ECONOMICS OF LIFE PROJECT



ECONOMICS OF LIFE PROJECT

PHASE II

DIRECTIONS

In Phase II you are going to research how much money it takes t survive in the “REAL WORLD”. You will use the Economics website links to get most of the information for this section. You will need to complete the FINANCIAL STATEMENT (neatly hand written), GROCERY LIST and MISCELLANEOUS LIST (typed).

You need to figure out your NET income or income AFTER TAXES. You need to extract from your GROSS the following percentages of federal income taxes.

A. $10,000-$29,999 15%

$30,000-$59,999 20%

$60,000-$74,999 30%

$75,000-UNLIMITED 40%

B. Ex: Multiply GROSS x Percentage of Income Tax

$30,000 x .20%= $6000

C. Subtract $6000 from GROSS of $30,000=$24,000, this is your NET income. Divide again by 12 to get your NET monthly income.

NOTE: Please keep in mind that in the REAL WORLD you would also play STATE, COUNTY and VILLAGE/TOWN Taxes and Medicare and Social Security taxes.

I. FIXED COST

1. Mortgage- Based on your NET MONTHLY income, research where you would like to and could afford to live. You must rule out purchasing a home before you consider renting an apartment.

a. Use or -

b. Use the MORTAGE CALCULATOR to figure out your monthly mortgage rate. Use 6% as the Interest rate. Use $3000 for Taxes.

2. Electric and Gas - Need to contact the Realtor or the Electric Company to find out the BUDGET BILLING for the SQUARE FOOTAGE of your home.

3. Cable/ Internet/Phone- Can be purchased individually or as a package don’t forget to figure in your cell phone bill. If your MOMMY pays for it now you need to find out the monthly cost to have your own plan.

a. Use Time Warner, Verizon, or Dish

b. Cell phone may be use instead of a land line.

4. Car/ Public Transportation-Remember this budget is based on five years from now so if you purchase a car you will have to take out a loan, for either used or new. Once you decide on what you want to drive calculate the monthly payment.

a. Use LOAN CALCULATOR. Select Car Loan vs. Lease Remember our SALES taxes are .0875.

b. Use to find a used or new car.

c. Bus- go to NFTA and get the cost for the Metro Pass

5. Insurance- AUTO/HEALTH- You need to acquire health insurance for yourself, unless the person you interviewed indicated that their employer provides it. In that case set aside $10-$20 per month for co-pays and medication. Acquire Auto insurance for yourself; remember that you are now approximately 23 year old.

a. Use to get your monthly health insurance rate

b. Use LOAN CALCULATOR then search Insurance, click on the second link and proceed to any insurance company that provides a free quote i.e.: All State.

6. Student Loans- Unless you receive a scholarship or expect financial aid you will need to calculate a monthly loan payment to pay for your college.

a. Use the LOAN CALCULATOR again to figure this out.

II. VARIABLE COSTS

1. After you have totaled up all of the above FIXED COSTS you can subtract this total from your MONTHLY INCOME. What you have left over is your DISPOSABLE INCOME to purchase your VARIABLE COSTS.

NOTE: You may look at this number and say to yourself there is no way I afford all the food, clothing and gasoline I need for a month. So go back and adjust your FIXED COSTS before you proceed.

2. FOOD/GROCERY- Use the grocery list to write down what you actually eat each day this will become your FOOD list. Most of these things will be purchased once a week so to make a monthly purchase you would buy 4 of each. Then you need to consider the GROCERY items -toilette paper, toothpaste, cleaning supplies, shampoo, deodorant, paper towels etc., most of these things will be purchased once a month.

a. Use WEGMAN’S link, you will need to create an account in order to create a shopping list. Don’t forget to save often. You will need to PRINT THIS LIST and turn in for a part of your PHASE II grade.

3. CLOTHING: This item you probably know the best, but keep in mind that you may have to DRESS for SUCCESS. Professionals dress professionally, Uniforms also have to be purchased, use . Other professions that do not have uniforms need to search Macy’s or JC Penney’s for suits or dresses. Don’t forget to plan for clothes in general.

4. MISCELLANEOUS- Create a realistic list with prices for the EXTRA stuff you will purchase over the course of a month. Things to consider are movies, dinning out (fast food), gasoline, car maintenance (used cars), gifts, cigarettes, “liquid refreshments” (you will be of age), league fees, club memberships, etc. Use LOAN CALCULATOR for gas cost and maintenance.

****YOU WILL TURN IN FOR A GRADE THE BUDGET SHEET, *****

TYPED GROCERY LIST AND MISCELLANEOUS LIST.

DUE DATE_________________

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