BUDGET ASSIGNMENT
A budget is an individual’s plan for spending. It is only a plan to help guide people in their financial situation. It often must be changed or expanded as different needs or emergencies arise. Obviously, it would also change with the family life cycle.
Ideally, a budget helps people to set up their priorities for fulfilling goals and will help to get more out of the money available and help reduce impulse spending.
Your assignment is to make a hypothetical plan of your own.
NOTE: Read all of the directions and information in this assignment before your begin.
ROLE THE DICE TO DETERMINE YOUR INCOME:
Calculate a monthly budget using the parameters below. All prices must be verified with evidence. You may have a partner for this project but it must be someone from class. Assume they are your roommate, live-in boyfriend/girlfriend, or spouse. You must also double all expenses except rent. Both of you must have your own car.
Your salary is as follows:
$30,000/year
$35,000/year
$40,000/year
$45,000/year
$50,000/year
$55,000/year
$18, 000/year -If you roll doubles your income will be that of a non-high school graduate
In the following assignment, work out your decisions in the pages that follow, listing the final answers on the next two pages. You may have to adjust your final figures.
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART A – INCOME
Earned income has been established for you. Divide by 12 to determine the monthly income. Earned income is salary paid for working. Two incomes may be combined from husband and wife or separate for an individual. Any part-time second jobs may also be added here.
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
PART B – FIXED EXPENSES
Housing, as a fixed expense, may be in the form of a mortgage payment for a house or condominium; rent for a house, apartment, dormitory, or room. Depending on the type of housing you choose, this item may also need to include interest on a mortgage and property taxes as well as the cost of heat and electricity. Search online real estate or rental ads for the area you plan to live and decide upon a housing situation for you. If you choose an apartment, cut and paste the ad or listing of actual information in the space below:
2. Insurance payments include the cost of premiums for any existing insurance policies. Include the costs of any types of insurance you feel are needed by you in this budget. List the separate types and costs here and the total monthly payments in your budget. (Note: Many types of insurance are paid in two or four payments per year, so you would need to determine the monthly cost.)
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Annuities: Amount:________________________Annual Cost:____________
Health Insurance:
Basic medical care: Annual Cost:____________
Major Medical care: Annual Cost:____________
HMO (name of):_____________________________ Annual Cost:____________
Disability Insurance: Annual Cost:____________
Property and Liability Insurances:
Automobile Insurance: Cost:_____________
Bodily Injury Insurance: Cost:_____________
Property Damage Liability: Cost:_____________
Collision Insurance: Cost:_____________
Comprehensive Coverage: Cost:_____________
Homeowner’s Insurance: Amount:________________ Cost:_____________
Renter’s Insurance: Amount: ___________________ Cost:_____________
Total Cost of Insurances: ____________________________________________
Fill in the amounts of insurance coverage you would need in the spaces above and the total monthly amount below. You may wish to buy all or none of this insurance coverage, depending on your transportation and housing decisions.
3. Debts as a fixed expense refers to a commitment you have made to repay a loan or a credit contract for the purchase of an automobile, major appliances, furniture, education, or any credit card charges. If you have no debts such as these, you may eliminate this from your budget. List a “0″ in the space. If you do, record the monthly expense In your budget.
4. Investments would be expenses for savings bonds or stocks or any other item like this that you might be paying monthly. If you do not want such investments, you may eliminate this item from your budget. If you do, record the monthly expense in your budget.
5. Taxes and services refer to taxes that have to be paid (apart from those that are withheld from warnings) for property, sidewalks, water and sewage services, trash removal, and other taxes beyond those withheld and services you must pay for. Depending upon the housing situation you have selected, these may or may not be included in your budget.
6. Pledges would include the amount you donate to your church, to community campaigns such as United Way, Red Cross, medical research organization, or other causes or projects that a person or family pledges to support with their money.
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
PART C – LIVING EXPENSES
1. Food expenses include the cost of food for preparation and use in the home as well as the cost of lunches at school, etc. It should also include an allocation for eating out in restaurants if this is an occasional or regular practice.
Using local newspaper ads for food prices, plan a week’s menu on the following page and estimate the price of the food and beverages you consume in one week. You may then multiply this amount by four to estimate the month’s expenses. If you would be eating out on any evening or any other meal, include this, the price, and the tip.
Example:
Day 1 Breakfast- cereal .50 Lunch- McDonald’s $6.75
Milk .25
Coffee .75 Dinner- $10.95
Banana .18 Banquet at church
$1.68
Total Cost for Day 1: $19.38
2. Clothing and care of clothing includes the cost of buying, laundering, cleaning, and maintaining clothing for you and/or your family. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Utilities include telephone, cable TV, and other home maintenance/operation expenses paid to outside agencies on a monthly basis. Your housing situation would determine how much or how little you would be paying for utilities. Check the item below that you would want on a regular basis and next to it list the monthly charge.
Telephone:____ Monthly charge: __________________Plus calls:________________
Cell phone:____ Monthly charge: __________________Plus calls:________________
Electricity:____ Monthly charge:___________________
Cable TV: ____ Monthly charge:___________________
Other: List:______________________________
4. Personal/health care includes the cost of prescriptions and medicines, eyeglasses, contact lenses, dental care, doctor’s fees, and other items for the maintenance of good health or the prevention/treatment of illness. Shampoos, deodorants, and other personal items would be included here also. Estimate the amount you need to spend on this item monthly.
