Economics​ ​|​ ​8.

3 Life & Work - Budget

Introduction:​ ​The following activities will guide you through the process of how to budget your money
responsibly. You will begin by deciding on a career of your choice, determining your monthly income, and
estimating your monthly expenses. You will be responsible for keeping track of money earned as well as
money spent. At the end of this lesson you will be able to: Apply math to real life situations, develop a
realistic view of the cost of living, differentiate between necessities and luxuries, and use technology as a
resource.

The Process: ​How likely is it that you will become a professional athlete or other elite professional? Your
first task will be to decide on a "realistic" career that would be suitable for you in the future. You are
required to research the career that you have chosen.

Once you have chosen a career, you will use the Internet, family/household information, and newspaper
classifieds to find information about various wages and expenses, which will be used to create a personal
budget. Remember, this is going to end up being hypothetical because we are asking you to look into the
future. Therefore, you should not use your family’s actual data to complete this budget, but use it as a
guide to ensure that you are using realistic values.

Part A – How much can I afford?​ ​(5 points)

Step 1: ​Find and choose a career of your own to use to create an actual budget.

Career choice: ___Interior Designer_ (be as specific as possible)

What are the requirements of this job (educational/other)?

(Steps I need to take after high school)

1. earn a bachelors degree in design

2. Pass the national council for interior design qualification exam
3. 60 semester hours of interior design work
4. Build a portfolio/intern at least 60 hours

What is the starting average salary as well as the top end salary?
47,300-56,000

Some resources you may utilize:

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 http://www.bls.gov/oes/current/oessrcst.htm
http://www.payscale.com
http://kiplinger.salary.com​/
http://www.themint.org/kids/starting-salaries.html

Part B - Creating a Budget

Okay...we're not going to bore you with a lot of details here. Simply put: we want you to imagine how you
want to live once you're on your own. What kind of car are you going to buy? Where are you going to live?
Do you love to go to the movies or to the clubs every weekend? Remember, it's your life, you can do
whatever you want...or can you?

Step 1:​ Answer the following questions in sentence format. ​(5 points)

• ​
What is a budget?
A budget is a certain amount of money you limit yourself to for your wants and needs.
• ​
What does a balanced budget mean?
a balanced budget is equal parts for your needs and wants
• ​
What are regular expenses?
Regular expenses are expenses that you use regularly. An example is gas, food and pets.
• ​
What are discretionary expenses? Discretionary expenses is spending money that is’t necessary and is
based more on wants then needs.

Step 2:​ You are responsible for creating a monthly budget. Your budget must be realistic and you must "live"
within your means. Use the Internet, family/household information, and newspaper classifieds to complete
the budget worksheet on the back of this assignment. ​You must​ include documentation to support all of your
numbers, such as website address, copy of bill from home, copy of classified ad, etc.

Convert yearly or weekly income/expenses to monthly amounts and enter them into the budget worksheet.
For example:
● $30000 yearly salary divided by 12 = $2500 income per month
● $125 weekly groceries X 4 (roughly, number of weeks in month) = $500 per month

Step 3:​ Create your budget using the worksheet on the next page. ​(10 points)

Be particularly careful on the cells indicated with the asterisk (*) as these are places where accurate math
skills may be required. It would be wise to double check these calculations as errors here will affect your
final budget.

Monthly Budget
Worksheet

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 Income
Monthly Income 3,941.67
- Deductions (monthly income X 25%)
= Net Monthly Income 2956.25*
Monthly Expenses
Regular Expenses
Housing/Shelter 1,105
Garbage Pickup 45
Water 25
Parking Fees part of rent
Heating 38
Electricity 175
Phone 24
Renters'/Homeowners' Insurance 155
Auto Payment
208.33
Auto Insurance 90
Auto Maintenance (gas, oil, repairs, etc.) 139
Clothing 75
Food/Household (groceries, paper towels, cleaner, Etc.) 115
School Loans 150
Personal care (haircuts, manicures, etc.) 50
Total Regular Expenses 2294*
Discretionary Expenses
Internet 60
Cell Phone 30
Cable Television
Life Insurance 126
Health Care 165.76
Entertainment (movies, music, games, vacations) 21
Miscellaneous 85
Gifts 15
Savings 159.24
Total Discretionary Expenses 662*
Total Monthly Expenses 2956.25*

Balancing Budget

Net Monthly Income 1956.25*

Total Monthly Expenses 1956.25*
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Balance 0*

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