spartan dollar$ and ents · 2018-08-10 · spartan dollar$ and ¢ents purpose this budgeting...

Spartan Dollar$ and ¢ents

by

Christy Hicks and Erica Tobe


Acknowledgements Authors Christy Hicks Former Extension educator Oakland County 4-H Youth Development Erica Tobe Former program leader Michigan 4-H Youth Development Priscilla Martin Editor Michigan 4-H Youth Development Reviewers Constance Costner, program leader, Michigan State University Extension Brooke Crandall, student, Michigan State University Barbara Duvall, Extension educator, Michigan State University Extension Laurie Rivetto, Extension educator, Michigan State University Extension Sienna Suszek, Extension educator, Michigan State University Extension Cover Image jannoon028 / FreeDigitalPhotos.net "Spartan Dollar$ and ¢ents" is adapted with permission from the Careers Unlimited Notebook (4H1261), East Lansing: Michigan State University Extension, 4-H Youth Development. (1993). Copyright 2011 by the Michigan State University Board of Trustees. These materials may be copied for use by 4-H programs and other nonprofit educational groups. For information, contact Michigan 4-H Youth Development, 160 Agriculture Hall, East Lansing MI 48824-1039, http://4h.msue.msu.edu.

MSU is an affirmative-action, equal-opportunity employer. Michigan State University Extension programs and materials are open to all without regard to

race, color, national origin, gender, gender identity, religion, age, height, weight, disability, political beliefs, sexual orientation, marital status, family status or veteran status. Issued in furtherance of MSU Extension work, acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Thomas G. Coon, Director, MSU Extension, East Lansing, MI 48824. This information is for educational purposes only. Reference to commercial products or trade names does not imply endorsement by MSU Extension or bias against those not mentioned. The name “4-H” and the emblem consisting of a four-leaf clover with stem and the “H” on each leaflet are protected under Title 18 U.S.C. 707.


Purpose This budgeting simulation teaches participants how to prepare a usable budget and reinforces the value of creating one to track monthly income and expenses. Participants will: • Create a usable budget for a simulated month • See the importance of – and make choices for– a budget • Use classified ads to explore housing and transportation options • Experience unexpected events that affect a personal or family budget Materials Needed • Lifestyle Questionnaire, one per participant • Play money (optional) • Action cards • Classified ads (from your local paper) • Calculators • Career/income cards • Pencils, one per participant • Budget sheets

Age of Participants This activity works well with middle- and high-school youth. This activity can also be used with upper-elementary youth with assistance from multiple volunteers. Time 45-60 minutes depending on the size of the group and the participants’ ages

Preparation • Copy and prepare career/income cards with accompanying budget sheet, one per

participant.

• Optional: Copy and prepare play money. Divide it into stacks of gross monthly income for each career/income card, one per participant.

• Copy and prepare action cards, one or two per participant.

• Copy and prepare Lifestyle Questionnaire, one per participant.

• Copy and prepare a set of classified ads, one packet per participant.

• Optional: Recruit additional volunteers/instructors to serve as cashiers for the simulation.

Directions • Give each participant one card that identifies his or her career and annual income.

Tell participants they must stay within their given career’s income when creating their budgets. Additionally, each card informs the participant of his or her health insurance and employer-sponsored retirement status.

• Optional: Give each participant his or her monthly gross income in play money. Money can be divided up before the activity begins by the instructor.

• Have participants complete the top portion of their budget sheets to account for their tax obligations. Have them visit the cashier to pay their payroll taxes (including federal and state taxes, FICA and social security). Discuss with participants the difference between gross and net income. (Gross income is an individual’s income before paying tax obligations; net income is the money left in the budget after paying taxes.) Participants will be left with their net income monthly salary to use for their budget.

• Distribute the Lifestyle Questionnaire to each participant. The questionnaire assists participants in exploring their community’s cost-of-living expenses.

• Explain to participants that on the questionnaire they should list the city or town in

which they live based on the house or apartment they choose from the local newspaper. On each career/income card, there is a notation of how far the participant has to travel to his/her job. This should be used to calculate the cost for gasoline.

