The objective of this project is help you prepare for life after high

school. You will set up a budget that would allow you to live the lifestyle you would like in the future. Along the way, you will learn more about buying cars and houses, down payments, credit, loans and mortgages, expenses, children, and taxes--as well as yourself.Step 1 Congratulations! You are older and married!

We will talk more about this later. Step 2 Choose a Career

What are your career plans? This is a very important question considering that if you work an 8-hour day every week from the age of 22 to 62, you will spend 400,000 hours at work. Consider how long those hours will be if you are miserable because you don't like what you are doing. That is just one reason why it is very important to make sure you carefully choose a career.

If you are going to make a good career decision, it is extremely important that you know yourself. You must consider your interests, values, skills, and personality preferences to make a well-informed decision.

Considering your interests will help you identify opportunities to pursue and the topics you are most naturally drawn to. Consequently, school and work will be more motivating and enjoyable. That is very important!

Values motivate us and impact many of our decisions, behaviors and goals. Values greatly influence the career decision making process, job satisfaction and, ultimately, how satisfied we are with our life.

Your skills are the things that you are good at. Assessing your skills allows you to determine which ones you want to acquire or further develop, and how your skills match with potential careers.

Project inspired by: Carmel High School Project

Family Budget Project

Personality preferences are related to your individual nature and are typically consistent over time. Understanding personality and interpersonal needs allows you to see correlations between the way you make decisions and your work style.

1. Do some research online and choose a career you are seriously interested in pursuing. When you make a career choice, evaluate it against your interests, values, skills, and personality preferences to determine if it is a good match for you.

Step 3 Children—Your Little Money GuzzlersYes, they are money guzzlers, but that’s why God made them so cute--to help make up for all the troubles they bring! And they really do bring you all the love and joy in the world. So, how many children do you have? While this method is not recommended in real life, for this project, the number will be determined by a roll of the dice. 1. You will roll one die to figure out how many children you have.

The number you roll will determine the amount of kids you have. Don’t worry. The most children you can have is five, because if you roll a six, will be switched to five kids. Be careful! The odds of ending up with five children is around 25%!

2.Step 3 Ages of Your Offspring

Let’s find out how old your children are! 1. Roll two dice and add the numbers together. That is the age of

one of your children. Roll the two dice again and follow the same procedure. (Yes, it is possible to end up with twins and even triplets!)

2. While you didn’t have any say in the number of children nor their ages, you do get to choose their names and their sex.

Step 4 Getting HiredYou already chose an occupation, but where are you going to work? You can choose the city and state. The State Occupational Employment and Wage Estimates Website will make getting this information a breeze.

1. Click on the following URL: http://www.bls.gov/oes/current/oessrcst.htm

2. Click on the state you are going to live in.

3. Click on the Major Occupational Group that interests you, or scroll down to the job you like. Make sure you write down

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the “Occupational Code” (you will need the info later) and click on the job that you want.

4. At the top, read the job description to see if it is what you’d like to do.

5. Click on the link, “Industry Profile for this Occupation.”

6. Click on the link: “Create Customized Tables,” at the top.

7. Choose the “One occupation for multiple geographical areas” option

8. Find your job on the list. Use the occupational code to help find your job—aren’t you glad you wrote it down earlier? (The occupational codes are in in numerical order.) Click on it. Click continue.

9. Under geographical type, click “State.”

10. Select the state you plan on living in.

11. Click on the “Annual mean wage.” Click next.

12. Screen capture the information. It should look like this:

Does your spouse work outside of the home or stay home with the kids? If your spouse has a job, then find the Annual mean salary for their job and screen capture the image as well.

Step 5 TaxesWith all of those hungry mouths to feed at home, how much money you are actually going to take home each month can be an issue. Kids can cost a small fortune, but they can be real money savers at tax time.

1. Go to the following website: http://www.paycheckcity.com/calculator/netpay/us/arizona/calculator.html

2. Under the “State for withholding” drop down box, click on the

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state you are going to live in. 3. Take your “annual mean wage” and put that in the “Gross

Pay” (Gross pay is another term for total pay.)

