EXPENSES AND BANKING SERVICES PROJECT The goal of this project is for students to create a budget based on both essential and discretionary expenses. Students will then analyze the budget they created using measures of center and spread. From there students will plan out their ideal life, down to their ideal jobs, salaries, car, home, etc. Fill out the chart below to the best of your abilities. For the Estimate column you are only guessing how much each expense would be. For the actual amount, you can put what you 9or your parent) actually pays or you can look up how much the average cost is in the state you live in. EXPENSE DISCRETIONARY OR ESSENTIAL ESTIMATE ACTUAL AMOUNT Cable TV Internet Dining Out -Restaurants Fast Food/Casual Eats Rent Phone Bill Clothing Beauty Products Subscriptions (Netflix, Hulu, Magazines, etc.) Hobbies/Sports Tuition Groceries Utilities (Electricity, Water, etc.) Car Note Total E: D: Once the chart is complete, use it to answer the following questions: What is the average amount spent on essential expenses What is the average amount spent on discretionary expenses. Find the median amount spent on all expenses. How much money would you need to make annually in order to afford your expenses? BUDGETING PROJECT PART 1: Choose the job you want. Look up the average salary of that job title. Write down the job title and salary below. JOB TITLE: AVG SALARY: What are the requirements of that job? (Bachelor’s Degree, Medical School, Certificates, Skills) Net Income is define as the money you actually receive (after taxes, deductions, etc.) Gross income is the money you make before taxes and deductions. Calculate the net and gross income you would make given your salary and a %29 percent tax. How much would you make every paycheck? (If you get paid bi-weekly |divide by 26, weekly | divide by 52, Monthly divide by 12) MONTHLY INCOME: PART 2: Choose the lifestyle you would like to live. Are you living in an apartment or living in a house? If you live in a house how much does it cost? Look up average rental rates or property costs in the state you want to live in. STATE: Maryland PROPERTY COST: Let’s calculate how much your mortgage would be every month given that you took a loan out with a 3.7% interest rate on a 30 year mortgage. MONTHLY RENT/MORTGAGE PAYMENT:    M = Monthly mortgage payments P = principal amount i = monthly interest rate (interest rate divided by 12) n = number of months What about transportation? What kind of car do you want? How much does that car cost? Calculate the amount of money you will spend on transportation every month? CAR: COST OF CAR: To pay for the car you took out a car loan which had an interest rate of 8.7%. Estimate the monthly payments you would have to make for a 5-year loan term. (60 months) MONTHLY CAR NOTE: The job you wanted may have required you to have some sort of degree. So you went to school so that you could meet the qualifications. Doesn’t have to be college, could be trade school. Look up the average tuition costs for someone who would attend the schooling you need. If Bachelor’s look up average cost of Bachelors, If Masters look up average cost of masters degree, If trade school look up average cost of trade school, etc. The interest rate on your tuition loan is 11%. TUITION COSTS: MONTHLY PAYMENTS ON TUITION: How much do you think you spend or would spend on other things every month? (Use Discretionary expenses from Budget table from earlier) OTHER MONTHLY EXPENSES: PART 3: Saving’s Account. You decide you want to save some of your monthly income. So you put 15% of every paycheck into a savings account. How much money will be in the savings account after 1 YEAR: 5 YEARS: 10 YEARS: Your savings account has a compound interest rate of 4.5% annually. Recalculate how much money you would have in 1 YEAR: 5 YEARS: 10 YEARS: PART 4: Put it all together. How much would you be taking home every month? Is it enough for you? MONTHLY INCOME – MORTGAGE – CAR NOTE – MONTHLY PAYMENTS ON TUITION – SAVINGS = Also, think about things you may not have thought about, such as kids, health insurance, vacations etc. ARE YOU READY FOR ADULTHOOD!