Budget Simulation Project

Budget Simulation Project

This exercise is about budgeting.   Submit this assignment on Blackboard.

Don't use plagiarized sources. Get Your Custom Essay on
Budget Simulation Project
Get a plagiarism free paperJust from $13/Page
Order Essay

 

Assignment:

1) Create a budget worksheet with all the line items mentioned below for each month. Using the table at the end of this document.  Your income is fixed.   So you will need to make choices on your spending.   Remember to take yearly amounts and divide them by 12 in order to get monthly figures.   Your goal for this exercise: avoid a negative balance for the month and have something allocated to savings.

 

Scenario: You graduated from college in June.  It is six months later and you’ve traveled, visited friends, blown through your summer income, moved back in with your parents/guardians and you and your family are getting on each other’s nerves.  Now it is time for the “real world.”   Good news:  You’ve got your own place.  It’s in Chicago and your address is 800 Halstead Street Chicago, IL 60607.  You love it – it has history and you love the Cubbies.  Bad News:  You’ve got to work to pay for your expenses.  You are on your own.  Below are all the budget categories and choices you need to account for over the next twelve months.  You must stay in the budget.  No assuming wealthy relatives or lottery winnings.

 

Job:  You graduated with a liberal arts degree and are earning the liberal arts graduate average income at a firm income at a firm of your choice (yes, now you wish you majored in Economics).  Your yearly salary is $43,100 before taxes.   You must subtract taxes (use the brackets in the text to consider the impact of the progressive tax system) to find out your take home pay. Use this calculator to get your take home pay.  https://www.calculator.net/take-home-pay-calculator.html   When using the calculator input Monthly for Pay Frequency, Filing Status is Single, Number of Federal Allowances is 1, Total Pre Tax Monthly Deductions should be $125, and State Tax Rate is 3.75%.   This is ALL of your income.  Paste a screenshot of your results below.

 

Debt:

  1. A) College debt – you have $29,800 in school loan debt. It is payable over 10 years at an interest rate of 6% interest. Determine the monthly payment. Try the Sallie Mae calculator:

https://www.bankrate.com/calculators/college-planning/loan-calculator.aspx

Paste a screenshot of your results below.

 

  1. B) Credit Card Debt – You have the average American College student’s credit card debt of $3,200.00 payable at an interest rate of 19.9%. Determine how you will pay this off, preferably this year. Try the following calculator:

https://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx

Paste a screenshot of your results below.

Housing:  You have signed a lease on a one bedroom apartment for $800/month for one year.  It has a coin laundry ($.75 for wash and $.50 for dryer) in the basement. You must do at least one load of laundry each week.  Utilities are included gas, heat, and water.  Parking is free.  You live next to a bus stop.  How much laundry will you do and why?

 

Transportation:  Your place of work is five miles away.  You cannot walk everyday in a suit.  The bus fare is $2.50 each way.   If you decide to drive to work, you have to pay for parking.  How much will you budget for transportation and why?

 

Car: You need to budget for your car expenses. A) Car Payments – Your car payment is $300 per month.  B) Car Insurance is $200 per month.  C) Gas – you need to budget money for gas.  How much will you budget for gas and why?

 

Food:  A) Groceries – weekly groceries cost between $50.00 and $75.00.  Determine your monthly amount (select a figure and multiply by four).  B) Eating Out – Pizza is about $18.00.  Dinner at McDonald’s is about $10.00.  Dinner in a restaurant is between $18.00 and $50.00 before tip of 15% and 9.75% tax.  Decide if you want to eat out and how often.  How much will you budget for food and why?

 

Telephone:  You need a cell phone.  Go on the internet and shop for a plan.  Provide all the supporting documents concerning the minutes, taxes and cost per month.  Paste a screenshot of your results below.

 

Clothes:  You need work clothes.  Your parents were so proud when you moved out they purchased a coat, suit, shoes and a few accessories for you.  But you could use a few more items to get through the year.  Provide support from the internet of additional items you purchased.  Paste a screenshot of your results below.

