1. Objectives:  Describe needs and wants  Apply a decision making process to make personal financial choices  Understand terms on personal cash flow statements and net worth statements  Prepare a personal budget, planning for projected income and expenses  Explain and draft a financial plan AGENDA:  Warmup  Introduce budget project  Complete Study guide  Quiz Next Class!  Final Thoughts Slide 1 Warmup: Grab a computer and your warmup book. In your warmup book, 1.Write the budget equation 2.List one example of variable expense an one fixed expense

2. THE BUDGET EQUATION: Income = Savings + Expenses Slide 2

3. ◦ Part 1: You will use Excel to Make a Monthly Budget based on Income you expect to be making in about 10 years from now. (sample on my website) ◦ Part 2: You will use PowerPoint to go along with the budget to make a presentation of your researched monthly expenses:  Cell Phone  TV/Internet  Car  Home Slide 3

4. What do things really cost? ◦ Find a cell phone plan  Pick a phone, add to cart, then go through individual plans.  Write in your choice and monthly cost:  _________________________________ ◦ Find TV and Internet Service  Could be a bundle or separate.  Write in your choice and monthly cost:  ___________________________________ Slide 4

5. Slide 5 Activity 2 – What is your monthly car payment? 1. Find your car on any website and write price: Car:_____________Total price:_____________  Then, using cars.com ◦ Go to the Finance tab ◦ Select the Monthly Payment calculator  Info needed: ◦ Your car sales price ◦ You will put $1500 down payment ◦ Interest: Choose national average (about 4%) ◦ Term: Choose 36, 48 or 60 months  Monthly car payment: ______________

6. Slide 6 Annual Income:______________ Monthly Income: _____________ 2. Start a new Spreadsheet in Excel OR use my Sample Budget template on my website  Set up the Rows as on My Sample Budget on my website 3. In your Excel Personal Budget spreadsheet Add in your researched decisions:  Monthly income  Monthly car payment  Monthly cell phone payment  Monthly TV/Internet payment. 4. Save as “Personal Budget” in the “Fin Lit” folder you created on your server

7.  To find out how much home you can afford based on your projected income: ◦ Google: Zillow.com mortgage affordability calculator ◦ Use the following given information:  Down payment$10,000  Monthly Debt$200  Interest Rate:5% MAXIMUM HOUSE PRICE__$___________________________  MONTHLY PAYMENT (see green bar below house price) ___$____________________________ (this includes taxes and insurance)  Use Maximum house price to look for a house  Use Monthy Payment to plug into your budget for mortgage. Slide 7

8.  Gather information about your home for your Powerpoint presentation that contains some of the things you want in your home…  ◦ City and State ◦ Cost of house and what it looks like ◦ Number of bedrooms/bathrooms ◦ Yard? Pool? ◦ Use Pictures! ◦ Why you picked this house and location Slide 8

9.  Make a Powerpoint presentation of 4-6 slides. Save as “Budget Project” in your Fin Lit folder in your server. Slides should show:  Your researched buying decisions: (Include Occupation and Salary, Cell Phone, TV/Internet, Car, Home)  Why you picked these and/or special features of each  Total cost per month for each.  Use pictures and designs! Slide 9

10.  Electric$125  Gas (Home)$75  Gas (Car)$160  Food$300  Water/Sewer$75  Car Insurance (Guys)$150  Car Insurance (Girls)$100  Student Loans$200 Slide 10

11.  Be sure you have some income allocated to savings. (suggested 10%)  Be sure you included all expenses on previous slide in your expenses.  Adjust your variable expenses as needed to stay within your budget.  If not enough income to cover expenses, you can choose lower priced car or home, or get a second job to earn more income.  If more income than expenses – put more in savings!  NOW YOU KNOW WHAT THINGS COST and amount of income you need to earn to cover them Remember the Budget Equation: Income = Savings + Expenses! Slide 11

12.  Print PPT in Handout form with 4 slides to a page (see me if questions – DO NOT print as slides)  Print Budget (Excel)  Attach Blue Rubric to top of Budget and PPT and turn in.  Be sure your name is on all parts! Slide 12