Economics
Budget Activity for PowerPoint Presentation
Can I Afford the Lifestyle I Want?
by Doug James
North Heights Alternative School
You are going to go through some of the steps it takes to buy a new home an a new car and create a budget for the lifestyle you want as a "typical young adult".
Check the newspaper and real estate adds and find a new home you think will suit your needs (be practical).
Things you will need to do:
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1. |
Get the price of the home. |
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2. |
Go to bankrate.com web site and find out the interest rate on the home for 15 years and 30 years. |
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3. |
You will also need to find out what taxes are for one year. (selling price x 2.3%) |
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4. |
Go to quicken.com website and find out what the average insurance will be for one year. |
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5. |
Go to the Internet ( bankrate.com) and , using the information you have, create an amortization schedule and find out what the finance charges and your monthly payments will be. Then figure the total buying cost. (down payment + loan payment + finance charges + taxes + insurance) Now figure the total monthly payment. P. I. T. I. |
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6. |
Search the newspaper ads and find a new car you think will fit your budget (be practical) (not lease). |
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7. |
Get the price of the car and go to bankrate.com and find out what the interest rates are for 60 months |
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8. |
Use $1500 yr. For insurance cost. |
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9. |
Use the computer (bankrate.com) to find out what your monthly payments and total buying costs will be. Total buying costs= down payment (20%) + loan amount + finance charges + insurance + TT&L. |
On the next activity, you will need to calculate your personal budget for one month. Use the worksheet below for budget information. Assume you are 23 years of age and married.
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10. |
Group the items into five major categories. (Housing, Taxes, Savings, Miscellaneous Expenses, and Living Expenses) Use Microsoft Excel to generate a pie chart. |
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11. |
Can you afford the new home and new car on an income of $1750 a month have money for recreation, savings and emergencies? If not, go to salary.com on the Internet and find you a job with the salary you need (be realistic). |
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12. |
Give a description of the job. Are you qualified for the job? Will you earn a salary that will support your new budget? |
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13. 14. |
What are the
qualifications for the new job? Use the qualifications listed
on the web site. If a college a degree is required, find what is needed
and the cost. http://www.collegenet.com/
Write an essay that
will include a brief plan on how you are going to acquire these
qualifications, and the possible changes you need to make on your budget
to stay afloat. |
Budget Worksheet
Monthly income=$1,750.00 / $21,000.00 per year
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1 Range |
2 Category |
3 Percent Chosen |
4 Dollar Target |
5 Revised Amount |
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Fixed Expenses |
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18-25% |
Housing |
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18% |
Taxes |
.18 |
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1-5% |
Insurance |
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0-10% |
Debt Repayment |
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Savings |
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0-10% |
Goal Achievement |
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0-10% |
Irregular Expenses |
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0-10% |
For Emergencies |
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Living Expenses |
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5-12% |
Utilities & Phone |
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8-15% |
Food |
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5-15% |
Transportation |
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2-5% |
Medical |
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2-8% |
Clothing |
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2-9% |
Durable Goods |
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1-5% |
Personal Grooming |
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5-10% |
Recreation |
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0-9% |
All other |
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Total |
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