5. Transportation expenses may be the cost of car operation, car pooling, public transportation, or whatever means you need to travel on regular daily activities. Car expenses would include the cost of gas and oil as well as the regular or emergency maintenance that is required with the operation of the car. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Recreation/entertainment includes the cost of hobbies as well as leisure time activities, books, tools as well as the cost of tickets to concerts, movies, sports events, etc. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
List what you would consider the average monthly cost for your recreation and entertainment.
7., 8., 9., 10. These items are all dependent upon your situation and vary greatly. If you had no furniture for college, apartment, or home, you might purchase second hand items, new items, or borrow from Mom or Dad. You might have some upkeep cost in your lifestyle. You might be attending night school or college or adult classes for fun. “Gifts” refers to birthday, anniversary, holiday presents which can often be costly in large families, so this item should be kept in mind in a budget. Any of these that would be actual expenses of yours should be included in your budget.
11. Allowance includes money for a person to use as s/he desires. It may be called “pocket money” or “incidentals”, but you should estimate how much you need on a monthly basis.
PART D – MONEY SET ASIDE
1. Emergency fund: _________________
2. Seasonal expenses (Christmas Club): _________________
3. Savings: _________________
TOTAL MONEY SET ASIDE: _________________
PART D – MONEY SET ASIDE
1. Emergency fund represents short-term savings. This is an amount of money that is regularly set aside as a resource of available cash to draw upon for any type of emergency. Families would probably make more use of this item in their budget than an individual. If you would choose to have an emergency fund, list the amount monthly set aside for this purpose.
2. Seasonal expenses would be savings for a heavy expense time of the year such as Christmas or vacations. Many people choose to join Christmas clubs or time plans for oil bills or vacation funds to save ahead for what they can anticipate as major expenses one time of the year. If you would include this item in your budget, list the amount.
3. Last, but not least, is savings. Usually whatever money is left after all of this can be set aside for savings. There are many types of savings plans today with which banks can make you familiar. The trouble is that unless this is included as a budget item, many people are never able to save or take advantage of the many savings plans that are available. Consider this item carefully and estimate how much you would allot to this budget item.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MONTHLY SUMMARY:
TOTAL INCOME: _________________
TOTAL EXPENSES: _________________
TOTAL EXTRA MONEY: _________________
Balanced? _________Yes __________No
Budget Worksheet
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Annuities: Amount:________________________Annual Cost:____________
Health Insurance:
Basic medical care: Annual Cost:____________
Major Medical care: Annual Cost:____________
HMO (name of):_____________________________ Annual Cost:____________
Disability Insurance: Annual Cost:____________
Property and Liability Insurances:
Automobile Insurance: Cost:_____________
Bodily Injury Insurance: Cost:_____________
Property Damage Liability: Cost:_____________
Collision Insurance: Cost:_____________
Comprehensive Coverage: Cost:_____________
Homeowner’s Insurance: Amount:________________ Cost:_____________
Renter’s Insurance: Amount: ___________________ Cost:_____________
Total Cost of Insurances: ____________________________________________
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
2. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Check the item below that you would want on a regular basis and next to it list the monthly charge.
Telephone:____ Monthly charge: __________________Plus calls:________________
Cell phone:____ Monthly charge: __________________Plus calls:________________
Electricity:____ Monthly charge:___________________
Cable TV: ____ Monthly charge:___________________
Other: List:______________________________
5. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
PART D – MONEY SET ASIDE
1. Emergency fund: _________________
2. Seasonal expenses (Christmas Club): _________________
3. Savings: _________________
TOTAL MONEY SET ASIDE: _________________
MONTHLY SUMMARY:
TOTAL INCOME: _________________
TOTAL EXPENSES: _________________
TOTAL EXTRA MONEY: _________________
Balanced? _________Yes __________No
SUMMARY. Your budget will be complete after all of these factors have been considered and amounts established. Total your income and expenses. These should be balanced or with a little extra in the income area. If not, some plan will have to be decided upon to make the difference or to cut back on some area of the budget.
Then, summarize what you have learned from this budget assignment about:
1. Scarcity and Opportunity Cost – this is the idea that anytime we have to decide between one thing or another, there is an opportunity cost to our decision. For instance, if you have $15, and you need to decide if you should spend it on going to the movies with your friend or buying toilet paper and kleenex for the bathroom, there would be opportunity costs for either choice. If you buy the toilet paper and kleenex, the cost to you is that you missed out on time with your friends. If you choose to go the movie and go without toilet paper and tissue, then the cost to you is a rather uncomfortable bathroom situation. What did you learn about opportunity costs and scarcity through this budget project? What choices did you have to make? What did you have to give up?
2. Marginal Cost and Marginal Benefit – this is the idea that there is a cost to producing one more of anything, but there is also a benefit to producing more of something. Think of the choices you made in your budget. Did you ever choose MORE of something, even though it cost you more? If so, what were the benefits of choosing more?
3. If you chose to pay for insurance and investments, why did you choose them? If you did not, what risks are you putting yourself into by not having insurance and investments?
4. What did you learn about yourself and your economic choices through this assignment?
BUDGET ASSIGNMENT
A budget is an individual’s plan for spending. It is only a plan to help guide people in their financial situation. It often must be changed or expanded as different needs or emergencies arise. Obviously, it would also change with the family life cycle.
Ideally, a budget helps people to set up their priorities for fulfilling goals and will help to get more out of the money available and help reduce impulse spending.
Your assignment is to make a hypothetical plan of your own.