4. Switch the “Pay Frequency” to monthly.

5. Switch the “Federal Filing Status” to Married.

6. Your “# of Federal Allowances” is the total of you plus your spouse plus the number of children you have. (You will find an advantage of having more children here.)

7. Switch the State “Filing status” to “Married”.

8. After you change the “state filing status” be sure that the state “Allowances” are the same as the federal allowances.

9. Ignore the “Voluntary Deduction Section.”

10. Click “Calculate.”

11. Take a screenshot of the “Your Paycheck Results” and the “Calculation Based On” results. (Your “Net Pay” is what your family will take home each month.)

12. If your spouse works, please repeat steps 1-11 for his/her

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job as well.

Step 6 Let’s Play Dream House! Home is where the heart is… Buying a house is possibly the most expensive purchase of your life. It is important to tackle this purchase with your eyes open. When the housing bubble burst during our last recession, it became clear that many lenders were handing out mortgages with their eyes closed. Consequently, many people lost a fortune when their house faced foreclosure. Back then, many banks tightened their lending practices. Buyers suddenly were required to have stellar credit ratings and have 20% of the price of the home as a down payment.

However, as the housing market heats back up again, some banks are loosening the reins and once again offering sweeter deals. For some wanna-be homeowners, the ability to buy is suddenly real again. But, just because a bank thinks you can afford a multimillion-dollar house doesn’t mean it’s a wise financial choice. Before you sign on the dotted line, consider the stress level involved with making a high mortgage payment every month. The bank wants to make money on you, and they will set the bar as high as they want to risk—which may be more than you want to risk. Be proactive and carefully evaluate what you can pay to live within your means.

1. Find a place to live. Some places you can look are:http://www.trulia.com/http://www.century21.com/http://www.realtor.com/http://www.coldwellbanker.com/http://www.zillow.com/http://www.sothebysrealty.com/en/home.aspx

Note: Probably not in your budget, but interesting to check out.

2. When you have located your castle, take a screenshot that includes a picture of the house and the basic information including the MLS ID number and property taxes. (The MLS ID number is like a home social security number.) If you cannot find the property taxes for your house, use the MLS # to find the house on another real estate website.

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2. Calculating the Cost of the House Few people make an offer on a house at the selling price. You

are able to haggle the price of the house down 4%. (A $200,000 home would cost you $192,000)

$200,000 x .04 = 8,000$200,000 - $8,000 = $192,000

3. Fortunately, you have saved up enough money to put 10% down on the mortgage.

$192,000 x .10 = $19,200$192,000 - $19,200 = $172,800 = principal for your mortgage

loan (The principal is the amount you will need to borrow.) (Remember to show all of your calculations in your report.)

4. Luckily mortgage rates are currently reasonable. Because you paid attention in your economics class, you know the importance of a good credit score, and you have a fairly good one at 740. As a result of having a good credit score, you qualify for a 3.5% mortgage rate. The average mortgage lasts 30 years or 360 months.

5. Go to the following website: http://www.bretwhissel.net/cgi-bin/amortize

6. Put in the principal and change the interest rate accordingly. Leave the balloon payment and payment amount blank. Select, “Show Amortization Schedule”. Click calculate.

7. Please take a screenshot of the calculated summary.

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HELPFUL HINT: Some budget experts recommend that a house monthly payment should be no more than 28% of your gross monthly income. For this project, you must follow this 28% rule. You may have to find a cheaper house.

Example: If your monthly gross pay is $5,866.67, twenty-eight percent of that number is $1,642.67.

5,866.67 x .28 = 1,642.67 Your monthly mortgage payment must be less than 1,642.67.

8. If you have followed the 28% rule, enter the regular payment amount on your Excel spreadsheet. Also enter your property taxes. Remember, the amount listed on the real estate website is for the year. Consequently, you must divide your taxes by 12 months and enter that monthly amount on the Excel spreadsheet.