• Review each Lifestyle Questionnaire category with the participants before they

complete the questionnaire. Pay special attention to life insurance and renter’s insurance. Life insurance covers loss of a deceased person’s income and/or household services. It can provide financial assistance to cover funeral arrangements for the deceased as well. Renter’s insurance is a type of home insurance that protects against damage and losses that occur in an apartment or a rented residence. This insurance also protects belongings and helps pay for any accidents that may occur to other people while they are in another individual’s apartment or rented home.

• Tell participants to complete each item on the questionnaire. If any of the

questionnaire’s options do not reflect the participant’s current situation, the participant can record an expense option in the available blank space.

• When participants get to the housing and automobile sections of the questionnaire,

they will be required to use the classified section of their local newspaper. For the housing section, the youth can choose housing by type, location and roommate options. If a roommate is chosen, instruct participants to divide housing costs (rent/mortgage, utilities and cable) in half. The facilitator may need to discuss the descriptions often found in classified ads such as square footage, utilities included, the definition of a half bath, etc.

• Remind participants to make realistic expense entries.

• After the participant completes EACH section of the questionnaire, he or she should

tally the monthly expense amount and record his or her monthly expenses on the budget work sheet. Optional (if using play money): Once the participant has completed the budget work sheet, he or she can pay the cashier for the month’s total expenses.

• Midway through the exercise, give each participant an action card. Action cards are

examples of unanticipated life occurrences. These unexpected situations may be positive or negative. When unexpected situations occur, it often has an impact on a person’s budget. Tell each young person to account for the unexpected occurrence on his or her budget sheet.

• Once the questionnaire activity is completed, tell participants to tally their income and

expenses. If participants have fewer expenses than income, offer congratulations while encouraging them to review their budgets. Are the expenses realistic? Did they tally all necessary expenses for living on their own? Remind participants to make sure they budget money for optional expenditures such as entertainment, holidays or special occasions such as birthdays, etc. Encourage them to consider increasing their monthly contribution to their savings accounts.

• For those who recorded greater expenses than income, tell each participant to review

their expenses. Which of those expenses are easiest to reduce? Which expenses are fixed? If participants are having a tough time reducing expenses, pose this question: “Are there other asset areas you could tap that might help reduce specific expenses?” For example, exchanging or bartering some services with a good friend may help reduce the out-of-pocket expenses for that service. (See the Discussion/Wrap-up for additional questions.)

Discussion/Wrap-up Upon completion of the activity, facilitate a discussion with all of the participants with questions such as: 1. How do you feel about the budget you created? What aspects of the budget will be

hard for you to live with, and what areas were easy choices? 2. Which expenses cost more than you expected? 3. What were some of the things you discovered about your spending habits? Can you

think of ways you could save money? (Some examples: take in a roommate, buy food in bulk with a friend or roommate, buy clothing from a resale shop, make – rather than purchase – gifts for friends, read your favorite magazine at the local library, etc.). What else?

4. How did it feel when you received an action card? Is this a reality in life? 5. Think about recent events where a family experienced a disaster. What if that had

happened to you? Does that make you reconsider your decision about insurance, either renter’s or health insurance?

6. Why is it valuable to prepare a monthly budget? Note that more than half of all millionaires actually prepare one! When you have a job and income, will you do it? Why or why not?

