PERSONAL BUDGET



PERSONAL BUDGET – Moving Out On Your OwnCongratulations! Flintstone Enterprises has just hired you for your first full-time job, at a starting salary of $38,400/year. Therefore, you are now ready to get a place of your own. The fun is just beginning! You will need to make some critical decisions regarding your living expenses. These decisions will include choosing an apartment, furnishing your apartment, and purchasing food, clothing, transportation and other goods and services.This assignment consists of four parts (Part A, B, C and D). You will be handing in all four parts.PART A: Monthly BudgetThe following monthly budget must be set up on a computer spreadsheet (Excel). Refer to the instructions in Part B, C, and D when calculating the amount to be included for each budget line. Whenever possible, use formulas and functions when creating your monthly budget. MONTHLY BUDGETMonthly Gross Income____________Monthly Expenses:Cable____________Clothes____________Entertainment____________Food (from Part C)____________Insurance ____________Internet____________Loan Repayment for Furnishings (from Part D)____________Other Expenses____________Rent____________Savings____________Taxes____________Telephone____________Toiletries____________Transportation____________Total Expenses____________Gross Income - Expenses____________An example of what your monthly budget should look like in Excel:PART B: Written ReportYou are required to hand in a report along with your monthly budget that explains how you calculated each number in your budget, and that answers any questions that are asked below. The report should be created using a word processor. It is important that you clearly and accurately present your work. Here is the information that you will need to help you prepare your written report and your monthly budget:Gross Income: Your annual gross income is $38,400; be sure to calculate a monthly amount.Cable: Your choices for cable are as follows. Make your choice and include the required amount of money in your monthly budget. Explain why you made the choice that you did.No Cable$00.00Basic$40.00Intermediate $60.00Deluxe$80.00Clothes:To calculate your monthly clothing budget:List all of the clothes that you wear in a year. Don’t forget about boots, coats, etc. Estimate how much each item would cost to buy. Add up the total. Divide the total by 12 to get the monthly clothing amount for your budget.Entertainment: Estimate your monthly entertainment expenses by itemizing and then totaling them.Here is an example:two movie passes$20.00restaurant with friend$20.00dance club$12.00weekly pickup hockey game$50.00Total:$102.00(Note: The list above is an example only. Your monthly entertainment expenses should be different than what is shown above.)Food: Include the monthly amount calculated in Part C of this assignment.Insurance:Everyone must have apartment insurance to cover cost of fire and theft. Assume that this will cost approximately $240 per year. Calculate the monthly charges.Internet: Your choices (per month) for Internet are as follows. Make your choice and include the required amount in your monthly budget. Explain why you made the choice that you did.No Internet - $00.00Light Usage - $30.00Extreme High-Speed - $60.00Loan Repayment for Furnishings:Include the monthly amount calculated in Part D of this assignment.Other Expenses:In your written report, list 10 other expenses that you may incur that aren’t included elsewhere in your budget. You do not need to find the price of these items. Include $100.00 in your budget to cover the cost of possible Other Expenses.Rent:Find an ad for a suitable apartment and paste the ad for the apartment in your written report. Be sure that the monthly charge for the apartment is clearly indicated. If the price for the apartment does not include utilities, add $50 to the cost of your monthly rent to cover utilities.Savings:It is important to save for the future. When completing your budget, you should set aside 10% of your monthly gross income for savings. Assume that this money is being set aside for the future. In your written report, provide three examples of long-term savings goals that this money could eventually be used for.Telephone: Chose from one of the following three options. Assume you already have a phone.If you require a basic phone plan for limited texting and a small number of phone calls, and you rarely make long-distance calls, budget $25 per month for telephone.If you require an intermediate phone plan because you want unlimited texting, you want some access to the Internet via your phone, and you talk on the phone sometimes, budget $50 per month for telephone.If you require a comprehensive phone plan because you want unlimited texting, you make many calls using your phone, you make long distance calls, and you want lots of access to the Internet via your phone, budget $80 per month for telephone.Taxes:Assume that 30% of your gross income will deducted from your pay to cover income taxes and other payroll deductions; include this amount in your monthly budget for taxes. In your written report, list the 3 deductions that an employer must make from the