Budgeting - mtsd.k12.nj.us
Budgeting HYPERLINK "" \l "collection-play&id=62c499e2-5b65-40da-935b-4eb62512d3f9&subject=featured&lessonId=1" \h 6.3 The Cost of CommutingActivityNameMonthly Cost of Car OwnershipOwning and using a car can be costly. Complete this activity to estimate the cost of car ownership for your budgeting activity. 1) Choose a carBased on your knowledge of vehicles and the research you just did on US News and World Report - HYPERLINK "" , choose a make, model, and year of car you’d like to purchase. What car is it? 2) Determine your Monthly Car PaymentsAs the video “How to Buy a Car” recommended, Edmonds - HYPERLINK "" is a great site for determining car prices. Visit the site and find the cost of your car.How much is your car estimated to cost?Interest rates and length of your auto loan will be determined when you purchase the car and depend on your credit score, the dealership or bank you’re using for financing, your preferences and how much you have available for a down payment, etc. For this exercise, visit Bankrate’s Interest Rate Roundup - for auto loans. What is the current average term and interest rate for your car (will depend if new or used)? Use the data you’ve gathered in questions 1-3 and Bankrate’s Auto Loan Calculator - HYPERLINK "" to determine your monthly car loan payment for your chosen car. How much will you pay per month for this car? At this point, if your car payment seems way too high in comparison to your monthly take-home pay, redo questions 1-4 until you find a vehicle you can afford. 3) Estimate your Cost of InsuranceAlthough there are many additional insurance coverage options that you can add to your policy, almost all drivers in the US are required to have liability insurance at the minimum. Watch this quick video - HYPERLINK "" on what is covered by liability insurance, so you understand what you’re paying for. Many factors contribute to the cost of your insurance: age, gender, state, type of car, whether you’re on your parents’ insurance, etc. To estimate the cost, visit - HYPERLINK "" . Use the chart by determining how many years of driving experience you’ll have once you graduate from college. The premium in the right hand column is an estimate of what your monthly insurance payments could be at that time.How much will insurance cost you per month? 4) Maintenance and Gas CostsMaintenance and gas costs are highly dependent on many factors that are quite difficult to estimate far in advance. For example, if you buy an old car or a high-end sports car, it will have much higher maintenance costs than a late model sedan. If you’re experienced in car maintenance, you can do some work yourself, whereas others might need to pay a mechanic for every problem. Gas costs will depend on how far you commute, the gas mileage on your vehicle, the ever fluctuating price of gas, and even your driving style. To get a quick, current, average figure, check out Bankrate’s Car Ownership Costs - for your state, which gives annual costs. Remember to use the state you said you’ll live in post-graduation.How much will maintenance cost you per month? How much will gas cost you per month? 5) Total Cost of Car OwnershipCar ownership can be quite expensive, and remember that money you spend here is money you cannot spend elsewhere in your budget. What will your total monthly car ownership costs be? What percent of your monthly take-home pay are you spending on car ownership? Are you comfortable with your car ownership spending each month? Again, if your car ownership costs seem way too high in comparison to your monthly take-home pay, redo this activity until you find a vehicle you can afford. 6) Revise Your Salary-Based BudgetGo back to your Salary-Based Budget project from Lesson 6.1 Budgeting Basics and revise the categories for Car Payment, Car Insurance, Car Maintenance, and Gas based on your budgeting knowledge and work within this activity. Remember, your ultimate goal is to end your complete budget with a surplus, and you’ve still got four budget lessons to complete. ................
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