NOTE: Read all of the directions and information in this assignment before your begin.
ROLE THE DICE TO DETERMINE YOUR INCOME:
Calculate a monthly budget using the parameters below. All prices must be verified with evidence. You may have a partner for this project but it must be someone from class. Assume they are your roommate, live-in boyfriend/girlfriend, or spouse. You must also double all expenses except rent. Both of you must have your own car.
Your salary is as follows:
$30,000/year
$35,000/year
$40,000/year
$45,000/year
$50,000/year
$55,000/year
$18, 000/year -If you roll doubles your income will be that of a non-high school graduate
In the following assignment, work out your decisions in the pages that follow, listing the final answers on the next two pages. You may have to adjust your final figures.
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART A – INCOME
Earned income has been established for you. Divide by 12 to determine the monthly income. Earned income is salary paid for working. Two incomes may be combined from husband and wife or separate for an individual. Any part-time second jobs may also be added here.
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
PART B – FIXED EXPENSES
Housing, as a fixed expense, may be in the form of a mortgage payment for a house or condominium; rent for a house, apartment, dormitory, or room. Depending on the type of housing you choose, this item may also need to include interest on a mortgage and property taxes as well as the cost of heat and electricity. Search online real estate or rental ads for the area you plan to live and decide upon a housing situation for you. If you choose an apartment, cut and paste the ad or listing of actual information in the space below:
2. Insurance payments include the cost of premiums for any existing insurance policies. Include the costs of any types of insurance you feel are needed by you in this budget. List the separate types and costs here and the total monthly payments in your budget. (Note: Many types of insurance are paid in two or four payments per year, so you would need to determine the monthly cost.)
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Annuities: Amount:________________________Annual Cost:____________
Health Insurance:
Basic medical care: Annual Cost:____________
Major Medical care: Annual Cost:____________
HMO (name of):_____________________________ Annual Cost:____________
Disability Insurance: Annual Cost:____________
Property and Liability Insurances:
Automobile Insurance: Cost:_____________
Bodily Injury Insurance: Cost:_____________
Property Damage Liability: Cost:_____________
Collision Insurance: Cost:_____________
Comprehensive Coverage: Cost:_____________
Homeowner’s Insurance: Amount:________________ Cost:_____________
Renter’s Insurance: Amount: ___________________ Cost:_____________
Total Cost of Insurances: ____________________________________________
Fill in the amounts of insurance coverage you would need in the spaces above and the total monthly amount below. You may wish to buy all or none of this insurance coverage, depending on your transportation and housing decisions.
3. Debts as a fixed expense refers to a commitment you have made to repay a loan or a credit contract for the purchase of an automobile, major appliances, furniture, education, or any credit card charges. If you have no debts such as these, you may eliminate this from your budget. List a “0″ in the space. If you do, record the monthly expense In your budget.
4. Investments would be expenses for savings bonds or stocks or any other item like this that you might be paying monthly. If you do not want such investments, you may eliminate this item from your budget. If you do, record the monthly expense in your budget.
5. Taxes and services refer to taxes that have to be paid (apart from those that are withheld from warnings) for property, sidewalks, water and sewage services, trash removal, and other taxes beyond those withheld and services you must pay for. Depending upon the housing situation you have selected, these may or may not be included in your budget.
6. Pledges would include the amount you donate to your church, to community campaigns such as United Way, Red Cross, medical research organization, or other causes or projects that a person or family pledges to support with their money.
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
PART C – LIVING EXPENSES
1. Food expenses include the cost of food for preparation and use in the home as well as the cost of lunches at school, etc. It should also include an allocation for eating out in restaurants if this is an occasional or regular practice.
Using local newspaper ads for food prices, plan a week’s menu on the following page and estimate the price of the food and beverages you consume in one week. You may then multiply this amount by four to estimate the month’s expenses. If you would be eating out on any evening or any other meal, include this, the price, and the tip.
Example:
Day 1 Breakfast- cereal .50 Lunch- McDonald’s $6.75
Milk .25
Coffee .75 Dinner- $10.95
Banana .18 Banquet at church
$1.68
Total Cost for Day 1: $19.38
2. Clothing and care of clothing includes the cost of buying, laundering, cleaning, and maintaining clothing for you and/or your family. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Utilities include telephone, cable TV, and other home maintenance/operation expenses paid to outside agencies on a monthly basis. Your housing situation would determine how much or how little you would be paying for utilities. Check the item below that you would want on a regular basis and next to it list the monthly charge.
Telephone:____ Monthly charge: __________________Plus calls:________________
Cell phone:____ Monthly charge: __________________Plus calls:________________
Electricity:____ Monthly charge:___________________
Cable TV: ____ Monthly charge:___________________
Other: List:______________________________
4. Personal/health care includes the cost of prescriptions and medicines, eyeglasses, contact lenses, dental care, doctor’s fees, and other items for the maintenance of good health or the prevention/treatment of illness. Shampoos, deodorants, and other personal items would be included here also. Estimate the amount you need to spend on this item monthly.
5. Transportation expenses may be the cost of car operation, car pooling, public transportation, or whatever means you need to travel on regular daily activities. Car expenses would include the cost of gas and oil as well as the regular or emergency maintenance that is required with the operation of the car. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Recreation/entertainment includes the cost of hobbies as well as leisure time activities, books, tools as well as the cost of tickets to concerts, movies, sports events, etc. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
List what you would consider the average monthly cost for your recreation and entertainment.
