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Student Activity



Scenario


You have just received your high school diploma and are about to enter the real world. You and your partner(s) will have a minimum wage job. Your assignment is to create a realistic budget. An even bigger challenge is to live within that budget. If your expenses exceed your income, you will need to determine where to cut back your monthly expenses in order to "make ends meet." You will also encounter unexpected monthly expenses which will force you to adjust your monthly budget. Finally, you will write a report using Microsoft Word & create a Powerpoint, evaluating the activity.

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Task


A budget starts with knowing how much money you bring in each month. This is called your income. Expenses are the opposite of income. Money is spent on the things you need or want. Your expenses need to be less than your monthly income. If not you will need to change your spending habits. Also, if your savings is not at least 10% of your income, you will need to adjust your spending habits.

STEP 1 Open & Save Budget to Your F Drive

SOFTWARE: Microsoft Excel



STEP 2 Estimate Expenses

SOFTWARE: Internet Explorer, Microsoft Excel


WHAT TO DO: Consult the internet to get an idea of how much it costs to rent a house or an apartment in an area you would like to live. Type in the monthly rent (C10) and create a hyperlink in your spreadsheet (E10) to document your source.

Research three different vehicles (new or used) that you would consider owning using the Auto Loan Calculator. (Our zip code is 35023.) One of the options must be under $15,000. Configure your loan for 5 years (60 months) at 7.28% APR (interest). Anyone that owns a car must add an additional $125 per month to account for auto insurance, repairs, license, registration, taxes, gas and oil changes. After you research car buying, if you decide not to buy a car, you may pay $100 per month for use of public transportation.


Step 2 Part 1 Housing (www.apartmentfinder.com) (You will need to type out a memo to me informing me of your housing decision.)


Step 2 Part 2 Transportation (see above)


Step 2 Part 3 Health Insurance (www.ibcbsal.com) Type in your D.O.B and zip code. Choose just for me. You and your partner(s) need to choose either the 1500 plan deductible, 1000 plan deductible, 750 plan deductible, or the 500 plan deductible. Whatever plan you choose you will need to multiply the monthly cost of the plan times how many people you have in your group. For instance if you choose the 1500 plan deductible and you have 2 people in your group you will need to multiply $96.00 X 2 to get the cost of your health insurance. Remember, the deductible is the amount you have to pay out-of-pocket for expenses before the insurance company will begin to cover all or a portion of the remaining costs.


Step 2 Part 4 Phone, Cable, Clothing, Entertainment, Misc., Pet & Pet Supplies (www.att.com www.charter.com, etc. )


DON'T FORGET TO CONSIDER CHARITABLE GIVING (This includes places such as your church, non-profit organizations and education foundations. It does not include gifts for birthdays, Christmas, or other similar occasions.) (C8)


TITHING OF GROSS INCOME FOR A GROUP OF 2 IS $232.00.

TITHING OF GROSS INCOME FOR A GROUP OF 3 IS $348.00


STEP 3 Create a Food Budget


SOFTWARE: Microsoft Excel, Microsoft Word

WHAT TO DO: To determine your monthly food budget, open a Word document and choose Insert Table from the Table menu. Design a Weekly Menu table similar to the one in below.


weekly-menu-planner_Full.jpg


Use this table to write down what you plan to eat and drink at each meal for one week. Be sure to include snacks. Now, figure out what you must buy at the grocery store to produce this menu. Complete your grocery list . Go to www.netgrocer.com and shop for the items you need for your weekly menu based on your grocery list . Click on buy to add these items to your shopping cart. When you are finished shopping you can print out the items in your shopping cart. Multiply by 4.5 the cost of the items in your shopping cart to get an estimate of your monthly food budget. Type this number into the food category (C14) of your monthly budget. Make sure you include restaurants and even that cup of coffee you bought this morning if you plan on eating out.

