Betty Lou$$s Budget:

Introductory Spreadsheet Training for Budgeting and Financial Management $($A$)$ Part A

Betty Lou is a recently admitted HKS MPA student facing the challenge of financial planning for the next two

years. The assignment in this case is for you to prepare Betty Lou$$s budget for graduate school.

This case walks through the events in Betty Lou$$s life between admission and the end of orientation. As you

read the case, isolate the relevant information regarding Betty Lou$$s sources and uses of funds to construct Betty

Lou$$s budget. Using the data provided and the Excel tips offered in the Exhibits, create a flexible, easy$-$to$-$

understand budget for Betty Lou to plan for her financial needs during graduate school. March $27$: CONGRATULATIONS! You$$ve just been admitted to the $2-$year Master$$s in Public

Administration program at the Harvard Kennedy School in Cambridge, Massachusetts.

After calling friends and family to share the excellent news, you get on the Kennedy

School website and excitedly pour over the information about the program you$$ll be

starting in September. Then you land on the annual tuition and fees page and your

stomach drops:

Tuition and Fees$1$

Tuition $ $37,576$

Activity Fee $ $150$

Emergency Health Service Fee $ $1,126$

Health$/$Hospital Insurance $ $1,714\_\_$

Total $ $40,566$ Estimated Living Expenses$2$

Room and Board $ $19,377$

Personal$/$Travel $ $4,739$

Books and Supplies $ $1,928\_\_$

Total $ $26,044$

Grand Total $ $66,610$ How are you ever going to pay for these two years back at school!?!

April $8$: You meet up with some fellow MPA admits in your hometown $($you$$ve connected

with them on facebook$)$ for drinks. You and two of the admits $($Alex and Max$)$

really hit it off and decide to be roommates in the fall. Having roommates is a

great way to minimize costs as you can share all housing$-$related living costs

across the three of you $($rent$,$ utilities, tv$/$internet$).$ You each plan to check out

Craigslist postings and talk with friends to come up with some three bedroom

housing options near campus. The stress of all these costs is really adding up$,$

but you$$re relieved to have some new friends to navigate the process with and

you can$$t wait spend more time with them in the fall.

April $28$: You and your future roommates get together at Max$$s apartment to talk over the

listings you$$ve each found. While discussing the next two years, you notice Max

has an Excel spreadsheet detailing a personal financial plan $$ tuition costs,

summer travel, living expenses, fellowship funding, financial aid, it$$s all there!

You realize this is just what you need to make sense of the costs you$$ll be facing

for the next two years. Max, a former consultant and a whiz with Excel, walks

you through the spreadsheet and you head home, determined to create one of

your own.

April $29$: Back at home you begin to draft the Excel model with the information you

already know: tuition, books, stipend, etc. There are other costs that you$$re less

sure about, but you know you$$ll have to factor them in at some point: rent,

utilities, groceries, cell phone, HBO cable $($you can$$t miss your shows$),$ etc. You

aren$$t sure how much each of these will cost just yet, but you decide to make

some assumptions for now and update the information as you learn more about

the cost of living in Boston. Congratulations! You$$ve just learned that you$$ll be receiving a scholarship to

cover the cost of books and supplies for both years of school. A publishing

company in your hometown awards ten of these scholarships each year. You$$re

feeling better as things are starting to fall into place and $($after updating your

Excel spreadsheet with this new information$)$ you can now see how this

scholarship will affect your total cost of school.

May $20$: You have narrowed your apartment list to three options with Max & Alex. Here

are the specs of each:

Porter Square

$3$bd $1$ba$,$ first floor in a three$-$story converted home

$$ Laundry in basement $($free$)$

$$ Extra storage in basement

$$ Quick walk to the T

$$ $$2,300/$month

Inman Square

$3$bd $2$ba in a newly renovated apartment building

$$ Laundry in basement $($coin operated$)$

$$ Heat and hot water included

$$ Parking spot included

$$ $$2,200/$month

Central Square

$3$bd $2$ba in a larger apartment building $$with

character$$

$$ Laundry in basement $($coin operated$)$

$$ Quick walk to the T

$$ Near great shops and restaurants

$$ $$2,100/$month Betty Lou decides to move in to the central sq