7., 8., 9., 10. These items are all dependent upon your situation and vary greatly. If you had no furniture for college, apartment, or home, you might purchase second hand items, new items, or borrow from Mom or Dad. You might have some upkeep cost in your lifestyle. You might be attending night school or college or adult classes for fun. “Gifts” refers to birthday, anniversary, holiday presents which can often be costly in large families, so this item should be kept in mind in a budget. Any of these that would be actual expenses of yours should be included in your budget.
11. Allowance includes money for a person to use as s/he desires. It may be called “pocket money” or “incidentals”, but you should estimate how much you need on a monthly basis.
PART D – MONEY SET ASIDE
1. Emergency fund: _________________
2. Seasonal expenses (Christmas Club): _________________
3. Savings: _________________
TOTAL MONEY SET ASIDE: _________________
PART D – MONEY SET ASIDE
1. Emergency fund represents short-term savings. This is an amount of money that is regularly set aside as a resource of available cash to draw upon for any type of emergency. Families would probably make more use of this item in their budget than an individual. If you would choose to have an emergency fund, list the amount monthly set aside for this purpose.
2. Seasonal expenses would be savings for a heavy expense time of the year such as Christmas or vacations. Many people choose to join Christmas clubs or time plans for oil bills or vacation funds to save ahead for what they can anticipate as major expenses one time of the year. If you would include this item in your budget, list the amount.
3. Last, but not least, is savings. Usually whatever money is left after all of this can be set aside for savings. There are many types of savings plans today with which banks can make you familiar. The trouble is that unless this is included as a budget item, many people are never able to save or take advantage of the many savings plans that are available. Consider this item carefully and estimate how much you would allot to this budget item.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MONTHLY SUMMARY:
TOTAL INCOME: _________________
TOTAL EXPENSES: _________________
TOTAL EXTRA MONEY: _________________
Balanced? _________Yes __________No
Budget Worksheet
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Annuities: Amount:________________________Annual Cost:____________
Health Insurance:
Basic medical care: Annual Cost:____________
Major Medical care: Annual Cost:____________
HMO (name of):_____________________________ Annual Cost:____________
Disability Insurance: Annual Cost:____________
Property and Liability Insurances:
Automobile Insurance: Cost:_____________
Bodily Injury Insurance: Cost:_____________
Property Damage Liability: Cost:_____________
Collision Insurance: Cost:_____________
Comprehensive Coverage: Cost:_____________
Homeowner’s Insurance: Amount:________________ Cost:_____________
Renter’s Insurance: Amount: ___________________ Cost:_____________
Total Cost of Insurances: ____________________________________________
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
2. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Check the item below that you would want on a regular basis and next to it list the monthly charge.
Telephone:____ Monthly charge: __________________Plus calls:________________
Cell phone:____ Monthly charge: __________________Plus calls:________________
Electricity:____ Monthly charge:___________________
Cable TV: ____ Monthly charge:___________________
Other: List:______________________________
5. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
PART D – MONEY SET ASIDE
1. Emergency fund: _________________
2. Seasonal expenses (Christmas Club): _________________
3. Savings: _________________
TOTAL MONEY SET ASIDE: _________________
MONTHLY SUMMARY:
TOTAL INCOME: _________________
TOTAL EXPENSES: _________________
TOTAL EXTRA MONEY: _________________
Balanced? _________Yes __________No
SUMMARY. Your budget will be complete after all of these factors have been considered and amounts established. Total your income and expenses. These should be balanced or with a little extra in the income area. If not, some plan will have to be decided upon to make the difference or to cut back on some area of the budget.
Then, summarize what you have learned from this budget assignment about:
1. Scarcity and Opportunity Cost – this is the idea that anytime we have to decide between one thing or another, there is an opportunity cost to our decision. For instance, if you have $15, and you need to decide if you should spend it on going to the movies with your friend or buying toilet paper and kleenex for the bathroom, there would be opportunity costs for either choice. If you buy the toilet paper and kleenex, the cost to you is that you missed out on time with your friends. If you choose to go the movie and go without toilet paper and tissue, then the cost to you is a rather uncomfortable bathroom situation. What did you learn about opportunity costs and scarcity through this budget project? What choices did you have to make? What did you have to give up?
2. Marginal Cost and Marginal Benefit – this is the idea that there is a cost to producing one more of anything, but there is also a benefit to producing more of something. Think of the choices you made in your budget. Did you ever choose MORE of something, even though it cost you more? If so, what were the benefits of choosing more?
3. If you chose to pay for insurance and investments, why did you choose them? If you did not, what risks are you putting yourself into by not having insurance and investments?
4. What did you learn about yourself and your economic choices through this assignment?
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BUDGET ASSIGNMENT
A budget is an individual’s plan for spending. It is only a plan to help guide people in their financial situation. It often must be changed or expanded as different needs or emergencies arise. Obviously, it would also change with the family life cycle.
Ideally, a budget helps people to set up their priorities for fulfilling goals and will help to get more out of the money available and help reduce impulse spending.
Your assignment is to make a hypothetical plan of your own.
NOTE: Read all of the directions and information in this assignment before your begin.
ROLE THE DICE TO DETERMINE YOUR INCOME:
Calculate a monthly budget using the parameters below. All prices must be verified with evidence. You may have a partner for this project but it must be someone from class. Assume they are your roommate, live-in boyfriend/girlfriend, or spouse. You must also double all expenses except rent. Both of you must have your own car.
