Personal Finance Budget Project
Students will prepare a personal budget that summarizes typical monthly expenses for a single
person, living alone and newly entering the job market. The project will take place over several weeks
and will involve work to be done both at school and at home. The following is a brief summary of the
steps involved in completing the project.
1. Research your chosen career and complete the attached Career Summary. Questions 2-4
should be answered by researching your chosen career in the Occupational Outlook
Handbook http://www.bls.gov/search/ooh.htm. Questions 5-7 should be answered by
researching colleges or training programs. Use attached Career Summary Instructions.
2. Look up starting salary. Use Missouri Area Wage Report
http://www.bls.gov/oes/current/oes_mo.htm. Click on six-digit code next to your career and
print the first page to get salary range and starting salary (25% percentile). Use the information
to fill in questions 9-10 of the Career Summary.
3. Complete the attached 1040EZ tax form to compute annual federal income tax.
4. Complete the attached Tax Worksheet that summarizes income, Social Security and
Medicare taxes. The worksheet also calculates gross monthly income and total monthly taxes.
5. Select an apartment that fits within your monthly budget. Be sure to check on utilities.
6. Get a quote online for renter’s insurance to cover the value of personal assets. Use
Allstate.com. Click here for instructions on insurance quotes.
7. Select an automobile and calculate a monthly payment to finance it for 1 to 5 years. Use
8. Get an estimate of monthly payment on student loans. Use FinAid Calculator
9. Get a quote online for automobile insurance on the car selected in #6. Use Allstate.com.
10. Estimate monthly car maintenance. Include gasoline, oil changes, etc.
11. Get an estimate of monthly utilities not included in rent (water, gas, electricity
12. Estimate monthly health insurance.
13. Select a phone.
14. Estimate monthly food expenses. Include restaurant expenses.
15. Estimate annual clothing expenses and divide by 12 to get monthly figure.
16. Select cable TV plan.
17. Estimate recreation expense.
18. Estimate miscellaneous/personal expense.
19. Estimate monthly savings. Subtract total monthly expenses from total monthly income.
20. Complete the attached Personal Budget Worksheet. Make sure that Total Monthly Expenses
are less than Net Monthly Income and that there is at least a 10% savings rate. Adjust
estimates if necessary to obtain a “balanced” budget.
21. Draw “unexpected event” from envelope. Adjust budget to accommodate change in
22. Complete the attached Budget Think Sheet.
23. Complete the attached Compounding Interest Worksheet.
Assembly of Project: Place rubric on top of project. The Career Summary with documentation is
next, followed by the Tax Worksheet/1040EZ. The Personal Budget Worksheet and the Budget Think
Sheet is next. The Compounding Interest Worksheet is next. The remaining pages of the project are
documentation that explain where the numbers came from for the budget. These pages should follow
the order of the Personal Budget Worksheet. Place in the upper right corner of each page of
documentation the letter that corresponds to the Personal Budget line item. For example, the
advertisement that lists the apartment rent (and whether utilities are included) should have the letter
“A” in the upper right hand corner of the page. Make sure to highlight the appropriate information on
the advertisement (rent, statement about utilities, etc.). Documentation must be provided for each
line item included in the budget. Hand-written documentation is accepted for some items like food and
car maintenance estimates, but is generally discouraged. A better grade is earned for documentation
that reflects the student’s effort to research and obtain objective estimates of expenses. The total
project is worth 100 points. LATE PROJECTS WILL NOT BE ACCEPTED. PROJECTS MUST BE
TURNED AT OR BEFORE THE ASSIGNED DUE DATE.
ADDITIONAL RESOURCE LINKS
Rubric for Personal Finance Budget Project – 100 Points
1. Correct completion of Career Summary
with appropriate documentation .......................................................... 10
2. Correct completion of Tax Worksheet/1040EZ ................................... 10
3. Correct completion of Original Monthly Budget .................................. 10
4. Complete documentation for each line item on the
original budget .................................................................................... 20
5. Correct completion of After Event Monthly Budget ............................. 10
6. Correct completion of Budget Think Sheet ......................................... 10
7. Completion of Original and After Event budgets with at
least 10% savings of net monthly income. .......................................... 10
8. Completion Compounding Interest Worksheet and Questions
based on After Event Net Monthly Savings. ....................................... 20
Career Summary Instructions
The career summary must have documentation to support your answers for all questions (except #7).