Step 7 Family Chariot: New or Used?You have some more decisions to make. Sedan or an SUV? Need a family-friendly model? Sports car? Sadly, you might have to be responsible and save the two-seat convertible for your empty-nest days, especially if you still need that car seat. Also, you need to decide if you a one-car or a two-car family. If you a purchasing a new car, follow the new car instructions. You’ll find the instructions for purchasing a used car below.

New Car Instructions:

1. If you know what kind of car you want, head

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right to their website. If you are getting a new car, be sure to figure out all of the different accessories you want to add. Take a screenshot of the ad and be sure it includes the MSRP.

2. Remember your cars need to fit your family’s needs (For example, if you have five kids, you may need to look into getting a mini-van!).

3. Once you find your car, you have to figure out what the cost is going to be. For new cars, they will provide you with the MSRP price; which stands for Manufacturer's Suggested Retail Price. That cost can be haggled (talked) down. In order to talk down the cost of your car, you have to do your homework.

4. Go to www.Edmunds.com

5. Click on the “Make” of the car that you found an advertisement for (at the top of the website).

6. Select the “Model” of the car that you found an advertisement

for.

7. Click on the “Year” of the car that you found an advertisement

for.

8. Click on the “Pricing” link.

9. Click on the “Build your own” button

10. Click on the same

features you choose when

you got your

advertisement.

11. Capture a screenshot of the “True Market Value”. This is “What others are paying” and is the amount you haggled the price down to with the dealer.

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Instructions for a Used Car:

1. Locate an ad for the used car you are interested in purchasing. Capture a screenshot of the ad, including the price. Since you are buying a used car, you want to “appraise” it on Edmunds so you are sure that the car is listed at a fair price.

2. Go to

www.edmunds.com.

3. Click on “Car Research”.

4. Click on “Trade-In Value and Pricing”.

5. Put in the information for your used car exactly as it appears on the advertisement.

6. Put in the correct style, options, for your advertised car and the mileage/condition.

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7. This will give you the “True Market Value” for your used car. Capture a screenshot of the pricing details.

8. Do you already have a car? If so, how much is it worth? (Note: If you are still paying it off, be sure to subtract the amount you still owe from the trade-in value.) Are you willing to trade it in or sell it, in order to have a lower cost on the car? Follow the same directions for “Used Car” to figure out how much to sell it for. You can trade it in, or sell it yourself (Private Party). If you sell it yourself you will have to describe in your paper how you will advertise your car and eventually sell it. Be sure to get a screenshot of the pricing report.

Step 8 Paying for your WheelsCan you afford to pay for your dream car(s)? For the sake of this project, you are able to put a $4,000 down payment on your car on top of any trade in/private sale you may have.

1. What is your monthly payment going to be? Go to http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx.

Important: You are NOT using this auto loan calculator. Go to the “Auto Loan Rates Averages Box” and click on “60 Month” in the “compare auto loan rates” box for either a new or used car (depending on what you are buying). Put in the zip code of your new home and make sure 60 month new or used is clicked (depending on the type of car

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you are buying). Fortunately, you have a great credit rating so you can use the lowest interest rate. Take a screenshot of the interest rates.

2. Look at the chart located at: http://www.taxadmin.org/fta/rate/sales.pdf and record the sales tax for the state you plan on living in. Please get a screenshot of the sales tax line for your state.

3. How expensive is this car going to be? Go to http://www.onlineloancalculator.org/. The “Loan Amount” is the “TMV what others are paying” price.

4. Enter the full price of the car, down payment ($4,000), Trade in Amount (If applicable), Interest Rate, Loan Term of 5 years, and sales tax for your state. Click calculate.

5. Get a screenshot of ”Your Loan Information”, “Loan Summary” and “Yearly Amortization Schedule”.

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6. Note: Does your spouse need a car? Repeat the process to buy your spouse’s car. Get a screen shot of the loan information, loan summary and yearly amortization schedule.