Your salary is as follows:
$30,000/year
$35,000/year
$40,000/year
$45,000/year
$50,000/year
$55,000/year
$18, 000/year -If you roll doubles your income will be that of a non-high school graduate
In the following assignment, work out your decisions in the pages that follow, listing the final answers on the next two pages. You may have to adjust your final figures.
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART A – INCOME
Earned income has been established for you. Divide by 12 to determine the monthly income. Earned income is salary paid for working. Two incomes may be combined from husband and wife or separate for an individual. Any part-time second jobs may also be added here.
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
PART B – FIXED EXPENSES
Housing, as a fixed expense, may be in the form of a mortgage payment for a house or condominium; rent for a house, apartment, dormitory, or room. Depending on the type of housing you choose, this item may also need to include interest on a mortgage and property taxes as well as the cost of heat and electricity. Search online real estate or rental ads for the area you plan to live and decide upon a housing situation for you. If you choose an apartment, cut and paste the ad or listing of actual information in the space below:
2. Insurance payments include the cost of premiums for any existing insurance policies. Include the costs of any types of insurance you feel are needed by you in this budget. List the separate types and costs here and the total monthly payments in your budget. (Note: Many types of insurance are paid in two or four payments per year, so you would need to determine the monthly cost.)
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Annuities: Amount:________________________Annual Cost:____________
Health Insurance:
Basic medical care: Annual Cost:____________
Major Medical care: Annual Cost:____________
HMO (name of):_____________________________ Annual Cost:____________
Disability Insurance: Annual Cost:____________
Property and Liability Insurances:
Automobile Insurance: Cost:_____________
Bodily Injury Insurance: Cost:_____________
Property Damage Liability: Cost:_____________
Collision Insurance: Cost:_____________
Comprehensive Coverage: Cost:_____________
Homeowner’s Insurance: Amount:________________ Cost:_____________
Renter’s Insurance: Amount: ___________________ Cost:_____________
Total Cost of Insurances: ____________________________________________
Fill in the amounts of insurance coverage you would need in the spaces above and the total monthly amount below. You may wish to buy all or none of this insurance coverage, depending on your transportation and housing decisions.
3. Debts as a fixed expense refers to a commitment you have made to repay a loan or a credit contract for the purchase of an automobile, major appliances, furniture, education, or any credit card charges. If you have no debts such as these, you may eliminate this from your budget. List a “0″ in the space. If you do, record the monthly expense In your budget.
4. Investments would be expenses for savings bonds or stocks or any other item like this that you might be paying monthly. If you do not want such investments, you may eliminate this item from your budget. If you do, record the monthly expense in your budget.
5. Taxes and services refer to taxes that have to be paid (apart from those that are withheld from warnings) for property, sidewalks, water and sewage services, trash removal, and other taxes beyond those withheld and services you must pay for. Depending upon the housing situation you have selected, these may or may not be included in your budget.
6. Pledges would include the amount you donate to your church, to community campaigns such as United Way, Red Cross, medical research organization, or other causes or projects that a person or family pledges to support with their money.
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
PART C – LIVING EXPENSES
1. Food expenses include the cost of food for preparation and use in the home as well as the cost of lunches at school, etc. It should also include an allocation for eating out in restaurants if this is an occasional or regular practice.
Using local newspaper ads for food prices, plan a week’s menu on the following page and estimate the price of the food and beverages you consume in one week. You may then multiply this amount by four to estimate the month’s expenses. If you would be eating out on any evening or any other meal, include this, the price, and the tip.
Example:
Day 1 Breakfast- cereal .50 Lunch- McDonald’s $6.75
Milk .25
Coffee .75 Dinner- $10.95
Banana .18 Banquet at church
$1.68
Total Cost for Day 1: $19.38
2. Clothing and care of clothing includes the cost of buying, laundering, cleaning, and maintaining clothing for you and/or your family. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Utilities include telephone, cable TV, and other home maintenance/operation expenses paid to outside agencies on a monthly basis. Your housing situation would determine how much or how little you would be paying for utilities. Check the item below that you would want on a regular basis and next to it list the monthly charge.
Telephone:____ Monthly charge: __________________Plus calls:________________
Cell phone:____ Monthly charge: __________________Plus calls:________________
Electricity:____ Monthly charge:___________________
Cable TV: ____ Monthly charge:___________________
Other: List:______________________________
4. Personal/health care includes the cost of prescriptions and medicines, eyeglasses, contact lenses, dental care, doctor’s fees, and other items for the maintenance of good health or the prevention/treatment of illness. Shampoos, deodorants, and other personal items would be included here also. Estimate the amount you need to spend on this item monthly.
5. Transportation expenses may be the cost of car operation, car pooling, public transportation, or whatever means you need to travel on regular daily activities. Car expenses would include the cost of gas and oil as well as the regular or emergency maintenance that is required with the operation of the car. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Recreation/entertainment includes the cost of hobbies as well as leisure time activities, books, tools as well as the cost of tickets to concerts, movies, sports events, etc. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
List what you would consider the average monthly cost for your recreation and entertainment.
7., 8., 9., 10. These items are all dependent upon your situation and vary greatly. If you had no furniture for college, apartment, or home, you might purchase second hand items, new items, or borrow from Mom or Dad. You might have some upkeep cost in your lifestyle. You might be attending night school or college or adult classes for fun. “Gifts” refers to birthday, anniversary, holiday presents which can often be costly in large families, so this item should be kept in mind in a budget. Any of these that would be actual expenses of yours should be included in your budget.
