PERSONAL BUDGET by chenmeixiu

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									             PERSONAL BUDGET – Moving Out On Your Own
Congratulations! Tonin Enterprises has just hired you for your first full-time job, at a starting
salary of $33,600/year. Therefore, you are now ready to get a place of your own. The fun is just
beginning! You will need to make some critical decisions regarding your living expenses.
These decisions will include choosing an apartment, furnishing your apartment, and purchasing
food, clothing, transportation and other goods and services.

This assignment consists of four parts (Part A, B, C and D). You will be handing in all four
parts.

PART A: Monthly Budget

The following monthly budget must be set up on a computer spreadsheet (Excel). Refer to the
instructions in Part B, C, and D when calculating the amount to be included for each budget line.
Whenever possible, use formulas and functions when creating your monthly budget.

                                     MONTHLY BUDGET

MONTHLY GROSS INCOME                                                              ____________

Monthly Expenses:
Cable                                               ____________
Clothes                                             ____________
Entertainment                                       ____________
Food (from Part C)                                  ____________
Insurance                                           ____________
Internet                                            ____________
Loan Repayment for Furnishings (from Part D)        ____________
Other Expenses                                      ____________
Rent                                                ____________
Taxes                                               ____________
Telephone                                           ____________
Toiletries                                          ____________
Transportation                                      ____________

Total Expenses                                                                    ____________

Income minus Expenses (Savings)                                                   ____________




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PART B: Written Report

You are required to hand in a report along with your monthly budget that explains how you
calculated each number in your budget, and that answers any questions that are asked below.
The report should be created using a word processor. It is important that you clearly and
accurately present your work. Here is the information that you will need to help you prepare
your written report and your monthly budget:

Gross Income: Your annual gross income is $33,600; be sure to calculate a monthly amount.

Cable: Your choices for cable are as follows. Make your choice and include the required
amount of money in your monthly budget.

No Cable     $00.00                                   Basic          $40.00
Intermediate $50.00                                   Deluxe         $60.00

Clothes:       To calculate your monthly clothing budget:
               List all of the clothes that you wear in a year. Don’t forget about boots, coats, etc.
               Estimate how much each item would cost to buy. Add up the total. Divide the
               total by 12 to get the monthly clothing amount for your budget.

Entertainment:
Estimate your monthly entertainment expenses by itemizing and then totaling them.
Here is an example:
                        two movie passes                  $20.00
                        restaurant with friend            $20.00
                        dance club                        $12.00
                        weekly pickup hockey game         $50.00
                        Total:                          $102.00
(Note: The list above is an example only. Your monthly entertainment expenses should be
different than what is shown above.)

Food: Include the monthly amount calculated in Part C of this assignment.

Insurance:     Everyone must have apartment insurance to cover cost of fire and theft. Assume
               that this will cost approximately $200 per year. Calculate the monthly charges.

Internet: Your choices for Internet are as follows. Make your choice and include the required
amount on money in your monthly budget. Assume that you already have a computer.

No Internet $00.00            Dial-Up $20.00                   High-Speed $40.00

Loan Repayment for Furnishings: Include the monthly amount calculated in Part D of this
assignment.

Other Expenses:       In your written report, list 7 other expenses that you may incur that aren’t
                      included elsewhere in your budget. You do not need to find the price of
                      these items. Include $75.00 in your budget to cover the cost of possible
                      Other Expenses.
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Rent: Find an ad for a suitable apartment and paste the ad for the apartment in your written
      report. Be sure that the monthly charge for the apartment is clearly indicated. If the price
      for the apartment does not include utilities, add $50 to the cost of your rent to cover
      utilities.

Telephone: Chose from one of the following three options:
       If you only require a basic phone plan because you don’t use the phone that often and
         you rarely make long-distance calls, budget $25 per month for telephone.
       If you require an intermediate phone plan because you talk on the phone regularly and
         sometimes make long-distance calls, budget $50 per month for telephone.
       If you “live on the phone” and make lots of long-distance calls, budget $100 per
         month for telephone.

