Budget Assignment
Budgeting Assignment – Due Tuesday, October 29th
Either using your own personal expenses, or the information provided below, create a monthly budget that could serve as a template for you now or in the future. Be sure to justify your spending for the top three categories of housing, transportation, and food to ensure they are realistic. Using the separate form, estimate non-monthly expenses for a year and determine what amount would be needed in a set aside account to cover these expenses. Explain how you would fund this account for these expenses (treat as a monthly bill, 5th paycheck months, tax refund, etc.).
If you don’t want to use your actual expenses pretend that you have just graduated and have started a new job earning $40,000 per year (gross pay, before taxes). Assume that 20% will be withheld from your paycheck for payroll and federal income taxes. Health insurance is available for $500 per month. A retirement 401(k) plan is available, and the company will match your contributions dollar for dollar up to the first 6% of your pay. Create a monthly budget using this information. You get to determine where you want to live (let’s keep it in the US), and assume that you will be the sole provider no roommate or working spouse to share the expenses. No parental support to pay any of the bills either. Further assume you don’t have enough money saved to buy a house, so you need to find an apartment to rent. Decide what your transportation and food expenses would be and be sure to justify the amount so we both know it is realistic. Fill out the rest of the monthly budget sheet estimating your expenses, add or delete categories as needed.
Write a two-page paper about your experiences with budgeting. Use some of the questions below as possible prompts to help you when writing the paper.
Review the mint.com website and application. Do you think this program would be helpful in tracking your spending and setting a budget? What additional risks if any do you think would be associated to having a third-party program download your transactions? How was money handled when you were growing up? Did one person do all the money management work or was it a shared responsibility? Was money talked about openly, or was it something rarely discussed, or only in private? How will money be handled in your household when you are in a committed relationship? Do you believe that you spend more when paying with plastic than with cash? How will you control discretionary spending like money spent on entertainment, eating out, grocery store, shopping, etc.? Which would you be willing to spend an hour of your time doing: shopping for a new cell phone plan that would save $10 per month, or shopping around to save $100 on a one-time purchase like textbooks, iPhone, tires for your car, etc.? What are some steps you would take if your monthly expenses/spending was greater than your monthly income? Do you plan on saving what is leftover at the end of the month when all the bills are paid or set money aside for savings at the beginning of the month as soon as your are paid? How is a set aside account different from an emergency fund? Do you pay attention to small expenses like ATM fees on a regular basis? How would you make sure that you compare budget versus actual expenses after the month has ended? Do you think you would be happier spending $1,000 on an experience like a spring break vacation or on something tangible like a new iPhone, TV, furniture, etc.?
Upload all three items: budget, non-monthly expense sheet, and paper on budgeting to BlackBoard no later than Tuesday, October 29th. The Paper is worth 100 points.
Grading Rubric for Paper:
Spelling, grammar, capitalization, punctuation, organization, and word choice. Up to 20 points.
Non-monthly expense sheet completed correctly. Up to 20 points.
Budget reasonable/unreasonable. Up to 20 points.
Justified housing, transportation, and food expenses adequately. Up to 10 points.
Creativity. Up to 10 points.
Thoughtful responses to several questions or prompts. Up to 20 points.
Incorrect information. Up to -10 points each.
Failure to follow directions. Up to -10 points.
Late work. -10 points per day.
Failure to indicate what decisions were made to arrive at take home pay. Up to -10 points.