Health Care:  You have dental, medical and eye coverage through work.  You need to get an annual physical and pay the co-pay of $20.  Assume you are healthy and do not need much more.

 

Personal Care:  You need shampoo, haircuts, and facial products.  Enter how much into the budget?

 

Entertainment:  This is the town with Wrigley Field.  You might want to catch a game.  Go to their website and get some tickets during the regular season.  Or maybe you might want cable?  Concerts?  Movies?  Video Games?   What entertainment will be in your budget and why?

 

Savings:  You must put aside at least 5% of your income in case of an emergency.  You are creating an emergency fund.  Can you do it?  How much can you save?

 

Retirement:  Also, you have to put aside at least $125 per month for retirement.  We already included this in your take home pay calculator.  After a year how much will you have saved for retirement?

 

Other:  Do you want to contribute to a charity?  Gifts for holidays or birthdays?  Travel home to NY?   What items will you be including in your budget?

 

Monthly budget

Income per Month
Total Income
Expenses
–          College Debt
–          Credit Card Payment
–          Rent
–          Laundry
–          Bus Fare
–          Car Payment
–          Car Insurance
–          Gas
–          Groceries
–          Eating Out
–          Cell Phone Bill
–          Clothing
–          Health Care
–          Personal Care
–          Entertainment
–          Savings
–          Other
–          Other
–          Other
Total Expenses
 
Surplus or Deficit Each Month

(Subtract Total Expenses from Total Income)

 

 

Summary Questions

Answer the following questions under each bullet point.  Do not use an essay format. Make sure you proofread for grammar and word usage mistakes.

 

  1. A) What expenses can you not change?

 

 

  1. B) Where could you reduce spending?

 

  1. C) What would you have earned if you were an economics major instead of a liberal arts major? Cite the website where you found the answer.   Paste a screenshot of your results below.

 

 

 

  1. D) If you did earn the economics major salary what impact would it have had on your budget?

 

 

  1. E) What would you earn in the career you would like to pursue? How would that impact your budget?

 

  1. D) Go to bankrate.com and investigate how many months you would be paying off the debt if you had only made the minimum payments on the credit card debt? The minimum payment would be about $96 per month. Paste a screenshot of your results below.    (https://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx)

 

 

  1. E) You spent $3,200 on your credit card. If you only pay the minimum payment of $96, what is the total amount (Interest and Principal) you end up paying to the credit card company? The answer is in the calculator used in the previous question. Paste a screenshot of your results below.
Total Principal
+ Tot Interest
Total Amount Paid

 

 

 

  1. F) What have you learned from this exercise?

 

Homework Valley
Calculate your paper price
Pages (550 words)
Approximate price: -

Our Advantages

Plagiarism Free Papers

All our papers are original and written from scratch. We will email you a plagiarism report alongside your completed paper once done.

Free Revisions

All papers are submitted ahead of time. We do this to allow you time to point out any area you would need revision on, and help you for free.

Title-page

A title page preceeds all your paper content. Here, you put all your personal information and this we give out for free.

Bibliography

Without a reference/bibliography page, any academic paper is incomplete and doesnt qualify for grading. We also offer this for free.

Originality & Security

At Homework Valley, we take confidentiality seriously and all your personal information is stored safely and do not share it with third parties for any reasons whatsoever. Our work is original and we send plagiarism reports alongside every paper.

24/7 Customer Support

Our agents are online 24/7. Feel free to contact us through email or talk to our live agents.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

We work around the clock to see best customer experience.

Pricing

Flexible Pricing

Our prices are pocket friendly and you can do partial payments. When that is not enough, we have a free enquiry service.

Communication

Admission help & Client-Writer Contact

When you need to elaborate something further to your writer, we provide that button.

Deadlines

Paper Submission

We take deadlines seriously and our papers are submitted ahead of time. We are happy to assist you in case of any adjustments needed.

Reviews

Customer Feedback

Your feedback, good or bad is of great concern to us and we take it very seriously. We are, therefore, constantly adjusting our policies to ensure best customer/writer experience.