You should highlight the portion of your printout that supports your answer on the career summary
and then label in the left column which number the information supports. For example, if you find out
that your chosen career requires a Bachelor of Science degree, highlight this information and put #4
in the left margin. Use this information to answer question #4 on the Career Summary.
1. Go to Occupational Outlook Handbook
a. Cut and paste into a word processing document information about your career. Please
i. Nature of the work
iii. Job Outlook
b. Print a 2-3 page document with this information. Adjust font to minimize paper usage
c. Use this information to answer questions # 1-4.
d. Be sure to indicate which information you used to answer which question.
e. Highlight the information and then put the appropriate information in the left margin.
2. Go to a college (or training center) website.
a. Get cost for tuition, fees, and books for one year
b. Multiply by the number of years you need
c. Do undergraduate separate from graduate school.
d. Show all your calculations.
e. Use this information to answer questions # 5-8.
f. If you plan on getting student loans, estimate the total amount of loans in # 7. No
evidence of scholarships or loans is required.
3. Go to Missouri Area Wage Report
a. Find your career.
b. Click on 6-digit code in left column
c. File print FROM PAGE 1 to PAGE 1
d. Use this information to answer questions # 9 & 10.
e. Salary range is from 10% to 90%.
f. Starting salary is the 25% number. Round all numbers to the nearest $1000.
2. Reasons for choosing this career:
3. Personal qualities that enhance career choice:
4. Training/Education Required:
5. Expected Location of Training/Education:
6. Cost of Training/Education:
7. Plan for paying Training/Education expenses:
8. Age when Training/Education complete
8. Salary range for chosen career:
9. Starting salary for chosen career:
Department of the Treasury—Internal Revenue Service
Form Income Tax Return for Single and
1040EZ Joint Filers With No Dependents (99) 2009 OMB No. 1545-0074
Your first name and initial Last name Your social security number
(See page 9.) A If a joint return, spouse’s first name and initial Last name Spouse’s social security number
Use the E
IRS label. L Home address (number and street). If you have a P.O. box, see page 9. Apt. no. You must enter
Otherwise, H your SSN(s) above.
please print E
or type. City, town or post office, state, and ZIP code. If you have a foreign address, see page 9.
E Checking a box below will not
Presidential change your tax or refund.
(see page 9) Check here if you, or your spouse if a joint return, want $3 to go to this fund . . You Spouse
Income 1 Wages, salaries, and tips. This should be shown in box 1 of your Form(s) W-2.
Attach your Form(s) W-2. 1
here. 2 Taxable interest. If the total is over $1,500, you cannot use Form 1040EZ. 2
Enclose, but do 3 Unemployment compensation in excess of $2,400 per recipient and Alaska Permanent
not Fund dividends (see page 11). 3
4 Add lines 1, 2, and 3. This is your adjusted gross income. 4
You may benefit 5 If someone can claim you (or your spouse if a joint return) as a dependent, check
from filing Form
1040A or 1040.
the applicable box(es) below and enter the amount from the worksheet on back.
See Before You You Spouse
Begin on page 4. If no one can claim you (or your spouse if a joint return), enter $9,350 if single;
$18,700 if married filing jointly. See back for explanation. 5
6 Subtract line 5 from line 4. If line 5 is larger than line 4, enter -0-.
This is your taxable income. 6
7 Federal income tax withheld from Form(s) W-2 and 1099. 7
Payments, 8 Making work pay credit (see worksheet on back). 8
Credits, 9a Earned income credit (EIC) (see page 13). 9a
and Tax b Nontaxable combat pay election. 9b
10 Add lines 7, 8, and 9a. These are your total payments and credits. 10
11 Tax. Use the amount on line 6 above to find your tax in the tax table on pages 27
through 35 of the instructions. Then, enter the tax from the table on this line. 11
Refund 12a If line 10 is larger than line 11, subtract line 11 from line 10. This is your refund.