Taxes: Assume that 30% of your gross income will deducted from your pay to cover income
       taxes and other payroll deductions; include this amount in your monthly budget for taxes.
       In your written report, list the 3 deductions that an employer must make from the pay of a
       full-time employee, and list 2 other possible deductions that may occur.

Toiletries/Medication:
In your written report, list five items that could fit into this category of expense. You do not
need to find the price of each item. In your monthly budget, include $50.00 to cover the cost of
Toiletries and Medication.

Transportation:        Assume that you do not need a car for work. You can walk, bike, or take
                       the bus. However, you may want a car for convenience and pleasure.

Monthly Cost of Buying/Leasing a New Car:            _______________ (calculated in class)

Monthly Cost of Buying a Used Car for $10,000:       _______________ (calculated in class)

You can chose to have a new car or a used car, with a monthly cost as per our class discussion.
If you choose not to have a car, then you must budget $100 per month to cover the cost of a bus
pass, cab rides, etc. In your written report, be sure to explain the reason for the transportation
choice that you made.

Total Expenses: Use an Excel function to add up all of your expenses.

Income minus Expenses (Savings): Use an Excel formula to calculate this number. This
number cannot be a negative number. If it is, then you must reduce some of your expenses. Any
positive number is savings that can be used in the future.




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PART C: Weekly Menu, Grocery List and Monthly Food Expense

Create a sample menu for the week. Present your menu in chart format. Here is an example,
with one day filled in:

            Mon.           Tues.           Wed.        Thurs.      Fri.         Sat.            Sun.
Breakfast   Special K
             cereal
            milk
            apple
Lunch       ham sandwich
            baby carrots
            diet coke
Supper      piece of
             chicken
            peas
            potatoes
            orange juice
Snacks      granola bar
            grapes
            bag of chips

Below your menu, include a grocery list that lists all of the items you will need to purchase in
order to satisfy your weekly menu. Beside each grocery list item, include its price. Show the
total amount of money needed to purchase your weekly amount of groceries. (Note that if you
plan to eat out at a restaurant, indicate that on your weekly menu, but include the amount of
money under your Entertainment expense.)

To calculate your monthly Food expense, multiply the weekly amount of money you need for
groceries by 4.5. This monthly amount for food should be included in your monthly budget (Part
A).




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PART D: Obtaining a Loan to Furnish Your Apartment

Assume that you must acquire appliances and furniture to furnish your apartment. You will
obtain a loan for the total amount of money needed to furnish your apartment. Below is a list of
items needed to furnish your apartment. For this assignment, assume that you do not already
own any of the items listed.

       Refrigerator (if your apartment does not include appliances)
       Stove (if your apartment does not include appliances)
       Television
       DVD player
       Stereo
       Microwave
       Bed
       Dresser
       Kitchen Table and Chairs
       Couch and Chair
       Dishes
       Cutlery
       Pots and Pans (your choice)
       Two sets of towels (you may add more)
       One set of sheets (you may add more)

How much of a loan do you require? You must find the price for each of the items listed above.
These items can be found in the classified section of the newspaper, in the penny saver, in flyers
from retail stores, or on the Internet. You must cut out or print out each advertisement and make
a scrapbook with the price of each item. Don’t forget to calculate the taxes for new items. Be
sure to clearly indicate the price of each item, and the total amount of money that you need to
purchase all of the items, which will be your Loan Amount.

       Loan Amount =                  ___________________

       Monthly Loan Repayment = ___________________
       (assume you will be receiving a bank loan from The Loyal Bank of Tonin at a rate of
       7%/year amortized over 2 years.)

Note: There are many ways that you can find out what your monthly payment would be on a
      loan. Here is a few web sites that make it pretty easy:
      http://www.openhouse.net/calculator.html             http://www.yona.com/loan/


Include the Monthly Loan Repayment amount in your monthly budget (Part A).




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