Introduction
Have you ever wondered what the future holds? The choices you make today are shaping your tomorrow's. You will be exploring your earning potential and creating a budget that might represent your real life. Are you on the right road in your education to meet the goals you have for your future?
Task
Based on your grade you will be given a yearly salary. Better grades equals better pay. Based on this yearly salary you will calculate your taxes, housing cost, automobile costs, and many other things that go along with living in the real world. So often we do not understand the struggles that our parent's or guardian's have gone through to keep food on our tables. This webquest has been thoroughly researched to reflect the cost of living in today's world.
You will research and calculate budgets, learn the limitations of your income, and begin to appreciate the power of good budgeting. Many times you will need to manipulate your budget in order to afford the necessities and luxuries you would like to have. As you cut your budget to fit your salary, you will begin to experience the struggles of real life.
Process
1. Salary
First, you need to know how much money you can spend per month.
a) It pays to do well in school! Based on your grade you will have a salary range per year. Check ProgressBook for your Math grade and use the Your Salary picture to determine your potential yearly salary, then record your data on 1a.
b) Determine the range of your Monthly Salary by dividing each number in box 1a by 12. You should have 2 numbers. These two numbers become the low and high end of your monthly salary.
Ex: GPA = 83
Salary Range per Year: $22,000 - $27,999
$22000 divided by 12 Months = $1833.00 (round to the nearest dollar)
Do this again, using the high end of your yearly income ($27,999 instead of $22,000).
Example: $27,999 divided by 12 monthly = $2333.33 (round to the nearest dollar: $2,333)
c) Determine the range of your hourly wage by dividing the 2 numbers in box 1a by 52 weeks and then 40 hours. These two numbers become the range for your hourly wage.
Ex: GPA = 82
Salary Range per Year: $22,000 - $27,999
$22000 divided by 52 weeks, divided by 40 hours = $10.58 per hour (round your answer to the nearest cent).
Do this again using the high end of your yearly income. Use $27,999 instead of $22,000.
Ex: $27999 divided by 52 weeks, divided by 40 hours = $13.46 per hour (round your answer to the nearest cent).
d) Now you will determine what type of job you can do based on the amount you can make per year. Each year the US Government surveys millions of Americans and determines how much different jobs pay per year, per month, or per hour. You will research and choose a career based upon your yearly or hourly wage range. On this web site there is a list of many jobs along with their Median wage.
Website: Jobs
For each job on the web-site there is a Tab called Salary. This should contain the information you need.
You must choose a job that does not exceed the Yearly, Monthly, or Hourly Salary ranges. You may pick a job
below your ranges but you MAY NOT go over the high number in your range. If you can't do the job you would
like, look at the section called Related Occupations. This is a group of jobs that are similar to the job you want.
e) Once you have found the job you would like, record the Median Yearly Income for the job in the box , based on the information from the salary tab for that job. If the website does not list the median income for the job you chose you may not use it.
f) Next, find the Actual Monthly Wage by dividing the median yearly income by 12.
g) Record your actual hourly wage by dividing the Median yearly Income by 52 and then by 40.
2. Taxes
Every American must pay taxes and other expenses to help support the running of our government. Next you will find how much money you must pay per month in taxes, social security, and Medicare.
a) First you must find out what percent of your income is taxed and deducted per year. The more money you make the more the government taxes. Also, the more you pay in Social Security and Medicare.
Using this Web page find out what percent of your income is taxed. Don't forget about the 5% of your income
that goes to Social Security and Medicare. Everyone must pay this.
Website: Taxes, Social Security, and Medicare Page
b) Next Subtract your Yearly taxes from your Median Yearly Income (box 1e) record the results in 2b.
c) Divide the results in 2b by 12 to determine your monthly salary after taxes, record in 2c.
This number is very important, this is the amount of money you have to spend each month!!!
You may not go over this amount in any month. Good Luck!
