Instructions

1. Planning your cash flow needs for a household is important. After all, you want to make sure there's enough money in the bank to keep a roof over your head and your belly full.

Using learning outcomes five to eight, describe a time you prepared a cash budget for your household. Provide details for how you estimated your inflows and outflows. If you ever required additional funds due to a large outflow, explain how you secured this financing. Lastly, comment on whether you were able to stay on course with the budget or ended up with an unexpected cash surplus/shortfall.

Note: As you may not feel comfortable providing too many personal details regarding you finances, feel free to make up numbers or situations.

2. Read the example story below.

Example: After landing my first real job after college, I was able to buy my first house. To help with the costs of carrying a mortgage, I took on a roommate. I prepared a cash budget analyzing my expected cash inflows (paycheque and rent from the roommate) and outflows (mostly housing, vehicle, food, and leisure costs). My average cash inflows from work and rent wasapproximately $4,600 per month. My average cash outflows, per month, were approximately as follows:

Mortgage Payment: $1,400

Utilities: $ 400

Property Taxes: $ 200

Other Household: $ 100

Vehicle Expenses: $ 500

Food: $1,000

Entertainment: $ 500

Other: $ 200

TOTAL $4,300

Other than the roommate, I lived alone and didn't need to worry about costs for other family members. This left with me a comfortable $300 surplus of cash per month ($4,600 - $4,300). For the most part, I was able to stick to this budget (so I didn't have any surprise surpluses or shortfalls). By keeping a budget surplus, I was able to set aside money each month to help with the down payment for a new car (one of the main reasons I prepared the budget in the first place). After savings a few thousand, I used the savings to upgrade to a new vehicle. By having a down payment, I was able to buy the car I wanted since I didn't need to finance as much of the purchase. The new monthly car payments were manageable because I planned for them and could work them into my future budgets.

3. Review the discussion rubric prior to submitting.