Lifestyle Questionnaire

My name is: _________________________ My annual gross income is: My monthly gross income is: ______________ My monthly tax obligation is: I work as a: ___________________________ I live in this county/city: I work this many miles from home: _________ Directions: Imagine you are out of school and supporting yourself completely. Read through this list of common monthly expenses. For each category, place a checkmark in the box that best describes the lifestyle you envision for yourself. After you have completed each category, record your expenses for that section on the budget sheet. Optional: Once you have finished this activity and have listed your expenses on your budget sheet, pay the cashier your total expenses for the month. Good luck! Food □ I cook all my meals at home ........................................................................ $200.00 □ I eat dinner in restaurants on Friday and Saturday nights ............................ $300.00 □ I eat all my meals in restaurants ................................................................... $700.00 □ Other…………………………………………………………………………………..______ Housing □ I rent a house to live in (see classified ads for price)……………………………$______ □ I rent an apartment to live in (see classified ads for price) …………………….$______ □ I have a roommate (if yes, divide your rent cost in half) ……………………….$______ □ Other………………………………………………………………………………….______ . Utilities (heat, water and electricity) □ I live in a house ............................................................................................... $ 90.00 □ I live in an apartment ...................................................................................... $ 65.00 □ I have a roommate (if yes, divide your utility cost in half) ………………………$_____ □ Other…………………………………………………………………………………..______ Telephone □ I have a cellular telephone .............................................................................. $ 80.00 □ I have a smartphone or cell phone with Internet access and an average price for this…………………………………………………………………………………$120.00 □ Other…………………………………………………………………………………..______

Cable/Satellite Television □ I have basic cable/satellite/Internet service ..................................................... $ 55.00 □ I have basic cable/satellite/Internet service with premium channels (HBO, Showtime, Cinemax) ………………………………………………………………..$ 80.00 □ I have a roommate (if yes, divide your cable television cost in half) ......... ….. $ □ Other…………………………………………………………………………………..______ Car Payment □ I’m buying a brand new car this year, payments will be ............................... $350.00 □ I’m leasing a brand new car this year, payments will be ............................... $275.00 □ I’m buying a brand new truck this year, payments will be ............................. $450.00 □ I’m leasing a brand new truck this year, payments will be ............................ $375.00 □ I’m buying a used car, payments will be ....................................................... $150.00 □ I’m buying a used truck, payments will be .................................................... $200.00 □ I looked in the classified ads, and I’m buying a __________________. My payments will be $ _________ (divide by 12 to determine monthly cost)…....$_____ □ Other…………………………………………………………………………………..______ Car Maintenance □ Oil change, air filter, windshield wiper fluid, antifreeze, tire rotation………….. $ 20.00 □ Other…………………………………………………………………………………..______ Car Insurance □ Insurance for a new car (leased or purchased with a loan) ........................... $200.00 □ Insurance for a 5-year-old car ........................................................................ $100.00 □ Insurance for a new truck (leased or purchased with a loan) ........................ $225.00 □ Insurance for a 5-year-old truck ..................................................................... $125.00 □ Other………………………………………………………………………………….______ Gasoline

□ I work less than 5 miles from home and fill up my gas tank once per month ………………………………………………………………………………………. $ 80.00

□ I work between 5 and 25 miles from home and fill up my gas tank twice per month …………………………………………………………………………….....$160.00

□ I work more than 25 miles from home and fill up my gas tank three times per month………………………………………………………………………….. $240.00

□ I use public transportation, which costs monthly ………………………………$ 50.00 □ Other………………………………………………………………………………….______ Clothing

□ I work in a professional office and wear business attire every day ................. $300.00 (Many of these clothes must be dry-cleaned.) □ My workplace provides free uniforms (buy clothes only for days off)…………$ 75.00 □ I work in a casual environment (wear same clothes for work and days off)….$100.00

□ Other………………………………………………………………………………….______

Personal Care (choose more than one if desired)

□ I buy basic shampoo, conditioner, soap, toothpaste, etc. .............................. $ 20.00 □ I buy makeup and more expensive personal care items ……………………… $ 40.00 □ I have my hair cut once a month .................................................................... $ 30.00 □ I have my hair styled once a month ............................................................... $ 40.00 □ I have my nails done twice a month ............................................................... $ 50.00 □ Other…………………………………………………………………………………..______ Medical Expenses □ I take a prescription medication on a regular basis ................................... …. $ □ Other…………………………………………………………………………………..______ Health Insurance □ My employer pays partial health insurance benefits…………………………….$ 50.00 □ My employer does not provide benefits, but I want health insurance…………$250.00 □ Other…………………………………………………………………………………..______ Life Insurance □ I don’t think I need life insurance .................................................................... $ 0.00 □ I have a $100,000 life insurance policy; monthly cost ..................................... $15.00 □ Other……………………………………………………………………………………_____ Renter’s Insurance □ I don’t think I need renter’s insurance ............................................................. $ 0.00 □ Renter’s insurance ........................................................................................... $25.00 □ I have a roommate, so I pay half the cost ........................................................ $12.50 □ Other……………………………………………………………………………………_____ Savings □ I put this amount in my savings account each month …………………………....$ □ Other……………………………………………………………………………………_____ Retirement □ I have a retirement package through my employer .......................................... .$150.00

