Creating Your Budget
- Due Jan 26, 2018 by 11:59pm
- Points 100
- Submitting a text entry box, a website url, or a file upload
A budget is a planning tool that can be used to help individuals and families manage their money. The idea of a budget is to use money to stretch purchasing power and raise the budgeter's standard of living. Look at the sample budget below.
Sonny Cruz, a full-time tour guide, has an annual salary of $15,000. After he pays his taxes and health insurance, his annual salary is $12,000. This is what Sonny's monthly budget looks like:
| Income (after tax & health insurance) | $1000 |
| Savings interest earned | $ 4 |
| Total Income | $1004 |
| Fixed Expenses | |
| Housing/Utilities | $350 |
| Telephone | $ 30 |
| Transportation | $200 |
| Credit/Student Loan | $100 |
| Savings | $ 71 |
| Total Fixed Expenses | $751 |
| Variable Expenses | |
| Clothing/Personal Care | $ 50 |
| Food | $110 |
| Household Supplies | $ 25 |
| Medicine/Health Supplies | $ 18 |
| Entertainment | $ 50 |
| Total Variable Expenses | $253 |
| Total Expenses | $1004 |
| Comparison | |
| Total Cash Available | $1004 |
| Less Total Expenses | $1004 |
| Cash Balance | $ 0 |
Remember that income is money that you earn or "bring in." It can be wages, gifts, dividends, tips, or commissions, for example. Expenses are items that you pay. There are two types of expenses - fixed and variable.
- Fixed expenses – expenses that remain the same each month. Examples of fixed expenses include rent, car payments, insurance, monthly savings plan, etc.
- Variable expenses – expenses that change each month. Examples are clothing, food, entertainment, etc.
You will now create a personal budget. Look at the Starting Salaries chart for various career areas. Pick a career that is in an area of interest for you. Earlier this year we did a career interest inventory. Find a career in the areas the inventory indicated should be appropriate for your skills and interests. Remember there is a direct correlation in years of education to the salary that is earned. Click the Link to go to the interactive budget and begin creating your budget.
- The Interactive exercise will calculate your take-home pay. You can click on the links like Decoding Your Paycheck to see the deductions from your gross pay - taxes, for example.
- You must deduct expenses from your take-home pay. To do this, you must choose from the various size expenses in each grouping, Housing, communcations, etc. Click on the cost and it will be automatically added to your budget. If you do not complete this activity online and use a hard copy, you will have to do the math.
- After you have entered your expenses, you should compare "what you have left" unspent that is calculated on the Results page, or from your calculations. This could be used for savings!
When you complete this exercise, upload your results using the Submit Assignment link.
Information was copied from http://www.themint.org/teachers/budgeting-your-financial-resources.html on July 25, 2014.
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