3. Housing
You will explore some websites to find a place to live in Springfield. Whether an apartment or house, you will need to calculate monthly payments. You may not live with someone else and you must live in your own apartment or home.
Living in a house or apartment is your choice. Each one has their own expenses. Keep in mind that homes cost more and have other costs associated with them, but you own it. Buying a home should be a goal of yours, but they can be very expensive.
APARTMENTS VS. HOMES
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Apartments |
Homes |
a) Rent or Mortgage
Homes
Homes are one of the best investments you will ever make. They are much more expensive but you are buying it. In order to buy a home you must get a mortgage. A bank lends you money to buy the home and you pay them back with interest. Unless you make more than $40,000 you should probably not spend more than $100,000 for the cost of a house.
Website: http://www.homes.com
To find the cost per month of a home use this Mortgage calculator
Website: Mortgage Calculator
Assume you have 4.5% interest over 30 years. Find the Monthly payment. Record this information in box 3a.
Apartments
Apartments are generally cheaper than houses. You do not pay for property taxes, box 3b. If you want apartment insurance you can assume you would pay $20.00 a month for renters insurance or $240.00 a year in box 3c. Many apartments come with free utilities such as gas and water. Read the information carefully to see what they pay.
There are three primary kinds of apartments.
1) Economy or Studio - a very small one room apartment.
2) Flat - usually a 1 or 2 bedroom apartment.
3) Town house - usually a large 2 to 3 bedroom apartment that usually has a yard included.
Use this website to find Apartments: http://www.apartmentguide.com
Once you find an apartment you like you may want to go to: www.apartmentratings.com. At this website
people can leave their opinions about the apartment.
If you rent an apartment you must find 1) the price per month. 2) What utilities are paid. If the website about the
apartments says nothing about free utilities you must pay them all.
Record the monthly rent or monthly mortgage amount the first box, the type is either house or apartment, and #rooms is the number of bedrooms in the home. Record all 3 results in box 3a.
b) Skip this step if renting an apartment. If you buy a home you must determine the yearly property taxes, apartments do not have taxes. Take the price of the home and find 3% of the total value of the home. Remember turn 3% into a decimal and multiply by the total cost of the home. This is your yearly property taxes. Divide this number by 12 to find your monthly property taxes. Record both results in 3b
c) For apartments: If you want apartment insurance it will cost you $20.00 per month or $240.00 a year. Record your results in 3c.
For homes: You must also have home owners insurance which is 1% of the value of the home. Find 1% of the
total value of the home. Next divide that by 12 to determine the monthly insurance payment. Record your
results in 3c.
d) Add the Mortgage , Monthly Taxes, and Monthly Insurance together. This is the total expenses of your house or
apartment per month. Record your results in 3d.
4. Vehicle Costs
Research web sites to find a vehicle. Do you want a car, motorcycle, or do you want to ride the bus? You will need to determine what kind of vehicle you will purchase (if your income allows you to do so) and calculate monthly payments along with insurance and gas. When searching for a vehicle you must purchase it within 100 miles of Springfield. You may not buy a car from someone living in California or some other place far away. If you can not afford your own vehicle you may use the bus by buying a bus card for $40.00 dollars per month. Add this cost of a bus card to the box labeled other:_______ in box 6a.
a) To find a vehicle, use these web site
Autotrader.com
Record the model and type of vehicle along with the cost in box 4a
b) Just like everything else in the world you must pay tax on a car purchase. To find the taxes for the vehicle find
7.5% of the cost of the vehicle in box 4a. Remember 7.5% as a decimal x the cost of the car. Record this
number in box 4b. Next add the Cost of the vehicle to the tax. Record this in the second box in 4b. This is the
total cost of the vehicle.
c) Just like homes you must borrow money from a bank to buy a vehicle. New cars and used cars have different
rates and number years. Use the Car Payment Calculator to figure out the car payment for your vehicle.
You must pay interest on a vehicle that you are buying. New and used vehicles have different interest rates.