If Form 8888 is attached, check here 12a
Have it directly
page 18 and fill in b Routing number c Type: Checking Savings
and 12d or
Form 8888. d Account number
Amount 13 If line 11 is larger than line 10, subtract line 10 from line 11. This is
you owe the amount you owe. For details on how to pay, see page 19. 13
Do you want to allow another person to discuss this return with the IRS (see page 20)? Yes. Complete the following. No
designee Designee’s Phone Personal identification
name no. number (PIN)
Sign Under penalties of perjury, I declare that I have examined this return, and to the best of my knowledge and belief, it is true, correct, and
accurately lists all amounts and sources of income I received during the tax year. Declaration of preparer (other than the taxpayer) is based
here on all information of which the preparer has any knowledge.
Your signature Date Your occupation Daytime phone number
Joint return? See
Keep a copy for Spouse’s signature. If a joint return, both must sign. Date Spouse’s occupation
Date Preparer’s SSN or PTIN
preparer’s Firm’s name (or EIN
use only yours if self-employed),
address, and ZIP code Phone no.
For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see page 36. Cat. No. 11329W Form 1040EZ (2009)
Form 1040EZ (2009) Page 2
Worksheet for Use this worksheet to figure the amount to enter on line 5 if someone can claim you (or your spouse if married
filing jointly) as a dependent, even if that person chooses not to do so. To find out if someone can claim you as a
Line 5 — dependent, see Pub. 501.
who checked A. Amount, if any, from line 1 on front . . . . . .
one or both + 300.00 Enter total A.
boxes B. Minimum standard deduction . . . . . . . . . . . . . . . . . . . . . B . 950.00
C. Enter the larger of line A or line B here . . . . . . . . . . . . . . . . . . C.
D. Maximum standard deduction. If single, enter $5,700; if married filing jointly, enter $11,400 . D.
E. Enter the smaller of line C or line D here. This is your standard deduction . . . . . . . . E.
F. Exemption amount.
● If single, enter -0-.
● If married filing jointly and — F.
—both you and your spouse can be claimed as dependents, enter -0-.
—only one of you can be claimed as a dependent, enter $3,650.
G. Add lines E and F. Enter the total here and on line 5 on the front . . . . . . . . . . G.
(keep a copy for If you did not check any boxes on line 5, enter on line 5 the amount shown below that applies to you.
your records) ● Single, enter $9,350. This is the total of your standard deduction ($5,700) and your exemption ($3,650).
● Married filing jointly, enter $18,700. This is the total of your standard deduction ($11,400), your exemption ($3,650), and
your spouse's exemption ($3,650).
Worksheet Before you begin: √ If you can be claimed as a dependent on someone else's return, you do not qualify for this credit.
for Line 8 — √ If married filing jointly, include your spouse's amounts with yours when completing this worksheet.
pay credit 1a. Important. See the instructions on page 12 if (a) you received a taxable scholarship or fellowship grant not reported on
a Form W-2, (b) your wages include pay for work performed while an inmate in a penal institution, or (c) you received
a pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan.
Do you (and your spouse if filing jointly) have 2009 wages of more than $6,451 ($12,903 if married filing jointly)?
Yes. Skip lines 1a through 3. Enter $400 ($800 if married filing jointly) on line 4 and go to line 5.
No. Enter your earned income (see instructions) . . . . . 1a.
b. Nontaxable combat pay included on line la (see
Use this instructions) . . . . . . . . . . . 1b.
worksheet to 2. Multiply line 1a by 6.2% (.062) . . . . . . . . . . . . 2.
figure the amount
3. Enter $400 ($800 if married filing jointly) . . . . . . . . . 3.
to enter on line 8
if you cannot be 4. Enter the smaller of line 2 or line 3 (unless you checked "Yes" on line 1a) . . . . . . 4.
claimed as a 5. Enter amount from Form 1040EZ, line 4 (on front) . . . . . . 5.
dependent on 6. Enter $75,000 ($150,000 if married filing jointly) . . . . . . 6.
another person's 7. Is the amount on line 5 more than the amount on line 6?
return. No. Skip line 8. Enter the amount from line 4 on line 9 below.
