Scenario 1
Nate is a junior in high school. He works 15 hours a week at the mall, and his net income after taxes is $600 a month. He lives with his parents, so he doesn’t have rent, utility or food expenses. His older brother owns a car and lets him borrow it to drive to work for $50 each month; otherwise Nate takes the bus. He really wants to buy a car, so he puts any leftover money toward savings. Nate also pays for his cell phone and personal expenses, such as going to the movies, buying video games and purchasing gifts.
Below is Nate’s estimated budget and what he actually spent in one month’s time. Analyze Nate’s spending to determine why he is not on track to save for that new car, and what changes he can make to get on track.
Net Income: $600/month
Fixed Expenses Budget Goals Actual Budget
Savings for a Car $100 $0
Cell Phone $75 $100
Car Payment to His Brother $50 $100
Variable Expenses
Public Transportation $50 $60
Entertainment $50 $65
Personal Shopping $50 $175
Occasional Spending (gifts, repairs, etc.) $25 $100
Total $400 $600
Nate seems to not be on track to save for his new car because of his excessive personal shopping and his occasional spending. If he were to cut back on some of his other expenses as well, he would get enough money to get back on track to save for a new car.
Scenario 2
Maria just graduated from college and accepted her first job as a social media manager for a real estate company. She can’t believe that her monthly net income will be $3,000. She just moved into a one-bedroom apartment, so she is responsible for rent, utilities, food and other household expenses. She is paying off a student loan and she wants to save as much money as she can to buy a house someday. She owns a car and enjoys going out with friends on the weekend.
Below is Maria’s estimated budget and what she actually spent in one month’s time. Analyze her spending to see why she is not on track to meet her goal and to determine what she can do to get back on track.
Net Income: $3000/month
Fixed Expenses Budget Goals Actual Budget
Savings for House $450 $150
Rent $600 $600
Car Payment $350 $350
Car Insurance $150 $150
Internet/Cable TV $110 $110
Cell Phone $75 $105
Student Loan $300 $300
Variable Expenses
Gas $100 $175
Food $250 $300
Entertainment $100 $250
Personal Shopping $75 $300
Utilities $200 $275
Occasional Spending (gifts, repairs, etc.) $150 $250
Total $2,910 $3,315
Maria is mostly off track because she tends to spend more money on what she would probably feel is more important. If she were to prioritize better, she could get back on track.
Scenario 3
Jamal is a senior in high school and works 30 hours per week at a neighborhood coffee shop. His net income after taxes is $1,500 and he is saving up for college. He owns a car and makes payments toward it each month, but he lives with his parents so he saves on rent, utilities and food costs. He occasionally goes out with friends and buys things for himself, but he tries to hold back on these things so he can save more for college next year.
Below is Jamal’s estimated budget and what he actually spent in one month’s time. Analyze his spending to see why he is not on track to meet his goal and determine what he can do to get back on track.
Net Income: $1500/month
Fixed Expenses Budget Goals Actual Budget
College Savings $870 $820
Car Payment $125 $125
Car Insurance $95 $95
Cell Phone $85 $85
Variable Expenses
Gas $100 $105
Entertainment $50 $75
Personal Shopping $50 $95
Occasional Spending (gifts, repairs, etc.) $100 $100
Total $1,475 $1,500
Jamal isn’t on track with his goals because he seems to spend more on his variable expenses rather than his fixed expenses. If he were to focus more on spending less money, he could get himself back on track.
You just accepted your first job and you’ll be earning a gross income of $30,000/year. You live on your own and are responsible for all expenses, including rent, car, insurance, cell phone, utilities, entertainment, food, savings and miscellaneous expenses. You have to pay 25% of your gross income in taxes.
Calculate Your Take Home Pay:
With a gross income of $30,000 and a 25% tax deduction, what is your monthly net income? (Remember this is what you get after taxes.) Use this number to start your budget.
Categorize Expenses:
Determine if your expenses are fixed or variable, and write them in the appropriate sections of the table below. Remember your expenses include: rent, car, car insurance, cell phone, utilities, entertainment, food, savings and occasional expenses.
Name: Tiffany Gering
Net Income: $1,875/month
Fixed Expenses Cost
Rent $562.50
Utilities $187.50
Car insurance $93.75
Cell phone $93.75
Variable Expenses
Occasional Spending $187.50
Savings $187.50
Food $281.25
Car Loan $187.50
Entertainment $93.75
Total $1,875
Divide Your Expenses:
Determine the cost for each category and record the prices in your budget. Use the following percentages to divide your monthly net pay:
Rent: 30% of net pay
Utilities: 10% of net pay
Car Insurance: 5% of net pay
Cell Phone: 5% of net pay
Occasional Spending: 10% of net pay
Savings: 10% of net pay
Food: 15% of net pay
Car Loan: 10% of net pay
Entertainment: 5% of net pay
Assess Your Budget:
Compare your expenses to your monthly income. Have you spent everything you've earned? Do you have money left over for savings? What expenses could you lower to increase your savings?
My expenses added up to exactly my monthly income, unless my savings mean that I actually saved something. In that case, I would have saved $187.50. If I were to spend less on certain things, I could increase my savings. However, if I were to spend more, my savings could decrease.