(Many employers match this amount!) □ I have no employer-sponsored retirement package, so each month I set aside…………………………………………………………………………………....$ □ Other……………………………………………………………………………………_____

Gifts □ I purchase birthday gifts each year for this many people: _____ On average, I spend this much for each birthday gift I buy: $_____ (Multiply “number of gifts” by “amount spent” and divide by 12)……………......$ □ I purchase holiday gifts for this many people: _____ On average, I spend this much for each holiday gift I buy: $_____ (Multiply “number of gifts” by “amount spent” and divide by 12)……………......$ □ Other…………………………………………………………………………………...______ Entertainment □ I go to the movies _______times per month @ $8.00 each time ............. …. $

Sporting events…………………………………………………………………….. $ _____ Video rentals……………………………………………………………………….. $ _____ Video games ……………………………………………………………….……… $ _____ Concert tickets …………………………………………………………………….. $ _____ CDs (music) ………………………………………………………………….……. $ _____ Amusement park admissions ……………………………………………………. $ _____

□ Other………………………………………………………………………………….______ Vacation/Travel □ I’d like my next vacation to be a trip to ________________________. So, each month, I set aside this amount for my next vacation/travel …..…………$_____ □ Other………………………………………………………………………………….______ Donations □ I give this amount to my place of worship each month ............................ … $ □ I support this charity ___________ by donating this amount each month….. $ □ Other………………………………………………………………………………….______ Subscriptions and Memberships □ I subscribe to this magazine: . It costs ........ …. $ □ I belong to a fitness gym, with a monthly membership fee of ………………….$ 50.00 □ I belong to this club or organization: _____________. Monthly dues are .... .. $ □ Other………………………………………………………………………………….______

Your annual income is $17,000. You have no health insurance

coverage and no employer-sponsored retirement package.

You are employed as a

CASHIER and drive 10 miles to work.

Your annual income is $25,000. You have partial health insurance

coverage and a retirement package through your employer.


CORRECTIONS OFFICER and drive 20 miles to work.




SECURITY GUARD and drive 35 miles to work.


coverage and no employer- sponsored retirement package.


NANNY and drive 15 miles to work.



You are employed as a WAITER/WAITRESS

and drive 3 miles to work.



You are employed as a FLIGHT ATTENDANT




You are employed as a DENTAL ASSISTANT





HOUSEKEEPER and drive 4 miles to work.


coverage but no employer-sponsored retirement package.


RECEPTIONIST and drive 10 miles to work.




LEGAL ASSISTANT and drive 25 miles to work.



You are employed as a nonunionized

DELIVERY DRIVER and drive 12 miles to work.




TRAVEL AGENT and drive 20 miles to work.



You are employed as a DANCE INSTRUCTOR




You are employed as a HOSPITAL ORDERLY




You are employed as a nonunionized

CONSTRUCTION WORKER and drive 13 miles to work.


coverage and no employer-sponsored retirement package.


COSMETOLOGIST and drive 10 miles to work.

ACTION CARD

ACTION CARD

ACTION CARD

ACTION CARD

ACTION CARD

ACTION CARD

ACTION CARD

ACTION CARD

You overspent on your debit card. As a result, you are charged an overdraft fee.

PAY $25.

You prepare your best friend’s income tax forms for her. She

insists on paying you.

COLLECT $35. ☺

You volunteer to return the empty cans after the company

picnic.