Yes. Subtract line 6 from line 5 . . . . . . . . . . . 7.
8. Multiply line 7 by 2% (.02) . . . . . . . . . . . . . . . . . . . . 8.
9. Subtract line 8 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . 9.
10. Did you (or your spouse, if filing jointly) receive an economic recovery payment in 2009? You
may have received this payment if you received social security benefits, supplemental security
income, railroad retirement benefits, or veterans disability compensation or pension benefits
(keep a copy for
your records) No. Enter -0- on line 10.
Yes. Enter the total of the economic recovery payments received by you (and your spouse,
if filing jointly). Do not enter more than $250 ($500 if married filing jointly) . . 10.
11. Making work pay credit. Subtract line 10 from line 9. If zero or less, enter -0-. Enter the result
here and on Form 1040EZ, line 8. . . . . . . . . . . . . . . . . . . 11.
Mailing Mail your return by April 15, 2010. Use the envelope that came with your booklet. If you do not have that envelope or if you
return moved during the year, see the back cover for the address to use.
Form 1040EZ (2009)
Starting Annual Salary (from Career Summary) $ ___________
(Round off all numbers to whole dollars.)
Annual Social Security Tax (multiply by 0.062) $ ___________
(Maximum SST amount is $6622)
Annual Medicare Tax (multiply by 0.0145) $ ___________
(Stop here and fill out 1040 EZ on opposite side.)
Annual Income Tax (from 1040 EZ, line 10) $ ___________
Total Annual Federal Taxes (SST+MT+IT) $ ___________
Total Tax Rate (Total Taxes / Annual Income x 100) __________%
Monthly Income (Annual Salary divided by 12) $ ___________
Total Monthly Taxes (Total Annual Taxes divided by 12) $ ___________
Disposable Monthly Income (Mo. Inc. – Mo. Taxes) $ ___________
Budget Project Insurance Instructions
Go to cars.com
1. 2. On the right side under Research, click on Auto Loan Calculators.
2. Enter price of car and a 10% down payment (take off last digit of price).
3. Enter nothing for trade in value.
4. Enter 7 for sales tax rate if purchased in Tennessee.
5. Enter either the new (6.96%) or used car (7.36%) interest rate.
6. Enter term of financing (48 months for new, 36 months for used, maximum).
7. Click Payment Summary and then File Print to print out monthly car payment.
Go to allstate.com
1. Under Get a Quote, enter the zip code of your apartment, select Auto, then Start a New Quote, Click
2. Click Get a Ballpark Estimate. Add a driver and enter age and gender. Make sure to pick the
3. age you will be when you finish your education.
4. If you plan on going to college, select no accidents on this page. If you are going right to work,
5. enter actual information.
6. Select Add a Vehicle and enter Year, Make and Model of your selected car. Click next.
7. Select Rent, Very Good. Length of Insurance is the age from above minus 16.
8. Once you get your quote, review coverage limits. Select the plan that provides you the most
9. coverage that you can afford.
10. Click View Printable Summary. Roll mouse over the question marks to get explanations of the
11. coverage. Print quote.
12. This is a SIX MONTH quote. Divide total by six to get monthly amount. Round to nearest dollar.
1. Go to allstate.com
1. Under Get a Quote, enter the zip code of your apartment, select Renter’s, then Start a New
2. Quote. Click Start.
4. Click Quick Renters Quote.
5. Click the Rooms button to get questions about number of rooms and contents.
6. Enter the number of rooms, and standard property, unless you think you possessions are
inexpensive (economy) or expensive (luxury).