Nate is a junior in high school. He works 15 hours a week at the mall, and his net income after taxes is $600 a month. He lives with his parents, so he doesn’t have rent, utility or food expenses. His older brother owns a car and lets him borrow it to drive to work for $50 each month; otherwise Nate takes the bus. He really wants to buy a car, so he puts any leftover money toward savings. Nate also pays for his cell phone and personal expenses, such as going to the movies, buying video games and purchasing gifts.
Below is Nate’s estimated budget and what he actually spent in one month’s time. Analyze Nate’s spending to determine why he is not on track to save for that new car, and what changes he can make to get on track.
Net Income: $600/month
Fixed Expenses Budget Goals Actual Budget
Savings for a Car $100 $0
Cell Phone $75 $100
Car Payment to His Brother $50 $100
Variable Expenses
Public Transportation $50 $60
Entertainment $50 $65
Personal Shopping $50 $175
Occasional Spending (gifts, repairs, etc.) $25 $100
Total $400 $600
Nate seems to not be on track to save for his new car because of his excessive personal shopping and his occasional spending. If he were to cut back on some of his other expenses as well, he would get enough money to get back on track to save for a new car.
Scenario 2
Maria just graduated from college and accepted her first job as a social media manager for a real estate company. She can’t believe that her monthly net income will be $3,000. She just moved into a one-bedroom apartment, so she is responsible for rent, utilities, food and other household expenses. She is paying off a student loan and she wants to save as much money as she can to buy a house someday. She owns a car and enjoys going out with friends on the weekend.
Below is Maria’s estimated budget and what she actually spent in one month’s time. Analyze her spending to see why she is not on track to meet her goal and to determine what she can do to get back on track.
Net Income: $3000/month
Fixed Expenses Budget Goals Actual Budget
Savings for House $450 $150
Rent $600 $600
Car Payment $350 $350
Car Insurance $150 $150
Internet/Cable TV $110 $110
Cell Phone $75 $105
Student Loan $300 $300
Variable Expenses
Gas $100 $175
Food $250 $300
Entertainment $100 $250
Personal Shopping $75 $300
Utilities $200 $275
Occasional Spending (gifts, repairs, etc.) $150 $250
Total $2,910 $3,315
Maria is mostly off track because she tends to spend more money on what she would probably feel is more important. If she were to prioritize better, she could get back on track.
Scenario 3
Jamal is a senior in high school and works 30 hours per week at a neighborhood coffee shop. His net income after taxes is $1,500 and he is saving up for college. He owns a car and makes payments toward it each month, but he lives with his parents so he saves on rent, utilities and food costs. He occasionally goes out with friends and buys things for himself, but he tries to hold back on these things so he can save more for college next year.
Below is Jamal’s estimated budget and what he actually spent in one month’s time. Analyze his spending to see why he is not on track to meet his goal and determine what he can do to get back on track.
Net Income: $1500/month
Fixed Expenses Budget Goals Actual Budget
College Savings $870 $820
Car Payment $125 $125
Car Insurance $95 $95
Cell Phone $85 $85
Variable Expenses
Gas $100 $105
Entertainment $50 $75
Personal Shopping $50 $95
Occasional Spending (gifts, repairs, etc.) $100 $100
Total $1,475 $1,500
Jamal isn’t on track with his goals because he seems to spend more on his variable expenses rather than his fixed expenses. If he were to focus more on spending less money, he could get himself back on track.
You just accepted your first job and you’ll be earning a gross income of $30,000/year. You live on your own and are responsible for all expenses, including rent, car, insurance, cell phone, utilities, entertainment, food, savings and miscellaneous expenses. You have to pay 25% of your gross income in taxes.
Calculate Your Take Home Pay:
With a gross income of $30,000 and a 25% tax deduction, what is your monthly net income? (Remember this is what you get after taxes.) Use this number to start your budget.
Categorize Expenses:
Determine if your expenses are fixed or variable, and write them in the appropriate sections of the table below. Remember your expenses include: rent, car, car insurance, cell phone, utilities, entertainment, food, savings and occasional expenses.
Name: Tiffany Gering
Net Income: $1,875/month
Fixed Expenses Cost
Rent $562.50
Utilities $187.50
Car insurance $93.75
Cell phone $93.75
Variable Expenses
Occasional Spending $187.50
Savings $187.50
Food $281.25
Car Loan $187.50
Entertainment $93.75
Total $1,875
Divide Your Expenses:
Determine the cost for each category and record the prices in your budget. Use the following percentages to divide your monthly net pay:
Rent: 30% of net pay
Utilities: 10% of net pay
Car Insurance: 5% of net pay
Cell Phone: 5% of net pay
Occasional Spending: 10% of net pay
Savings: 10% of net pay
Food: 15% of net pay
Car Loan: 10% of net pay
Entertainment: 5% of net pay
Assess Your Budget:
Compare your expenses to your monthly income. Have you spent everything you've earned? Do you have money left over for savings? What expenses could you lower to increase your savings?
My expenses added up to exactly my monthly income, unless my savings mean that I actually saved something. In that case, I would have saved $187.50. If I were to spend less on certain things, I could increase my savings. However, if I were to spend more, my savings could decrease.