11. Allowance includes money for a person to use as s/he desires. It may be called “pocket money” or “incidentals”, but you should estimate how much you need on a monthly basis.
PART D – MONEY SET ASIDE
1. Emergency fund: _________________
2. Seasonal expenses (Christmas Club): _________________
3. Savings: _________________
TOTAL MONEY SET ASIDE: _________________
PART D – MONEY SET ASIDE
1. Emergency fund represents short-term savings. This is an amount of money that is regularly set aside as a resource of available cash to draw upon for any type of emergency. Families would probably make more use of this item in their budget than an individual. If you would choose to have an emergency fund, list the amount monthly set aside for this purpose.
2. Seasonal expenses would be savings for a heavy expense time of the year such as Christmas or vacations. Many people choose to join Christmas clubs or time plans for oil bills or vacation funds to save ahead for what they can anticipate as major expenses one time of the year. If you would include this item in your budget, list the amount.
3. Last, but not least, is savings. Usually whatever money is left after all of this can be set aside for savings. There are many types of savings plans today with which banks can make you familiar. The trouble is that unless this is included as a budget item, many people are never able to save or take advantage of the many savings plans that are available. Consider this item carefully and estimate how much you would allot to this budget item.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MONTHLY SUMMARY:
TOTAL INCOME: _________________
TOTAL EXPENSES: _________________
TOTAL EXTRA MONEY: _________________
Balanced? _________Yes __________No
Budget Worksheet
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Annuities: Amount:________________________Annual Cost:____________
Health Insurance:
Basic medical care: Annual Cost:____________
Major Medical care: Annual Cost:____________
HMO (name of):_____________________________ Annual Cost:____________
Disability Insurance: Annual Cost:____________
Property and Liability Insurances:
Automobile Insurance: Cost:_____________
Bodily Injury Insurance: Cost:_____________
Property Damage Liability: Cost:_____________
Collision Insurance: Cost:_____________
Comprehensive Coverage: Cost:_____________
Homeowner’s Insurance: Amount:________________ Cost:_____________
Renter’s Insurance: Amount: ___________________ Cost:_____________
Total Cost of Insurances: ____________________________________________
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
2. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Check the item below that you would want on a regular basis and next to it list the monthly charge.
Telephone:____ Monthly charge: __________________Plus calls:________________
Cell phone:____ Monthly charge: __________________Plus calls:________________
Electricity:____ Monthly charge:___________________
Cable TV: ____ Monthly charge:___________________
Other: List:______________________________
5. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
PART D – MONEY SET ASIDE
1. Emergency fund: _________________
2. Seasonal expenses (Christmas Club): _________________
3. Savings: _________________
TOTAL MONEY SET ASIDE: _________________
MONTHLY SUMMARY:
TOTAL INCOME: _________________
TOTAL EXPENSES: _________________
TOTAL EXTRA MONEY: _________________
Balanced? _________Yes __________No
SUMMARY. Your budget will be complete after all of these factors have been considered and amounts established. Total your income and expenses. These should be balanced or with a little extra in the income area. If not, some plan will have to be decided upon to make the difference or to cut back on some area of the budget.
Then, summarize what you have learned from this budget assignment about:
1. Scarcity and Opportunity Cost – this is the idea that anytime we have to decide between one thing or another, there is an opportunity cost to our decision. For instance, if you have $15, and you need to decide if you should spend it on going to the movies with your friend or buying toilet paper and kleenex for the bathroom, there would be opportunity costs for either choice. If you buy the toilet paper and kleenex, the cost to you is that you missed out on time with your friends. If you choose to go the movie and go without toilet paper and tissue, then the cost to you is a rather uncomfortable bathroom situation. What did you learn about opportunity costs and scarcity through this budget project? What choices did you have to make? What did you have to give up?
2. Marginal Cost and Marginal Benefit – this is the idea that there is a cost to producing one more of anything, but there is also a benefit to producing more of something. Think of the choices you made in your budget. Did you ever choose MORE of something, even though it cost you more? If so, what were the benefits of choosing more?
3. If you chose to pay for insurance and investments, why did you choose them? If you did not, what risks are you putting yourself into by not having insurance and investments?
4. What did you learn about yourself and your economic choices through this assignment?
BUDGET ASSIGNMENT
A budget is an individual’s plan for spending. It is only a plan to help guide people in their financial situation. It often must be changed or expanded as different needs or emergencies arise. Obviously, it would also change with the family life cycle.
Ideally, a budget helps people to set up their priorities for fulfilling goals and will help to get more out of the money available and help reduce impulse spending.
Your assignment is to make a hypothetical plan of your own.
NOTE: Read all of the directions and information in this assignment before your begin.
ROLE THE DICE TO DETERMINE YOUR INCOME:
Calculate a monthly budget using the parameters below. All prices must be verified with evidence. You may have a partner for this project but it must be someone from class. Assume they are your roommate, live-in boyfriend/girlfriend, or spouse. You must also double all expenses except rent. Both of you must have your own car.
Your salary is as follows:
$30,000/year
$35,000/year
$40,000/year
$45,000/year
$50,000/year
$55,000/year
$18, 000/year -If you roll doubles your income will be that of a non-high school graduate
In the following assignment, work out your decisions in the pages that follow, listing the final answers on the next two pages. You may have to adjust your final figures.
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART A – INCOME
Earned income has been established for you. Divide by 12 to determine the monthly income. Earned income is salary paid for working. Two incomes may be combined from husband and wife or separate for an individual. Any part-time second jobs may also be added here.