New Cars 5% Interest over 5 years
Used Cars 7.5% Interest over 3 years
Take the total cost of the car box 4b and use the information above to calculate the monthly cost of your car.
Record this in the highlighted box 4c Monthly Car Payment d) and e)
Next you must determine how much gas and how much insurance costs for your vehicle. Based on the size of
the vehicle use the chart to record your information for box d) and e). If you do not know how many cylinders the
vehicle has please ask your teacher or read the description of the vehicle on the website.
Website : Gas and Car Insurance Chart
f) Now add the total in the 3 boxes this is your total monthly vehicle expenses. Record this
amount in box 4f.
5. Utilities
a) You will need to budget money for your utilities. Some places come with free utilities. You need to read the
description of the apartment carefully. While others you have to pay them all yourself. Keep in mind different size
homes cost different amounts to heat, cool, etc. Remember this when choosing your home.
Website: https://docs.google.com/document/d/1qiYnKoC08y4-7XdtLcGWe4mFbTNJ-_c65LP2XUGqeJk/edit?usp=sharing
b) Next add the total monthly cost for each utility and put the total in box 5b. This is your total monthly utilities cost.
6. Living Expenses
a) Now determine your other expenses: food, cell phones, pagers, health insurance, clothing, entertainment, savings
accounts, and miscellaneous items. Certain parts of this section have minimum amounts you can spend on them.
Things to Remember.
- You must spend at least a minimum amount in Food, Clothing, Entertainment, and Miscellaneous Items.
- Miscellaneous Items include toiletries, cleaning supplies, and household supplies.
- You do not have to have Health Insurance, but think about the video and the problems they had. Co-pay is the amount you have to pay extra for visiting the doctors office.
- Emergency Funds are always good to have when you need a little extra money for something, but you don't have to have one.
- You must have a home phone, a cell phone, or both.
- Any other things you may want for your home, such as a pet, plasma screen TVs or any thing else would go into this section.
Minimum amounts to spend.
Groceries $100.00
Clothing $40.00
Just a home phone. $50.00
Cell phone without home phone $75.00
Both home and Cell phone. $100.00
Entertainment $35.00
Basic Health Insurance with co-pay of $25.00 $100.00
Good Health Insurance without co-pay $150.00
Miscellaneous $35.00
Pet $50.00
Other option expenses include charitable giving, haircuts, gifts, travel, medicine, and car repairs/maintenance.
b) Now add the totals in box a) together and record your total in box b) is your Total Monthly Living Expenses.
7. Total Monthly Budget
The most important step
You now must find the total amount of your expenses per month.
a) Record once again the total from box 2c (Monthly Salary after Taxes) , so that you can easily reference it during
this last section. Remember this is the total amount of money you have to spend each month on all your bills.
You can not go over this amount per month.
b) Add the totals of boxes 3d, 4f, 5b, and 6b together. Record in box 7b.
If you make any money from being an accountant for someone else list that income in 7b. This is extra money you
have each month for being someone else's accountant.
This is your total monthly expenses. Was this total less than your Monthly Salary after taxes? If so you have
some money left over. If it's more than your monthly total you must go back and adjust your monthly expenses to
fit your salary. Maybe you can't afford a home, a car, or your cell phone.
c) Any money left over should be put into your savings account box 7c and used for any emergencies of life, such as
car repairs, doctors visits, or psychiatric counseling. It is always recommended to save about 20% to 30% of
your income each month, but the choice is up to you.
Evaluation
You're almost DONE!!
FINAL COPY:
- Make sure all information is typed into the "Monthly Expenses" form. Use this page for your final copy (Monthly Expenses Page).
- Please use COMMAND+B to bold your answers. . Make sure your final copy is readable.
- Upload your monthly expense form to Google Classroom under the assignment Monthly Expenses.
Questions:
- Complete your questions on Google Classroom under the assignment If My Life Started Today Essay.