Course - Adulting

ANNUAL PERSONAL BUDGET ASSIGNMENT

Everyday you make financial decisions thatdetermine how much you spend, save and invest. Howgood are you at managing your money? Can you take charge of your own financial affairs, be smartwith money, independent and plan for your future?

Answer the questions below and start on theroad to financial literacy.

While making decisions about how you spend and save your money stop firstand think about how environmentally responsible lifestyles can contribute to a healthy, and sustainableenvironment.As well, reflect on the reasons why you would choose one dollar amount over anotheramount.

Number each question, and type your numericalanswers in Word, followed by anexplanation of your choice.

Use your answers to prepare a spreadsheet of your budget showing monthly net income, expenses, and savings.

Follow the instructionsbelow and you will be on your way to being financially independent versus financially dependent.

PART 1 -CAREER & INCOME

Choose an Ontario career from indeed (www.indeed.com)

Do research on that career andselect astartinggrosssalary(before taxes)

1. What career have you chosen?

2. What is a reasonable starting salary for your preferred profession?

3. Grossmonthly income ________________ (divide yearly salary by 12)

4. Net monthly income ________________

About 35% of your gross monthlyincome is subtracted from your pay cheque every month. Certaindeductionsaretaken off (e.g.Income Tax, CanadaPension Plan, Health Insurance etc

Calculate the deductions for the net income usinghttps://neuvoo.ca/tax-calculator/

PART 2 -EXPENSES

Pretend you have graduated fromLambton College in Toronto, have your first real job, and are living in arented apartment in the town/city where you work.Prepare a budget for yourself for a one year period. To help you get started, you must first answer the following questions with anexplanation after each.

1.Savings

Always pay yourself first bysaving 10% of your net income. This is savings that isautomatically deducted from your paycheque or withdrawn from your bank account.Explainwhatyou are going to savefor in the near or distant future.(e.g. car, house, emergency fund)

2. Rent

What is your monthly rent for an apartmentor townhouse in your chosen city?You can sharean apartment with a friend or two if you like.

3. Food

Create a weekly shopping sample menu and getprices for your food items.Multiply your weekly total $ amount ofgroceries by 4.3 to come up with an estimated monthly total. Compare your monthly total with themonthly average that follows:Groceries including snacks, plus household cleaning supplies: Dailyaverage $12.50 to $15.00 per person. (12.50 X 30 days = $375/month)Ask yourself, is my monthly grocery bill realistic or not?

4. Transportation

Your options are: taking the bus, leasing (or renting) a car, or purchasing a usedcar. A city bus passcosts$150.00 a month.Please explain why you would be taking a bus, instead ofhaving a car, and tell me why it would benefit you. Research your monthly car or lease payment bycheckingoutsuch websites aswww.autotrader.ca www.leasebusters.comandwww.driverlane.com/calculator/calc.aspCar loans or lease arrangementsusually are for 3 to 5 years.(take a photo of the ad and submitwith your assignment)

5. Automobile costs

Car operation(gas/oil) $150 to 175 per month (consider such factors as: environment, car usage, season, distance, supplyand demand)

6. Car Insurance-($3000-$6000 per year

7. Cellphone

Options: 1) Pay as you go appox (20$ per month) 2) Contract $45.00 to $90.00 per month

8. T.V. & Internet

Basic cable & Internet $35 to $75 per month. Choose one or both(Factors: high-def, speed of modem, number of channelsetc.)

9. Credit Card

Payments-usually $64 to $74 per month (avoid credit where possible) Explain in detailthe types of items you are putting on your credit card each. (e.g. you might put $64 worth of items inone month and then have $74 in another month) Be realistic.

10. Grooming

Haircuts, personal hygiene products, soap, shampoo, toothpaste, cosmetics,medications, $35 to $70 per month(what would your money go towards each month e.g Haircut inone month, hygiene products the next etc.)

11. Recreation

Movies, books, magazines, DVD rentals, concerts, eating out, $50 to $100 per month. Explain what you would spend your money on each month)

12. Utilities

Heat, hydro, water, depends if it is covered in your rent or not, $50 to $100 per month(Factors: amount of usage, time of year)

13. Hobbies

Depends what you do, $25 to $50 per month (describe what interests you would spendyour money on)

14. Employment expenses

Coffee fund at work, work social committee fund, buying your lunch, $10to $200.00 per month(explain how much money you would contribute and why?)

The following 8 categories don't require any explanation. Just indicate the realistic amount onyour budget spreadsheet:

15.Clothing-boots, shoes, bathing suits, jackets, suits etc. (remember to consider all seasons)

16.Health and LifeInsurance

17.Sports club membership-$25 to $50 per month

18. Maintenance/Repairs-redecorating, household repairs $15 to $20 per month

19.BuyingGiftsfor others-birthdays, Christmas etc. $35 to $50 per month

20. Travel/Vacation-once a year and/or small holidays throughout the year $50 to $85 per month

21. Charity-gifts of money to charitable organizations like world wild life, cancer society, food bank,church, $15 to $20 per month.

22. Loan payment

23. Tuition Fees

24. Books

PART 3REFLECTION

Once you have completed thebudget in Excel, reflect on how you are spending your money. You may discover you are spending more than you are making or have little money left.Describe in 3 to 4 paragraphs what you would do differently to cut down on your monthlyexpensesand totry and save money. (so that you have more surplus or profit each month) (e.g. youmay be spending $10 per day at Tim Hortons on campus, which would equal about $200 a month, so youmightconsider "brown bagging it" andsave that money for a vacation, ormaybework out at home,insteadof paying for a gym membership)

Keep in mind that you have more control over your variable expenses then your fixed expenses. Lookat all your variable expenses first andsee if you can save some money.

Fixed expensesare expenses that don't generally change from month to month, like rent, most utilitiesand car payments.

Variable expensesare expenses that can easily change, like the amount spent on food, entertainment orclothing.

Total your fixed expenses per month=___________________

Total your variable expenses per month=___________________

PART 4INVESTMENT

You have inherited $100, 000 from the passing away of your Great Aunt.

Create an investmentplan in the attached chart, showing how you will investthe money.Fill in the "Amount of each investment", "Type of Investment" and a description of what you are saving up for.In full sentencesin Word, comment on your choice of lifestyle, level of risk and expectant return andwhy you chose the investment type that you did.

Your assignment must include:

-Title Page

-Word Document with questions, answers and explanations

-Personal Budget Excel Spreadsheet

-Reflection on budget and how to save money by cutting backexpenses(in Word)

-Investment chart and explanation(in Word)