“WHERE DID ALL MY MONEY GO?”
A Middle Grades Financial Planning Project
You finally made it!!! You’ve just graduated from OMU (Oh My! University) and it’s time to enter the REAL world. Mom and dad say it’s time for you to pull up your boot straps and grab the bull by the horns. I guess now you have to take on your own responsibilities. No more late night parties, no more cruising the strand, and no more staying up until dawn watching your favorite revenge of the zombies reruns! It’s just you and the whole world at your disposal.
Well, it’s time to make a plan. After using this Web Quest, you will be better prepared for the events of tomorrow. You will establish yourself by choosing a career, looking for a place to live, and budgeting your money to cover all of your necessary expenses. Hopefully, you will have a better idea of what lies ahead of you. So, let’s get started. Good luck and happy planning!
Phase 1: getting started
Choosing a career
Do you have an idea what you would like to do for a career? Research the newspaper, internet (see paycheck calculation page (5) for web site), or ask friends and family to help determine what job would be most appropriate for you. When you decide, enter your occupation here and on the pay check calculation page.
In the space provided below, draw a small picture of you performing your job or something that reminds you of the job you have chosen (e.g. for a veterinarian, draw a dog; for a banker, draw a bank or money, etc.)
Determine your salary
Using resources available to you, identify the annual salary of your position for the area in which you live. Also list the requirements and prospects of getting a job in your area. The local NC Employment security commission may be helpful in determining the average salary for your area. The web site on the Pay Check Calculation page (5) list many jobs in the United States along with other information. Note this information in the appropriate place on the Pay Check Calculation page (5).
Financial Planning Rubric
Students will receive a score of 1, 2, or 3 for each section completed. A total of 54 points is possible. A description of the scores are as follows:
Score of 3: the student performed above average work. Thoughtful decisions were made about what was supposed to be done. The work was completed and through. Calculations were correct and all entries were correctly placed in the provided slots. Work was neat and organized.
Score of 2: the student performed average work. All work was completed or almost finished. Calculations were at least 80% correct. 80% of all entries were correctly placed and work was readable.
Score of 1: The student performed below average work. Much of the work was incomplete. Calculations were less than 80% correct. Less than 80% of all entries were correctly placed. Work was not neat or organized.
Section 1 Career Information
Score
Career Choice _______
Average Salary _______
Education Required _______
Future Outlook _______
Documentation of above information _______
Section 2 Paycheck calculation
Gross Monthly Salary Calculation _______
Deduction Calculations _______
Monthly Net pay calculations _______
Monthly Net pay _______
Section 3 Monthly Budget
House Calculation TVM solver _______
Vehicle Calculation TVM solver _______
Monthly living expense estimates _______
Parent signature _______
Section 4 Graphical Budget Analysis
Score
Pie chart for paycheck deductions and balance
(Percent of monthly Gross pay) _______
Bar graph of monthly expenses
(Percent of monthly net pay) _______
Section 5 Reflections and presentation
Typed reflection of changes _______
Neatness, organization and use of class time _______
Section 6 Applications worksheet
Case studies _______
Completion of application problems _______
Pay Check Calculations
This form will be used to determine information about your monthly income which will also be used for graphs on the following pages
Name__________________________Career_____________________
Education Required__________________________________________
Prospects for employment_____________________________________
The following web site can be used to find information about your career choice and the education requirements and salary. Other sources may be used but must be noted on this form.
Web site www.bls.gov/search/ooh.asp?ct=OOH
The following entries will be used to determine the amount of monthly income minus expenses to figure net monthly pay. Percentages will also be figured to be used for graphing later.
Income:
Average Annual starting salary__________________________________
Monthly earnings (annual salary ÷ 12) ______________
Gross Pay (salary before taxes) ______________
Expenses: (amounts may be found on monthly chart page – 9)
Type of expenditure %of gross pay ($)Amount of deduction
fed. Income tax ____________ ____________________
state income tax ____________ ____________________
social security(FICA) ____________ ____________________
health insurance ____________ ____________________
retirement ____________ ____________________
investments ____________ ____________________
union dues ____________ ____________________
charities ____________ ____________________
other deductions ____________ ____________________
Gross monthly pay ___________________
Total deductions ___________________
Net monthly pay ___________________
Monthly Budget
Housing calculations: students will calculate simple interest, total amount paid and monthly payment. Using the formulas:
I = PRT;
Total amount loan = interest + principal;
Monthly payment = total amount ÷ number of months.
Vehicle calculations: use same formulas as above.
Monthly living expense estimates: use attached monthly living expenditures worksheet to gather information. Percentages must be calculated for these amounts also to use in the bar graph exercise.
**SHOW ALL WORK**
Calculate the interest that will be paid over the term (15 yrs or 30 yrs) of the mortgage, total amount paid back over the term of the mortgage
(amount of the principal + total interest), and what your monthly payment(total amount paid back ÷ number of months) will be on the house. If you decide to rent, you will not have to calculate the mortgage but use the monthly rent amount in your budget.
