Budget Simulation Project
This exercise is about budgeting. Submit this assignment on Blackboard.
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:
https://www.bankrate.com/calculators/college-planning/loan-calculator.aspx
Paste a screenshot of your results below.
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.
Total Principal | |
+ Tot Interest | |
Total Amount Paid |
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