Accounting and Finance Foundations

(Chris Devlin) #1

Unit 12


Accounting and Finance Foundations Unit 12: Budgeting and Business Plans 921

Budgeting and Business Plans Student Guide


27.4.3 Budget Exercise —High-School Graduate


Full-time Employee—40 hours per week

Income:
Gross Salary: $20,800 ($10/hour)
Net Salary (after taxes & health benefits): $16,000

Monthly Expenses:


  1. Rent for one-bedroom apartment: $425

  2. Phone: $45

  3. Natural gas: $20

  4. Electric: $20

  5. Internet access $19

  6. Car payment: $257 (Honda Civic; cost = $13,000; loan = 5 years @ 7% interest)

  7. Car insurance: $55

  8. Bank credit card: $75 (Balance = $1,900: interest = 15%; estimated time to pay off debt = 31 months—
    paying minimum payment with no further charges)

  9. Gasoline: $25

  10. Personal/Clothing: $30

  11. Hair cuts, magazines, etc.: $40

  12. Clothing store credit card: $40 (Balance = $800: interest = 21%; estimated time to pay off debt = 25
    months—paying minimum payment with no further charges)

  13. Groceries: $125

  14. Eating out: $15

  15. Recreation & entertainment: $100

  16. Cable: $45

  17. Savings: $0
    (Pay yourself first!)


Chapter 27

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