COLLECT $10. ☺

You win a free CD from your favorite radio station.

COLLECT $25.

☺

You are named “Employee of the Month”

at work.

COLLECT a $100 award. ☺

You find a 10-dollar bill on the ground in the mall parking lot.

COLLECT $10.

☺

Your landlord gives you a rent rebate because you painted the

living room and bedroom in your rental.

COLLECT $50

☺

Your employer pays you a bonus for training a new

employee.

COLLECT $50 ☺

ACTION CARD

ACTION CARD

ACTION CARD

ACTION CARD

ACTION CARD

ACTION CARD

ACTION CARD

ACTION CARD

The muffler falls off your car.

PAY $120 to replace it.

Your parking meter expires during a lunch meeting and you

get a ticket.

PAY $30.

You get a speeding ticket on your way to work.

PAY $125.

Your apartment is flooded when you are at work. All of your

belongings in the kitchen are damaged.

Pay $250 unless you have

renter’s insurance.

A friend in Chicago invites you to visit for the weekend.

PAY $100 for gas to drive there,

OR PAY $200 to fly there.

You get a nasty cold.

PAY $20 for cough syrup, a thermometer and Kleenex®.

Your grandfather’s birthday is this month. Every family

member is expected to chip in for his gift.

PAY $10.

Your cousin’s 5-year-old son spills grape juice on your sofa.

PAY $60 to have the sofa professionally cleaned.

Spartan Dollar$ and ¢ents Budget ‐ $15,000

Gross annual income: $15,000 Gross monthly income: $15,000/12 months: $1,250.00 Tax obligation (federal and state taxes, social security, FICA): - $ 412.50 Net monthly income: $ 837.50

Income First time Revision Net monthly income $837.50 837.50 Action card income

Total net monthly income

Expenses First time Revision Food

Rent

Utilities

Telephone

Cable/satellite television/Internet Car payment

Car maintenance

Car insurance

Gasoline

Clothing

Personal care

Medical expenses

Health insurance

Life insurance

Renter’s insurance

Savings

Retirement

Gifts

Entertainment

Vacation

Donations

Subscriptions/memberships

Subtotal of expenses

Action card expense

Total expenses


Gross annual income: $17,000 Gross monthly income: $17,000/12 months: $1,467.67 Tax obligation (federal and state taxes, social security, FICA): - $ 467.50 Net monthly income: $ 1,000.17

Income First time Revision Net monthly income $1000.17 1000.17 Action card income



Rent

Utilities

Telephone


Car maintenance

Car insurance

Gasoline

Clothing

Personal care

Medical expenses

Health insurance

Life insurance


Savings

Retirement

Gifts

Entertainment

Vacation

Donations



Action card expense

Total expenses

Spartan Dollar$ and ¢ents Budget ‐ $20,000 Gross annual income: $20,000 Gross monthly income: $20,000/12 months: $1,666.67 Tax obligation (federal and state taxes, social security, FICA): - $ 550.00 Net monthly income: $ 1,116.67

Income First time Revision Net monthly income $1,116.67 $1,116.67 Action card income



Rent

Utilities

Telephone


Car maintenance

Car insurance

Gasoline

Clothing

Personal care

Medical expenses

Health insurance

Life insurance


Savings

Retirement

Gifts

Entertainment

Vacation

Donations



Action card expense

Total expenses


Gross annual income: $25,000 Gross monthly income: $25,000/12 months: $2,083.33 Tax obligation (federal and state taxes, social security, FICA): - $ 687.50 Net monthly income: $ 1,395.83

Income First time Revision Net monthly income $1,395.83 $1,395.83 Action card income


Expenses First time Revision

Food

Rent

Utilities

Telephone


Car maintenance

Car insurance

Gasoline

Clothing

Personal care

Medical expenses

Health insurance

Life insurance


Savings

Retirement

Gifts

Entertainment

Vacation

Donations



Action card expense

Total expenses

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spartan dollar$ and ents · 2018-08-10 · spartan dollar$ and ¢ents purpose this budgeting...

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