7. Enter the monthly payment in your Excel spread sheet. If you are buying more than one car, combine the monthly payments on the spreadsheet.

Step 9 Children: Precious but Pricey! Being a parent is going to cost you! A lot! There are many costs associated with having a child. Thankfully for you, for this project you only have to worry about determining the cost of day care, which is expensive enough as it is.

1. For each child aged four and under

Day Care Costs: (Based on 5 days per week, 8 hours per day).

Cost = $800/month ---for each child

2. For each child aged five and older

Babysitter (Based on 20 days/month) Cost = $5/hour for 3 hours a day – for each

child= $300/month – for each child

Note: You could have your spouse stay home and thereby avoid having to pay for child care. However, you forgo any salary from your spouse.

3. Use the Child of Raising a Child Calculator to determine how

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much your youngin(s’) will cost you this year. Get a screenshot of the information and add it to your report. You will not have to add this information to your spreadsheet.

Step 10 Tracking Expenses or Bills, Bills, Bills!The musical group, Destiny’s Child, tried to warn you. You will have more bills than car payments, house payments, and child care costs. What do you pay in utilities? Water? Gas? Electricity? Car insurance? Do you have an internet/phone/cable package? How much are you spending on food a month? It might not be a bad idea to start collecting coupons. How many times are you planning on dining out? That can get very expensive.

Ask your parents or guardians to give you some estimated costs of what they pay for certain bills each month. You will add these to your monthly budget Excel spreadsheet.

Homeowner’s Insurance Electricity Heating Oil Firewood/Pellets Water Garbage Cable Phone/Cell Phone Internet (sometimes cable/phone/Internet come in bundled

packages) Food Car Insurance for each car Gas Medical Expenses Child Care Pets??? Entertainment??? Savings? Emergency Fund? College Fund? Clothing

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Miscellaneous Shopping Donations Gifts Other expenditures not listed?

Make a list of the different providers you used for the different services (i.e. Verizon or AT&T, etc.)

Step 11 Getting a Grip on Your Spending

As you have worked on this project, you have been filling in the Excel spreadsheet with all of the data you have collected to figure out your monthly budget. Now it is time to evaluate it for accuracy.

1. Remember, if you have any annual (yearly) prices, divide the total by 12 to figure out the monthly cost.

2. You must have at least some money left for savings - if not you have to make some lifestyle changes (i.e. get a new house or car).

3. Watch out for cash leakage. Beware of luxuries dressed up as necessities. If your income does not cover your costs, then some of your spending is probably for luxuries - even if you've been considering them to be filling a real need.

4. You cannot live beyond your means and be “in the red.” If you are in the hole, you will have to go through your spending and figure out where you need to cut back.

5. Your goal should be to reduce your spending to about 90% of your income, so you can direct the rest of your money into the financial objectives you feel most important.

Last Step

Reporting Your Findings

1. Use the Family Budget Project Template to record screenshots of your research as your progress through the steps of the project. Keeping this information thorough and accurate will help you immensely when it is time to complete the Excel spreadsheet to determine if you are living within your budget.

2. Use your completed Family Budget Project template as a guide to complete the Excel budget spreadsheet.

3. Write a two-page (minimum) typed, double spaced, report that explains your choices, and explains your life.

In addition to the content, you will be graded on your ability to properly format your report as well as use proper grammar and spelling. In the last paragraphs, please include answers to

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the following questions:

1. What did you learn from this project? 2. What was the hardest decision that you had to make? 3. What motivated your decisions? 4. What surprised you most about planning your budget? 5. What decisions might you reconsider in the future?6. How much money did you have left at the end of the year? 7. What expenses has this project not taken into account? 8. What would you do with the extra savings you have?

Prove to me that this was well researched, well thought out and well done. Please also include a few sentences on what you have learned from this project. Evaluate your work against the scoring rubric to ensure

that you have all included of the required components.

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