7. Click Get Your Quick Quote Now.
8. Review your quote for coverage limits. Make adjustments as necessary.
9. Click on Print Version. Select File Print.
8. This is a TWELVE MONTH QUOTE. Divide by 12 to get your monthly amount. Round to the
Estimating auto insurance rates
Using the vehicle information you selected, obtain an insurance quote from
American Family Insurance1 at http://www.amfam.com/quote/quote.asp
Input the following information when prompted:
· Zip code 65270
· 1 driver, 1 vehicle
· Garage zip 65270
· Commonly chosen coverage
· No damage, not a replica, not used for business
· Average annual mileage = 12,000
· Garage address: 6477 Center Street, Moberly
· Age = 22
· Years driving = 6
· Currently have insurance for longer than 6 months
· First name – choose something that represents your gender
· No tickets or violations
· Car will be used to drive to work 8-15 miles
· What is your insurance quote: ______________ for _____ months
*I am not endorsing American Family insurance. This website was selected
because they do not require personal information to obtain a quote
Estimating annual fuel costs
1. Go to www.fueleconomy.gov
2. Click on Find & Compare Car
3. Click on Find a Car
4. Click on your Year, Make and Model
5. You may need to select a model – try and select the model closest to
the model you own
6. Click on Use your gas prices and annual miles
7. Select 12,000 miles per year
8. 60 % city
9. Regular gas = current gas prices
10. Annual Fuel Costs: ____________________________
Personal Budget Worksheet
Name: ________________________ Career: __________________________
Description Original After Event
Monthly Income $ ____________ $ ____________
Total Monthly Taxes - $ ____________ $ ____________
Net Monthly Income = $ ____________ $ ____________
Retirement Savings (min. 5%) $ ____________ $ ____________
A. Health Insurance $ ____________ $ ____________
B. Apartment Rent $ ____________ $ ____________
C. Renter’s Insurance $ ____________ $ ____________
D. Automobile Payment $ ____________ $ ____________
E. Auto Insurance $ ____________ $ ____________
F. Auto Maintenance $ ____________ $ ____________
G. Student Loan Payment $ ____________ $ ____________
H. Utilities $ ____________ $ ____________
I. Telephone $ ____________ $ ____________ (opt)
J. Television/Internet $ ____________ $ ____________
K. Food $ ____________ $ ____________
L. Clothing $ ____________ $ ____________
M. Misc./Personal $ ____________ $ ____________
N. Recreation $ ____________ $ ____________
O. Charitable Contributions $ ____________ $ ____________ (opt)
Total Monthly Expenses $ ____________ $ ____________
Net Savings (min. 10%) $ ____________ $ ____________
Budget Think Sheet
1. Unexpected Event stapled to sheet
2. What changes needed to be made to your budget to adjust for event? (be specific)
3. What expenses in your original budget can be considered “fixed costs”?
4. What expenses in your original budget can be considered “variable costs”?
5. How did personal preferences enter into your budget decisions? Be specific.
Compounding Interest Worksheet
• Use Net Monthly Savings “After Event.” Enter amount here: _______________________.
• Multiply this amount by 12 and enter the result on each line of the column labeled Annual
• You are saving this amount EACH YEAR for 20 years and investing it in some type of bank or
investment account. You will earn interest on all money saved AND all interest earned in
previous years. This is called Compounding Interest.
• For each interest rate on the first line, multiple the amount of annual savings by the factor
• For each consecutive year, add the Annual Savings Estimate to the result on the previous line
AND multiply by the factor indicated.
• Complete the chart for each interest rate indicated. Answer the questions on the reverse side.
Year Annual Savings Interest Rate Interest Rate Interest Rate Interest Rate :
Estimate 4% 6% 8% 10%
Factor: 1.04 Factor: 1.06 Factor: 1.08 Factor: 1.10
Questions about Compounding Interest
1. What conclusion can you make about investing money long term?
2. What conclusion can you make about the importance of interest rates in savings?
3. How is the principle of compounding interest important in a financial savings plan?
4. What would happen to your results if you compounded more often than annually?
5. Speculate what type of investments are particularly sensitive to both interest rates and the
length of investment.
6. How do you plan to use compounding interest in your personal financial plan?