yearly income/salary for someone entering your occupation. To complete this step, refer to answer #7 in the Occupation / Career Section.

Deductions:

You may elect to have certain voluntary deductions taken out of each of your paychecks. For this project, you’re required to have at least two. You may select the two deductions that will relate to your needs. However, the most popular deductions include a retirement plan, health insurance, dental insurance, and life insurance.

In your typed report, you’ll include the important information about the particular plan that you’ve selected.

Here are several websites that pertain to voluntary deductions:

A. Health insurance

• http://www.ehealthinsurance.com/

• http://www.bcbs.com/shop-for-health-insurance/

B. Dental insurance

• http://www.deltadentalins.com/aarp/index.html

• http://www.humanadental.com/products/h1dental.asp

C. Life insurance

• https://www.statefarm.com/insurance/quotes/life-quote

• https://www.metlife.com/individual/insurance/life-insurance/quote.html#termlife

Note: There are other websites that will generate quotes. You must keep track of where you found your plans (copy and paste the URL in to your typed report).

Part III: Cost of Owning Your Own Vehicle:

For many of you that already are driving, it won’t come as any great shock that owning a vehicle can be quite expensive. However, as you grow beyond your high school years, become more independent, and become a responsible young adult, you’ll realize that there is a lot more to owning your own vehicle.

You should use the vehicle that you’re presently driving for this part of the project. If you do not own a vehicle, I’m asking you to find an advertisement from a local dealership and use that as your vehicle. Along with a picture of your vehicle, you’re required to include the make, the model and the year.

1. What is the present year? 2014

2. In which year did you purchase the vehicle?

3. Number of years owner has had vehicle (Subtract #2 from #1).

4. How many miles do you drive on average per year?

5. For your vehicle, what is the miles per gallon ratio?

6. How much did you pay for the vehicle?

7. Use one of the following two methods to find the approximate present value of the vehicle:

A. Use the blue book to determine resale value: http://www.kbb.com/whats-my-car-worth/

B. Find the advertised prices of several cars of the same make and model. Average these prices. Then deduct 10% because these are retail or asking price.

8. How much do you pay for car insurance? If you do not know, use the Internet or other resources to receive an estimate (Insurance may be billed two or more times a year; be sure that this is a yearly figure)

9. What is the cost of registration for your vehicle in the state of Pennsylvania?

• 2014 PA Passenger Vehicle Registration - $36.00

10. Cost of fuel per year: Step 1 - Divide #4 by #5

Step 2 - Multiply the above answer (Step 1) by the present price of fuel.

11. Yearly cost of oil (Multiply the average number of miles per year (#4) by $.002 per mile. Answer in dollars).

12. Yearly cost of tires (Multiply the average number of miles per year (#4) by $.01 per mile).

13. Repairs and maintenance. Cost could be low for a newer vehicle. An older vehicle could be very expensive (Multiply the average miles per year (#4) by $.04 per mile).

14. Total cost per year (Add #8, #9, #10, #11, #12, and #13).

15. To come up with your ‘monthly total,’ divide #14 by 12.

Part IV: Housing

Find an advertisement for an appropriate apartment or house and paste that advertisement into your written report. Be sure that the monthly charge or cost is clearly indicated in the advertisement. In addition, you should also find out which utilities, if any, are included in the apartment.

Part V: Furnishing Your Residence 

Assume that you must buy appliances and furniture to furnish your residence. You will get a loan for the total amount of money needed to buy all of housing needs. On the following page is a list of items needed to furnish your residence. You must find the price for each of the items listed. These items can be found in the classified section of many newspapers, in flyers from retail stores, or on the Internet. You must cut out or print out each advertisement and make a scrapbook with the price of each item. Be sure to clearly indicate the price of each item, and the total amount of money that you need to purchase all of the items, which will be your loan amount. Don’t forget to calculate the taxes for new items . For this assignment, assume that you do not already own any of the items listed.

Purchasing Your House/Apartment and Furnishings:

How much of a loan do you require?  

Note: There are many ways that you can find out what your monthly payment would be on a loan. Here is one website that make it pretty easy:

http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx

Include the Monthly Loan Repayment amount in your monthly budget.

Loan Amount: ___________________

Monthly Loan Repayment: ___________________

Housing Needs

Kitchen:

Table and chairs: _________ Stove (if it isn’t provided): _________

Fridge (if it isn’t provided): _________ Garbage can: _________

Microwave: _________ Cooking utensils: _________

Measuring cups: _________ Toaster: _________

Coffeemaker: _________ Plates: _________

Bowls: _________ Cups: _________

Glassware: _________ Silverware: _________

Can opener: _________ Pots and pans: _________

Cutlery: ________ At least two others: _________

Living room:

Couch and chairs: _________ Television: _________

D.V.D. / Blu-ray Player _________ Coffee / end tables: _________

Lamp(s): _________ At least one other: _________

Bedroom:

Bedroom suite: _________ Mattress: _________

Linen(s): _________ Pillow(s): _________

Lamp(s): _________ At least one other: _________

Bathroom:

Shower curtain: _________ Wash clothes & towels: _________

Bath & wash accessories: _________ At least two others: _________

Housing Needs (Continued)

Miscellaneous:

Vacuum cleaner: _________ Broom & dustpan: _________

Mop: _________ Cleaning supplies: _________

Computer: _________ At least two others: _________

Overall Costs:

Kitchen: _________

Living room: _________

Bedroom: _________

Bathroom: _________

Miscellaneous: _________

Grand Total: _________

Find the costs of the following utilities/expenses and indicate where you found these prices:

Heat: _________

Water: _________

Electricity: _________

Cable or satellite television: _________

Internet: _________

Telephone or cell phone: _________

Grand Total: _________

Make sure that you include sales taxes (6%). To do so, multiply each total by .06

You’ll want to ensure of what utilities are already included with your apartment or house. Shop for the others.

