Objectives:Describe needs and wantsApply a decision making process to make personal financial choicesUnderstand terms on personal cash flow statements and net worth statements Prepare a personal budget, planning for projected income and expensesExplain and draft a financial plan

AGENDA:WarmupIntroduce budget projectComplete Study guideQuiz Next Class!Final Thoughts

Slide 1

Warmup:Grab a computer and your warmup book.In your warmup book,

1.Write the budget equation2.List one example of variable expense an one fixed expense

THE BUDGET EQUATION:Income = Savings +

Expenses

Slide 2

◦ Part 1: You will use Excel to Make a Monthly Budget based on Income you expect to be making in about 10 years from now. (sample on my website)

◦ Part 2: You will use PowerPoint to go along with the budget to make a presentation of your researched monthly expenses: Cell Phone TV/Internet Car Home

Slide 3

What do things really cost?◦Find a cell phone plan

Pick a phone, add to cart, then go through individual plans.

Write in your choice and monthly cost: _________________________________

◦Find TV and Internet Service Could be a bundle or separate. Write in your choice and monthly cost: ___________________________________

Slide 4

Slide 5

1. Find your car on any website and write price:

Car:_____________Total price:_____________Then, using cars.com

◦Go to the Finance tab◦Select the Monthly Payment calculator

Info needed:◦Your car sales price◦You will put $1500 down payment◦ Interest: Choose national average (about 4%)◦Term: Choose 36, 48 or 60 months

Monthly car payment: ______________

Slide 6

Annual Income:______________ Monthly Income: _____________

2. Start a new Spreadsheet in Excel OR use my Sample Budget template on my website

Set up the Rows as on My Sample Budget on my website

3. In your Excel Personal Budget spreadsheetAdd in your researched decisions:

Monthly incomeMonthly car paymentMonthly cell phone payment Monthly TV/Internet payment.

4. Save as “Personal Budget” in the “Fin Lit” folder you created on your server

To find out how much home you can afford based on your projected income:

◦ Google: Zillow.com mortgage affordability calculator

◦ Use the following given information:Down payment $10,000Monthly Debt $200 Interest Rate: 5%

MAXIMUM HOUSE PRICE__$___________________________ MONTHLY PAYMENT (see green bar below house

price)___$____________________________(this includes taxes and insurance)

Use Maximum house price to look for a house Use Monthy Payment to plug into your budget for

mortgage.

Slide 7

Gather information about your home for your Powerpoint presentation that contains some of the things you want in your home…

◦ City and State◦ Cost of house and what it looks like◦ Number of bedrooms/bathrooms◦ Yard? Pool?◦ Use Pictures!◦ Why you picked this house and location

Slide 8

Make a Powerpoint presentation of 4-6 slides. Save as “Budget Project” in your Fin Lit folder in your server.

Slides should show: Your researched buying decisions:

(Include Occupation and Salary,Cell Phone, TV/Internet, Car, Home)

Why you picked these and/or special features of each

Total cost per month for each. Use pictures and designs!

Slide 9

Electric $125 Gas (Home) $75 Gas (Car) $160 Food $300 Water/Sewer $75 Car Insurance (Guys)$150 Car Insurance (Girls) $100 Student Loans $200

Slide 10

Be sure you have some income allocated to savings. (suggested 10%)

Be sure you included all expenses on previous slide in your expenses.

Adjust your variable expenses as needed to stay within your budget.

If not enough income to cover expenses, you can choose lower priced car or home, or get a second job to earn more income.

If more income than expenses – put more in savings!

NOW YOU KNOW WHAT THINGS COST and amount of income you need to earn to cover them

Remember the Budget Equation:

Income = Savings + Expenses!

Slide 11

Print PPT in Handout form with 4 slides to a page (see me if questions – DO NOT print as slides)

Print Budget (Excel)

Attach Blue Rubric to top of Budget and PPT and turn in.

Be sure your name is on all parts!

Slide 12