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
PART B – FIXED EXPENSES
Housing, as a fixed expense, may be in the form of a mortgage payment for a house or condominium; rent for a house, apartment, dormitory, or room. Depending on the type of housing you choose, this item may also need to include interest on a mortgage and property taxes as well as the cost of heat and electricity. Search online real estate or rental ads for the area you plan to live and decide upon a housing situation for you. If you choose an apartment, cut and paste the ad or listing of actual information in the space below:
2. Insurance payments include the cost of premiums for any existing insurance policies. Include the costs of any types of insurance you feel are needed by you in this budget. List the separate types and costs here and the total monthly payments in your budget. (Note: Many types of insurance are paid in two or four payments per year, so you would need to determine the monthly cost.)
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Annuities: Amount:________________________Annual Cost:____________
Health Insurance:
Basic medical care: Annual Cost:____________
Major Medical care: Annual Cost:____________
HMO (name of):_____________________________ Annual Cost:____________
Disability Insurance: Annual Cost:____________
Property and Liability Insurances:
Automobile Insurance: Cost:_____________
Bodily Injury Insurance: Cost:_____________
Property Damage Liability: Cost:_____________
Collision Insurance: Cost:_____________
Comprehensive Coverage: Cost:_____________
Homeowner’s Insurance: Amount:________________ Cost:_____________
Renter’s Insurance: Amount: ___________________ Cost:_____________
Total Cost of Insurances: ____________________________________________
Fill in the amounts of insurance coverage you would need in the spaces above and the total monthly amount below. You may wish to buy all or none of this insurance coverage, depending on your transportation and housing decisions.
3. Debts as a fixed expense refers to a commitment you have made to repay a loan or a credit contract for the purchase of an automobile, major appliances, furniture, education, or any credit card charges. If you have no debts such as these, you may eliminate this from your budget. List a “0″ in the space. If you do, record the monthly expense In your budget.
4. Investments would be expenses for savings bonds or stocks or any other item like this that you might be paying monthly. If you do not want such investments, you may eliminate this item from your budget. If you do, record the monthly expense in your budget.
5. Taxes and services refer to taxes that have to be paid (apart from those that are withheld from warnings) for property, sidewalks, water and sewage services, trash removal, and other taxes beyond those withheld and services you must pay for. Depending upon the housing situation you have selected, these may or may not be included in your budget.
6. Pledges would include the amount you donate to your church, to community campaigns such as United Way, Red Cross, medical research organization, or other causes or projects that a person or family pledges to support with their money.
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
PART C – LIVING EXPENSES
1. Food expenses include the cost of food for preparation and use in the home as well as the cost of lunches at school, etc. It should also include an allocation for eating out in restaurants if this is an occasional or regular practice.
Using local newspaper ads for food prices, plan a week’s menu on the following page and estimate the price of the food and beverages you consume in one week. You may then multiply this amount by four to estimate the month’s expenses. If you would be eating out on any evening or any other meal, include this, the price, and the tip.
Example:
Day 1 Breakfast- cereal .50 Lunch- McDonald’s $6.75
Milk .25
Coffee .75 Dinner- $10.95
Banana .18 Banquet at church
$1.68
Total Cost for Day 1: $19.38
2. Clothing and care of clothing includes the cost of buying, laundering, cleaning, and maintaining clothing for you and/or your family. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Utilities include telephone, cable TV, and other home maintenance/operation expenses paid to outside agencies on a monthly basis. Your housing situation would determine how much or how little you would be paying for utilities. Check the item below that you would want on a regular basis and next to it list the monthly charge.
Telephone:____ Monthly charge: __________________Plus calls:________________
Cell phone:____ Monthly charge: __________________Plus calls:________________
Electricity:____ Monthly charge:___________________
Cable TV: ____ Monthly charge:___________________
Other: List:______________________________
4. Personal/health care includes the cost of prescriptions and medicines, eyeglasses, contact lenses, dental care, doctor’s fees, and other items for the maintenance of good health or the prevention/treatment of illness. Shampoos, deodorants, and other personal items would be included here also. Estimate the amount you need to spend on this item monthly.
5. Transportation expenses may be the cost of car operation, car pooling, public transportation, or whatever means you need to travel on regular daily activities. Car expenses would include the cost of gas and oil as well as the regular or emergency maintenance that is required with the operation of the car. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Recreation/entertainment includes the cost of hobbies as well as leisure time activities, books, tools as well as the cost of tickets to concerts, movies, sports events, etc. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
List what you would consider the average monthly cost for your recreation and entertainment.
7., 8., 9., 10. These items are all dependent upon your situation and vary greatly. If you had no furniture for college, apartment, or home, you might purchase second hand items, new items, or borrow from Mom or Dad. You might have some upkeep cost in your lifestyle. You might be attending night school or college or adult classes for fun. “Gifts” refers to birthday, anniversary, holiday presents which can often be costly in large families, so this item should be kept in mind in a budget. Any of these that would be actual expenses of yours should be included in your budget.
11. Allowance includes money for a person to use as s/he desires. It may be called “pocket money” or “incidentals”, but you should estimate how much you need on a monthly basis.
PART D – MONEY SET ASIDE
1. Emergency fund: _________________
2. Seasonal expenses (Christmas Club): _________________
3. Savings: _________________
TOTAL MONEY SET ASIDE: _________________
PART D – MONEY SET ASIDE
1. Emergency fund represents short-term savings. This is an amount of money that is regularly set aside as a resource of available cash to draw upon for any type of emergency. Families would probably make more use of this item in their budget than an individual. If you would choose to have an emergency fund, list the amount monthly set aside for this purpose.