Calculate the interest that will be paid over the term (4, 5, 0r 6 yrs) of vehicle loan, total amount (interest + principal) paid over the term of the loan and what your monthly payment will be on your car using the simple interest formulas.
Monthly Budget (worksheet)
House price________________Vehicle price__________________
House calculations:
15 yr financing 30 yr financing
Interest rate 5.2% 6.8%
Total Interest paid ____________ ____________
Total paid back ____________ ____________
Monthly payment ____________ ____________
Vehicle calculations:
4yr loan 5 yr loan 6 yr loan
Interest rate 4.4% 5.3% 6.1%
Total interest paid _______ ________ ________
Total paid back _______ ________ ________
Monthly payment _______ ________ ________
Additional monthly expenditures:
($) %
· Rent/house payment __________ _______
· Vehicle payment __________ _______
· Electric bill __________ _______
· Water/sewer bill __________ _______
· Trash bill __________ _______
· Phone bill __________ _______
· Internet bill __________ _______
· Cable TV bill __________ _______
· Gas bill (LP or auto) __________ _______
· Food/Grocery __________ _______
· Credit card payment __________ _______
· Vehicle insurance __________ _______
· House/renter’s insurance __________ _______
· Subscriptions (book, clubs, etc.) __________ _______
· Consumables (cleaning supplies, etc.) __________ _______
· Other __________ _______
Totals:
*Gross monthly pay __________________
*Total monthly expenditures __________________
*Monthly net pay __________________
*Disposable monthly income __________________
Definitions:
*Gross monthly pay: total annual salary ÷ 12 months
*Net monthly pay: Total from Pay Check Calculations Sheet
*Monthly Expenditures: Total from monthly expenses chart
*Disposable monthly income: Net pay – monthly expenditures
Parent/guardian Signature Required
Parent signature__________________________________________________
To determine Pie chart data:
1. Determine salary range block for the salary from the handout table (pg9)
2. Determine pie chart degrees for each item by % item • 360°
3. The sum of all categories should not exceed 360°. Why might this be?
4. Example: Salary $34,000(from table at tax rate of 15%) • 360° = 54°
5. Place center point of protractor on center of pie chart, mark 0° point at edge of circle, mark 54° point at edge of circle. Draw a line from pie chart center point to 0° point at edge and draw a line from center to 54° mark. This is the beginning of your pie chart.
6. Repeat for all the remaining percentages and draw on the pie chart.
To determine Bar graph of monthly paycheck deductions:
1. Determine % each deduction is of the total amount of deductions (pg 7)
2. Draw graph with type of deduction placed in x-axis and percentages on y-axis.
3. Use different colors to label each deduction. If you are proficient with a computer, you may use a spreadsheet to graph you amounts.
4. Label all parts of each graph appropriately and neatly.
Chart of Monthly Expenses
Salary fed income state income F.I.C.A. med. Ins.
Range tax tax tax rate
$0- 10% 6% 6.6% 2.4%
$15,000
$15,000- 15% 6.5% 6.85% 2.6%
$36,000
$36,001- 25% 7% 7.05% 3.1%
$76,000
$76,000- 28% 7.75% 7.35% 3.7%
$151,000
More than 33% 8.25% 7.65% 4.2%
$151,000
Construct a bar graph showing your monthly paycheck deductions. Use gross pay less any deductions to figure your amounts and use colors to differentiate each deductions.
Financial planning Project
Case Studies
Directions: Solve one case study. Show all work including the equation with all given values submitted in correctly. Round all answers to the nearest hundredth.
Case Study 1
Your boss has just finished your sixth year review and is offering you a new position with greater responsibility. With the responsibility comes an increase in your salary. The raise is 6%. Calculate your new salary based on the 6% raise and take out all the deductions as you did before. How much more money will you see in your net pay every month? Every year?
Case Study 2
Your old vehicle has seen its’ better days. Last month you had to replace the transmission. How the engine has started to leak oil very badly. You have decided to purchase a new vehicle. The purchase price of you new vehicle is $23,000 and you need to finance it through the local credit union at 3.5% for four-years, 3.9% for 5-years or 4.2% for 6-years. Which ever you choose, how much more money will your car payment go up. Refigure you monthly budget using the new amounts.
Case Study 3
You have had a terrible reaction to the artificial chemicals used in the preservation of processed foods. Your doctor has advised that you can only eat organic foods. Your food budget will increase 300%. How will this affect other budget items and your total monthly budget?
Case Study 4
Best Buy was having a special on large screen plasma HDTV’s. You charged one of their largest and best models on your credit card. The total purchase was $3,499 plus 6.5% sales tax. How much interest will you be paying per month if you just make the minimum payment? How much should you budget per month to pay it off in 6, 12, or 18 months? Can you afford this purchase?
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