Over the next few weeks you will be using a number of online resources to research and build a monthly budget. A budget is a spending plan for your money. It helps you make sure you always have enough money for the things you need and the things that are important to you. A budget helps you stay out of debt!
How to set Up a Budget
To learn more about how to set up a budget, watch the video below
After you watch the video, think about these questions:
- What is a balanced budget?
- What is the difference between a need and a want?
- What bills and other costs of living will you need to put into your budget?
- What items in your budget are most important to you? (for example, would you rather have a nice house, or a nice car?)
Building Your Budget
Part 1: Your Income
Before you can decide how much money you can spend, you need to know how much money you make.
1. Choose your career (you should already have done this during your class careers presentations). Write down your career on your budget worksheet.
2. Find the annual salary for your career. This should be the 2016 Median Pay from bls.gov. Remember that you will probably make much less money than this when you get your first job. People usually work at a career for several years before they earn the Median salary. Add your annual salary to your budget worksheet. |
3. Calculate your monthly paycheck. You can calculate this using the paycheck calculator on paycheckcity.com:
4. Find your "Net Pay" after taxes.
Your Net Pay is the actual amount of money that you will take home. You should see this in your results from the paycheck calculator on paycheckcity.com. Your Net Pay is what you should base your budget off of. |
Part 2: Savings |
Part 3: Food |
Saving money is important! You never know when you may lose your job, or want a little extra cash for a big purchase.
Calculate how much money you should be saving each month. It is recommended that you save AT LEAST 10% of your paycheck every month.
To calculate how much you should put into savings, multiply your monthly income by 0.10 You can use the calculator in your computer's Start Menu |
Use the shop.lowesfoods.com website to shop for everything you need for a week. Don’t forget to include household products like paper towels, cleaning supplies, or shampoo. How much money do you need for one week? Now multiply that number by 4 to get your monthly grocery costs.
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Part 4: Housing
Where you can afford to live depends on your salary. Will you buy a house? Rent a house? Or rent an apartment?
1. How much money can you spend on a house payment or rent each month?
Use the Affordability Calculator on Zillow.com. Enter your annual salary in the calculator and leave everything else as it is. 2. If you are buying a house, what Home Price can you afford?
This can also be found on the Affordability Calculator on Zillow.com. |
3. Now it's time to choose your home! Use one of the websites below to choose where you will be living.
4. Don't forget Utilities! (water, gas, electric, etc.)!
Apartment: average of $200 per month House: average of $300 per month |
Part 5: Transportation
How will you get around? You need transportation to get to your job, the grocery store, and anywhere else you would like to go
1. If you are buying a car, what monthly payment can you afford?
It is recommended that you do not spend more than 20% of your monthly income on your vehicle. This includes your car payment AND gas. To calculate this, multiply your monthly income by .20, then subtract $100 to make sure you have enough money left over for gas. 2. If you are buying a car, add $100 to your monthly budget for gas.
3. If you are NOT buying a car, add $45 to your monthly budget for a 31-Day Bus Pass.
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Part 8: InsuranceChoose which insurance you will purchase and enter it on your budget worksheet.
Auto Insurance covers the cost of any medical expenses or of fixing your car if you are in an accident Homeowner's Insurance covers the cost of repairing your home and replacing your possessions if there is a fire, a burst water pipe, or a natural disaster Renter's Insurance covers the cost of replacing your possessions if there is a fire, a burst water pipe, or a natural disaster in your rented home |
Part 9: EntertainmentIt’s time to have some fun! Do you like to go to the movies? A basketball game? Clothes shopping? If you have any money left over, here is where you can decide how to spend it. Choose at least FOUR activities you would like to do this month (one activity per weekend) and research how much they will cost. Staying home and doing something FREE with your friends IS an option.
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It's Time to Share your budget!
Log on to your Google Drive and create a Google Site to share how you have chosen to spend your money. Follow the example here:
Make sure you include ALL your expenses from your budget worksheet!
Don't forget to add your reflection at the end.
Don't forget to add your reflection at the end.