1.04 Why Budget?

- Budget Worksheet
Use this worksheet to complete the assignment. It contains suggested ranges for most
expenses based on common amounts for a single person. Feel free to use them to estimate
your costs, or to use your own experience or research.

Part One–Calculate Your Budget

Step 1: Determine Gross Annual Income
Your budget will be based on what your adult salary would be in a starting position of a full-
time career. Think back to the two careers you researched earlier in the module and research
the starting salary for the option that interests you most. Realistically, your annual income
should be under $65,000 for this budgeting exercise.

Career Choice: Real estate agent

Starting Gross Annual Income: 80,000 dollars

Step 2: Calculate Taxable Income

Enter your gross income from step one and subtract the standard deduction to determine your
taxable income.

Starting Gross Income - Standard Deduction = Taxable Income

$80000 - $12,950 = $67,050

Step 3: Calculate Income Taxes

Using the marginal tax rate table, break down your taxable income into each bracket, then
calculate your taxes paid in each bracket. Add them together at the bottom to find your total
taxes paid.

Marginal Tax Rate Table – Show your work

Tax Rate Tax Bracket How much taxable money do Calculate taxes paid
you make in this bracket?
10% $0-$9,700 $9,700 $970
12% $9,701 – $39,475 $29,774 $3,572
22% $39,476 – $84,200 $27,574 $6,066
Total Taxes Paid: $10,608
Step 4: Calculate Your Net Income
Enter your starting gross income from step 1 and subtract the total taxes paid from step 3 to
find your net income.

Starting Gross Income - Total Taxes Paid = Net Income

$80,000 - $10,608 = $69,392

Step 5: Calculate Expenses

Fill out the expenses in the table. You are provided minimums or suggested ranges based on
common amounts for a single person. Choose a realistic amount considering your needs and
wants. You can also do additional research or talk to family members about the best costs to
include. If you choose $0 for an expense, explain why.
Housing (Approximately 30% of your Yearly Cost
gross income)
Mortgage or rent (Research based on your $24,202
area and type of home. Multiply monthly
rent/mortgage by 12 to get the yearly cost.)
Maintenance and repairs ($200 or more) $200
Supplies ($300 or more) $300
Homeowner’s or renter’s insurance $700
(research for your area/housing type)
Furnishings ($500 or more) $600
Property tax (if you own property) -
Subtotal $26,002

Transportation Yearly Cost

Auto loan payment (based on the vehicle you want - $5000
monthly payment x 12)
Bus and taxi/Uber/Lyft fare (varies) -
Auto insurance (research based on age and driving $1632
record what the average is)
Licensing and registration fees ($30–$150) $75
Gasoline (typical use for your chosen vehicle) $1500
Maintenance and repairs ($250-$750) $500
Other -
Subtotal $8,707

Utilities Yearly Cost

House Phone and/or cell phone ($600–$1,200) (You $750
should include the monthly bill and the cost of the
phone.)
Cable or satellite and internet ($950–$2,000) $1000
Electric and gas ($1,200–$2,400) $1000
Water and sewer ($800–$1,000) $975
Waste removal ($150–$250) $150
Subtotal $3,875

Food Yearly Cost

Groceries ($2,500 or more) $4000
Dining out ($600 or more) $3000
Subtotal $7000

Personal Care Yearly Cost

Health insurance ($3,000–$8,000) (You still have to $3000
pay for health insurance even if you get it through your
job.)
Other medical costs ($500 or more) $500
Hair and nails ($120–$500) $500
New Clothing/shopping and laundry costs ($500+) $3000
Health club or Gym ($300–$600) $401
Children (If you plan on having a child when starting -
your career at about ages 18-24, add $14,000 for
the year, per child)
Subtotal $8199

Entertainment Yearly Cost

Movies and streaming services ($120–$400) $1000
Vacation ($1,000–$2,000) $2000
Other (Specific hobby, weekends, etc. $500–$1,000) $2000
Subtotal $4000

Gifts and Donations Yearly Cost

Holidays and birthdays ($500+) $500
Charity or religious donations (varies) $2717
Other $100
Subtotal $3317

Pets Yearly Cost

Food ($250+) $300
Medical ($200+) $500
Grooming (varies by animal) $750
Toys $100
Other $500
Subtotal $2150

Savings and Investments (should total at least 10- Yearly Cost

20% of your net income split between the 3)
Retirement account $3000
Investment account $500
Emergency savings $300
Subtotal $3800
Step 6: Balance Your Budget
Fill in the net income from step 4. Next, add up the subtotals from step 5 and fill the amount for
total yearly expenses. Subtract the expenses from the net income. If you have a large surplus of
money left, adjust your budget by adding to different expenses, savings, or investments. If your
difference is a negative amount, adjust your expenses to balance your budget.

Total Net Income (Take it from Step 4 at the top) $67,050

Total Yearly Expenses (add up all your subtotals) $67,050
Difference (“Total Net Income” minus “Total =$0 :D
Yearly Expenses”)