2. Seasonal expenses would be savings for a heavy expense time of the year such as Christmas or vacations. Many people choose to join Christmas clubs or time plans for oil bills or vacation funds to save ahead for what they can anticipate as major expenses one time of the year. If you would include this item in your budget, list the amount.
3. Last, but not least, is savings. Usually whatever money is left after all of this can be set aside for savings. There are many types of savings plans today with which banks can make you familiar. The trouble is that unless this is included as a budget item, many people are never able to save or take advantage of the many savings plans that are available. Consider this item carefully and estimate how much you would allot to this budget item.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
MONTHLY SUMMARY:
TOTAL INCOME: _________________
TOTAL EXPENSES: _________________
TOTAL EXTRA MONEY: _________________
Balanced? _________Yes __________No
Budget Worksheet
PART A – INCOME
Determine your earned monthly income: _________________
Multiply by .75 to get your monthly income after taxes: ____________
TOTAL MONTHLY INCOME: _________________
PART B – FIXED EXPENSES
1. Housing (Monthly rent or mortgage): _________________
2. Insurance Payments: _________________
3. Debts: _________________
4. Investments: _________________
5. Taxes and services: _________________
6. Pledges: _________________
TOTAL FIXED EXPENSES: _________________
Life insurance:
Term insurance (amount of coverage):____________Annual Cost:____________
Whole life or other life insurance amount:_________Annual Cost:____________
Annuities: Amount:________________________Annual Cost:____________
Health Insurance:
Basic medical care: Annual Cost:____________
Major Medical care: Annual Cost:____________
HMO (name of):_____________________________ Annual Cost:____________
Disability Insurance: Annual Cost:____________
Property and Liability Insurances:
Automobile Insurance: Cost:_____________
Bodily Injury Insurance: Cost:_____________
Property Damage Liability: Cost:_____________
Collision Insurance: Cost:_____________
Comprehensive Coverage: Cost:_____________
Homeowner’s Insurance: Amount:________________ Cost:_____________
Renter’s Insurance: Amount: ___________________ Cost:_____________
Total Cost of Insurances: ____________________________________________
PART C – LIVING EXPENSES
1. Food and beverages: _________________
2. Clothing and care: _________________
3. Utilities: _________________
4. Personal/Health care: _________________
5. Transportation expenses: _________________
6. Recreation/Entertainment: _________________
7. Furnishings/Equipment: _________________
8. Household maintenance: _________________
9. Education: _________________
10. Gifts and contributions: _________________
11. Allowance: _________________
TOTAL LIVING EXPENSES: _________________
2. Estimate how many new items you buy in a month and their approximate cost.
List the amount here:______________________
Estimate the amount spent monthly on clothing care and list the amount here:________
Accessories may be another cost; list the total amount estimated here:__________
3. Check the item below that you would want on a regular basis and next to it list the monthly charge.
Telephone:____ Monthly charge: __________________Plus calls:________________
Cell phone:____ Monthly charge: __________________Plus calls:________________
Electricity:____ Monthly charge:___________________
Cable TV: ____ Monthly charge:___________________
Other: List:______________________________
5. List the form(s) of transportation you choose here:___________________________________________
What are the costs of operation? _____________________________________
What is the cost of repairs? _________________________________________
If you buy a car, what is the cost of excise tax? ________________________
What is the cost of registration? ____________________________________
What is the cost of inspection? _____________________________________
List the total cost of these items.
6. Roughly list and estimate the cost of your leisure and recreation activities here:_________________________________________________________________
PART D – MONEY SET ASIDE
1. Emergency fund: _________________
2. Seasonal expenses (Christmas Club): _________________
3. Savings: _________________
TOTAL MONEY SET ASIDE: _________________
MONTHLY SUMMARY:
TOTAL INCOME: _________________
TOTAL EXPENSES: _________________
TOTAL EXTRA MONEY: _________________
Balanced? _________Yes __________No
SUMMARY. Your budget will be complete after all of these factors have been considered and amounts established. Total your income and expenses. These should be balanced or with a little extra in the income area. If not, some plan will have to be decided upon to make the difference or to cut back on some area of the budget.
Then, summarize what you have learned from this budget assignment about:
1. Scarcity and Opportunity Cost – this is the idea that anytime we have to decide between one thing or another, there is an opportunity cost to our decision. For instance, if you have $15, and you need to decide if you should spend it on going to the movies with your friend or buying toilet paper and kleenex for the bathroom, there would be opportunity costs for either choice. If you buy the toilet paper and kleenex, the cost to you is that you missed out on time with your friends. If you choose to go the movie and go without toilet paper and tissue, then the cost to you is a rather uncomfortable bathroom situation. What did you learn about opportunity costs and scarcity through this budget project? What choices did you have to make? What did you have to give up?
2. Marginal Cost and Marginal Benefit – this is the idea that there is a cost to producing one more of anything, but there is also a benefit to producing more of something. Think of the choices you made in your budget. Did you ever choose MORE of something, even though it cost you more? If so, what were the benefits of choosing more?
3. If you chose to pay for insurance and investments, why did you choose them? If you did not, what risks are you putting yourself into by not having insurance and investments?
4. What did you learn about yourself and your economic choices through this assignment?
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