Living the Dream Project

Economics 2012

Mr. Van Heusen & Mr. Himmelwright

Task:

Students will develop a monthly budget based on a Capital Region “job” and accompanying salary. “Jobs” will be given a specific location and from this information the student will decide and calculate their monthly expenses. All students are starting with a savings account with a $5,000 balance. In addition to a salary you have been given a monthly college loan amount (next to the salary) which needs to be figured into your expenses.

Due Date: Thursday November 1

Requirements:

1. Calculate disposable income and wealth - determine your approximate after tax income (both federal and state). Once you have your net income, break it down into a monthly figure. In addition, calculate the value of your stock portfolio.

2. Find housing - this needs to be specific. Locate an actual home for sale or an apartment for rent in the area. Calculate mortgage payment (including taxes) or rent.

3. Purchase a car – this also needs to be specific. Find a new or used car and calculate the payments.

4. Calculate transportation expenses – based upon where you live and work. Must include an additional 150 miles per week in miscellaneous travel.

5. Create a budget for living expenses – this should include food, utilities (including cable and internet), cell phone, entertainment.

6. Calculate insurance expenses – this includes car, home (renter’s), medical, and life.

7. Calculate level of savings and investment – detail what type of accounts and the costs associated. Describe what type of investments you would make and your long term philosophy. Include any philanthropy in this section.

8. Future income – assume a generous 5% raise for next year. Detail the areas where and how your spending would change.

Note: ALL of the information you find needs to be cited! If your information is taken from a newspaper article then you should cut/print it out. This is not an option. You will lose points if your info cannot be verified.

Manager Trainee
Ben & Jerry’s (Saratoga)
$30,000 / $150
150 shares Coca-Cola (KO) / Landscape Foreman
Kulak’s (Rexford)
$35,000 / $100
75 shares Caterpillar / (first year)Lawyer
Balzer & Leary (Albany)
$70,000 / $250
275 shares Boeing
Teaching Assistant
Shenedehowa High School
$35,000 / $150
200 shares GE / Dairy Farmer
King Bros. Dairy (Schuylerville)
$45,000 / $150
200 shares Proctor & Gamble / Pharmacist
Walgreen’s (Amsterdam)
$70,000 / $250
300 shares 3M Corp.
Assistant Manager
Target (Glenville)
$40, 000 / $150
250 shares of AT&T / Phys Ed Teacher
O’Rourke MS (Burnt Hills)
$55, 000 / $200
175 shares Walt Disney / Civil Engineer
Clough Harbor Assoc (Albany)
$75,000 / $250
350 shares Boeing
Account Specialist
SunMark FCU (Albany)
$45,000 / $150
1000 shares Bank of America / Physical Therapist
Repsher and Assoc. (Albany)
$60,000 / $200
500 shares Merck / Nurse Practitioner
Glens Falls Hospital (Glens Falls)
$75,000 / $250
550 shares United Health Care
Auto Technician
Mohawk Honda (Glenville)
$45,000 / $150
700 shares Ford / Course Superintendent
Fairways of Halfmoon (Mechanicville)
$60,000 / $200
250 shares Johnson & Johnson / Construction Manager
Windsor Co. (Clifton park)
$80,000 / $250
550 shares Home Depot
Waiter/Waitress
The Barnsider (Colonie)
$40,000 / $150
125 shares McDonald’s / Police Officer
Schenectady PD
$60,000 / $200
450 shares Home Depot / Chemical Engineer
Knolls Atomic
$90,000 / $250
500 shares American Express
Co-Owner Deli
Positano (Latham)
$50,000 / $150
125 shares Walt Disney / Director of Fundraising
Siena College (Loudonville)
$60,000 / $200
2000 shares Hewlett Packard / News Anchor
WTEN (Albany)
$100,000 / $250
250 shares Exxon Mobil
Delivery
UPS (Albany)
$50,000 / $150
125 shares Walt Disney
at today’s closing price / Accountant
Slocum & D’Angelis (Colonie)
$65,000 / $200
300 shares American Express
at today’s closing price / Architect
Balzer & Tuck (Saratoga)
$100,000 / $250
400 shares Proctor & Gamble
at today’s closing price
Claim’s Agent
State Farm (Malta)
$50,000 / $150
350 shares Traveler’s Co.
at today’s closing price / Air National Guard Pilot
Glenville
$65,000 / none
275 shares Boeing
at today’s closing price / V.P. Real Estate/Engineering
Golub Corp. (Schenectady)
$125,000 / $250
500 shares Wal-Mart
at today’s closing price
Financial Analyst
Ayco (Saratoga Springs)
$50,000 / $150
250 shares American Express
at today’s closing price / Systems Analyst
MVP (Schenectady)
$65,000 / $200
1000 shares Cisco
at today’s closing price / Superintendent of Schools
Galway CSD
$125,000 / $250
175 shares IBM
at today’s closing price

Health Insurance: Choose one of the options below and give a rational explanation for your decision.

Option 1 – Basic Medical coverage. No Dental or Eye coverage. $20 co-pay. $125 month. Budget must account for at least 6 visits a year.
Option 2 – Standard Medical coverage with Eye coverage. No Dental. $10 co-pay. $175 month. Budget must account for at least 9 visits a year.
Option 3 – Premium Medical Coverage with Eye and Dental. $5 co-pay. $225 month. Must account for at least 12 visits per year.

Life Insurance: Determine your level of coverage based on your assets and liabilities.

Term Life Insurance - $10/month for every $10,000 of coverage.

Homeowner’s / Renter’s Insurance: Determine your level of coverage based on your assets and liabilities.

Value of Home / Premium (Yearly Cost)
$50,000 - $150,000 / $400
$150,001 - $250,000 / $500
$250,001 - $350,000 / $600
$350,001 – $450,000 / $700
$450,001 - $1,000,000 / $1000
Rent ** (per person) / Premium (Yearly Cost)
< $250 / $90
$251-$350 / $120
$351-$450 / $180
$451 - $650 / $240
$651 - $850 / $300
> $851 / $360

** Renter’s insurance is based on the value of possessions plus liability coverage. In our example it is based on the value of your rent.

Car Insurance: Talk to your parents and use your current insurance rates. If you don’t have a car, then use the figure of a friend. You’re older and more responsible now so….

Males – deduct 5% from your current rate.

Females – deduct %10 from your current rate

Name:______

Job:______Salary:______College loan:______/month

1. Calculate disposable income and wealth - determine your approximate after tax income (both federal and state). Once you have your net income, break it down into a monthly figure. Keep the value of your stock portfolio separate.

2. Find housing - this needs to be specific. Locate an actual home for sale or an apartment for rent in the area. Calculate mortgage payment (including taxes) or rent.

3. Purchase a car – this also needs to be specific. Find a new or used car and calculate the payments.

4. Calculate transportation expenses – based upon where you live and work. Must include an additional 150 miles per week in miscellaneous travel.

5. Create a budget for living expenses – this should include food, utilities (including cable and internet), cell phone, and entertainment.

6. Calculate insurance expenses – this includes car, home (or renter’s), medical, and life (whole or term).

7. Calculate level of savings and investment – detail what type of accounts and the costs associated. Describe what type of investments you would make and your long term philosophy.

8. Future income – assume a generous 5% raise for next year. Detail the areas where and how your spending would change.

9. Bibliography