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Part VII: Day to Day Living

Clothes: List all of the clothes that you would buy in a year. Don’t forget about boots, coats, etc. Find out how much each item costs. Add up the total. Divide the total by 12 to get the monthly clothing amount for your budget. Here is an example:

• 2 pair of jeans $64.00

• 5 t-shirts $75.00

• Steel-toe boots $120.00

 Entertainment: Estimate your monthly entertainment expenses by itemizing and then totaling

them.Here is an example:

• One movie ticket $8.00

• Restaurant (Dinner) $20.00

• Dance club $12.00

• NHL game $50.00

Note: The list above is an example only. Your monthly entertainment expenses should be different than what is shown above.

Toiletries: These may include: soap, shampoo, and toothpaste. In your written report, list at least five items that could fit into this category of expense.

Other: In your written report, list at least one other expense that you may incur that isn’t included elsewhere in your budget.

Are You a

Part VIII. Your Monthly Budget (Include this in your final report)

This is the heart of your ‘budget’ project. Have you been more than successful in balancing your financial affairs? It is suggested by financial advisors that you have 6 months of savings set aside in case something happens. As a result, any positive number is savings that can be used in the future.

Your ‘Monthly’ Income: $_________________________

‘Monthly’ (divide the annual taxes by 12) Taxes: $_________________________

Deductions: $_________________________

Vehicle expenses: $_________________________

Apartment expenses (if renting): $_________________________

Loan for (buying (if you didn’t rent) and furnishing) residence: $_________________________

Utilities: $_________________________

‘Monthly’ Food Expense: $_________________________

Clothes: $_________________________

Entertainment: $_________________________

Toiletries: $_________________________

Other: $_________________________

Total ‘Monthly’ Expenses: $_________________________

‘Monthly’ Income minus (-) Monthly expenses = (savings): $_________________________

To calculate your monthly budget, you’re encouraged to use a computer spreadsheet or a Word document. Whenever possible, use formulas and functions when creating your monthly budget.

Remember that this is a monthly budget! All figures represented in your report should be monthly figures. You will have to divide it by 12 if you have a yearly figure.

This is the number that matters!

Part IX. Reflect On You Budget (Include this in your final report) Directions: Answer the following questions about completing this project. 1. Was your budget balanced? Explain your answer.

_______________________________________________________ ______________________________________________________________________________________________________________

2. What was the most difficult part of the exercise? Why was it so difficult?

_______________________________________________________ ______________________________________________________________________________________________________________

3. What was the easiest part of the exercise? Why was it so easy?

______________________________________________________________________________________________________________ _______________________________________________________

4. What changes did you have to make in order for your budget to be balanced?

______________________________________________________________________________________________________________ _______________________________________________________

5. What changes could you make to either increase your income or lessen your expenses (while not dramatically changing your lifestyle)? Name 3.

1.

___________________________________________________

___________________________________________________

___________________________________________________

2.

___________________________________________________

___________________________________________________

___________________________________________________

3.

___________________________________________________

___________________________________________________

___________________________________________________

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Per

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Below Avg

. (12.

5 pts. - 0)

The student completed a written report and there was some evidence that

he/she made a serious attempt to complete most of

the work. There were numerous

errors found throughout the

report.

The student calculated some of his/her expenses.

There was a serious attempt to at least develop a budget.

The student provided some

evidence of his/her shopping abilities by creating at least half

of the portfolio of items that were

purchased.

The student’s product was

somewhat finished, but it failed to meet the requirements of the project and the expectations of the

teacher.

Average

(25 pts.

- 13)

The student completed a written

report and presented all of

his/her work. There were some errors

found.

The student calculated all of

his/her expenses. However, there were

some errors which resulted in an inaccurately

calculated budget.

The student provided evidence of

his/her shopping abilities and research by making a portfolio

of items that were purchased.

The student’s product was mostly

completed, but it lacked the quality and fell short of

meeting the expectations of the

teacher.

Good (37.50

pts. –

25.5)

The student typed the report and presented all of

his/her work. There were very few errors

found.

The student organized and

calculated all of his/her expenses.

The student’s budget was correct and

provided the student with the ability to

save money.

The student provided evidence of

his/her shopping abilities and research

by organizing a portfolio of almost

everything that was purchased including the house and the

car.

The student made a genuine effort to

produce a product of great quality, but there were several

small mistakes.

Outstandi

ng (50

pts. - 38)

The student typed the entire report and all of his/her work is

neatly and accurately presented.

The student used a spreadsheet to calculate all of

his/her expenses. As a result, the student correctly calculated his/her budget with the ability to save

money.

The student provided evidence of

his/her shopping abilities and research by neatly organizing

a portfolio of everything that was purchased including the house and the

car.

It’s obvious that the student went above

and beyond to complete this

project. The project exceeds or meets

the expectations of the teacher.

Typed Report Monthly Budget Portfolio Overall

Product

Pro

ject

: B

ud

get