pay of a full-time employee, and list 2 other possible deductions that may occur.Toiletries/Medication:In your written report, list five items that could fit into this category of expense. You do not need to find the price of each item. In your monthly budget, include $50.00 to cover the cost of Toiletries and Medication.Transportation:Assume that you do not need a car for work. You can walk, bike, or take the bus. However, you may want a car for convenience and pleasure.Monthly Cost of Buying/Leasing a New Car:_______________ (calculated in class)Monthly Cost of Buying a Used Car for $10,000:_______________ (calculated in class)You can choose to have a new car or a used car, with a monthly cost as per our class discussion. If you choose not to have a car, then you must budget $100 per month to cover the cost of a bus pass, cab rides, etc. In your written report, be sure to explain the reason for the transportation choice that you made.Total Expenses: Use an Excel function to add up all of your expenses.Gross Income - Expenses: Use an Excel formula to calculate this number. This number should not be a negative number. If it is, then you must reduce some of your expenses. Any positive number is also savings that can be used in the future.*** In the next section, an example is shown of how your Written Report can be set up…PART B:Personal Budget – Written Report – John SampleGROSS INCOME:My annual gross income is $38,400. Therefore my monthly gross income is$38,400/12=$3,200.EXPENSES:Cable:I love watching television and want access to as many stations as possible, so I decided to include $80 for a deluxe cable television plan.Clothing:Here is a list of all of the clothes that I require for the year, with estimated prices:Item of ClothingNumber NeededPrice per ItemTotal PriceJeans3$50.00$150.00Pants5$50.00$550.00Shorts4$30.00$120.00T-shirts10$20.00$200.00>>>>>>>>>>>>>>>>>>>>>>TOTAL FOR YEAR$2400.00MONTHLY AMOUNT (budgeted amount)$2400/12=$200Entertainment:I plan to spend a total of $__________ per month on entertainment. Here is a list of my specific entertainment expenses per month:Food:My monthly budget for food is $385.50. Refer to the attached weekly menu and grocery list for details.*** Continue explaining each of the remaining budget lines as noted in Part B.PART C: Weekly Menu, Grocery List and Monthly Food ExpenseCreate a sample menu for the week. Present your menu in chart format. Here is an example, with one day filled in:Mon.Tues.Wed.Thurs.Fri.Sat.Sun.BreakfastSpecial K cerealmilkappleLunchham sandwichbaby carrotsdiet cokeSupperpiece of chickenpeaspotatoesorange juiceSnacksgranola bargrapesbag of chipsBelow your menu, include a grocery list that lists all of the items you will need to purchase in order to satisfy your weekly menu. Beside each grocery list item, include its price. Show the total amount of money needed to purchase your weekly amount of groceries. (Note that if you plan to eat out at a restaurant, indicate that on your weekly menu, but include the amount of money under your Entertainment expense.)To calculate your monthly Food expense, multiply the weekly amount of money you need for groceries by 4.5. This monthly amount for food should be included in your monthly budget (Part A).PART D: Obtaining a Loan to Furnish Your ApartmentAssume that you must acquire appliances and furniture to furnish your apartment. You will obtain a loan for the total amount of money needed to furnish your apartment. Below is a list of items needed to furnish your apartment. For this assignment, assume that you do not already own any of the items listed.Refrigerator (if your apartment does not include appliances)Stove (if your apartment does not include appliances)TelevisionComputerMicrowaveBedDresserKitchen Table and ChairsCouch and ChairDishesCutleryPots and Pans (your choice)Two sets of towels (you may add more)One set of sheets (you may add more)How much of a loan do you require? You must find the price for each of the items listed above. These items can be found in the classified section of the newspaper, in the penny saver, in flyers from retail stores, or on the Internet. You should create a chart that clearly indicates the name of each item, the price before and after taxes, and the source/store where you will buy the item from. At the bottom of your chart you should show the total amount of money that you need to purchase all of the items, which will be your Bank Loan Amount. Bank Loan Amount = ______________________Assume that you will be receiving a bank loan from The Loyal Bank of Van Dyk, and that you will have to pay back the loan by making a monthly payment for 2 years. Assume that the interest rate that will be charged on the loan is 7%.There is a mathematical formula that you can use to calculate how much you will have to pay every month in order to pay back the loan. However, an easier way to calculate the amount is to use one of the many websites that are available to make a loan repayment calculation.Monthly Loan Repayment =_______________________Include the Monthly Loan Repayment amount in your monthly budget (Part A). ................
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