Step 3 Part 1: Create Weekly Menu

Step 3 Part 2: Complete Grocery List

Step 3 Part 3: Go to www.netgrocer.comand shop for the items on your grocery list. Add the items on your grocery list to your shopping cart. Make sure you the correct quantity. When you have finished shopping for your weekly menu get me to check your work. If you have completed this correctly you will then have my approval to print out your shopping cart. Then you will multiply the amount in your shopping cart by 4.5. This amount will go in C14 and represent your estimated monthly food budget.



STEP 4 Evaluate Your Budget


SOFTWARE: Microsoft Excel

WHAT TO DO: Once you have typed in all of your monthly expenses, your worksheet will show you whether or not you are "making ends meet." Do your expenses exceed your income? If so, you must decide where to cut back so that your expenses do not exceed your income. Now select one of the unexpected financial problems listed below. Click cell A8 and type Charitable Giving + Unexpected Expenses. Choose one of the unexpected financial problems below and add this amount to the amount you already have in C8.

(UFP 1) You forget to pay our phone bill and your phone service is shut off.
To turn it back on, the phone company wants $200.

(UFP 2) The lease on your apartment is up for renewal and the landlord
wants a 50% increase. How much will your increase be? How will
you adjust your budget to account for this increase?

(UFP 3) Your dog gets sick and the medicine costs $150.


(UFP 4) Your car gets a flat tire and it costs $175 to have it repaired.

(UFP 5) You get a speeding ticket for $200.00.

(UFP 6) Two of your relatives have to move in with you because they were laid-off from their jobs. This causes your food budget to increase by $130.00


Using Word, explain how you would adjust your budget to account for this unexpected expense. Explain your rationale. Then adjust your budget in your Microsoft Excel worksheet to account for this additional monthly expense. Also, explain in Word how your budget meets the Davey Ramsey guidelines below. Save the document as Evaluation of Budget on your F drive.


Category
Dave Ramsey
Charitable Giving
10-15%
Housing
25-35%
Utilities
5-10%
Food
5-15%
Transportation
10-15%
Medical
5-10%
Clothing
2-7%
Invest/Savings
5-10%
Debt Payments
5-10%
Misc. (Personal,Recreation,Life Ins.)
5-10%



STEP 5 Written Report/PowerPoint Presentation

SOFTWARE: Microsoft Word/Microsoft PowerPoint

WHAT TO DO: You will write a personal business letter and create a PowerPoint Presentation (Personal Business Letter should have 3 paragraphs with a minimum of 4 sentences per paragraph, personal business letter should be one page.) about the three biggest lessons that you learned from this project. Follow the format guide listed on pages 82 and 83 of your Computer Applications book. PowerPoint Presentation should follow the guidelines below. Please take this seriously and really reflect on what you have found out about income and managing money. You and your partner(s) will present this orally to the class.



PowerPoint Presentaion:

Slide 1: Title Slide (Making Ends Meet Project & the names of team members)
Slide 2:
Step 2 Part 1 Housing
Slide 3: Step 2 Part 2 Transportation
Slide 4: Step 2 Part 3 Health Insurance
Slide 5: Step 2 Part 4 Phone, Cable, Clothing, Entertainment, Misc., Pet & Pet Supplies
Slide 6: CHARITABLE GIVING
Slide 7: STEP 3 Create a Food Budget
Slide 8: STEP 4 Evaluate Your Budget
Slide 9:
The three biggest lessons that you learned from this project

To print out all the slides on one page click on print, then look for for the print what: dialog box in the bottom left hand corner, change from slides to handouts, look to right of this and you should see the handouts dialig box, change slides per page from 6 to 9. Click OK.


Create pie chart.

1. Highlight cells A29-B41
2. Click on the chart wizard button
(Click on example below)
3. Click on the pie chart button
4. Click Next
5. For the chart title name it Give, Spend, & Save
6. Click on the Legend tab-select bottom placement
7. Click Next
8. Click Finish
9. Place the chart to the right of B28
10. Copy this chart and place it in your personal business letter and essay.