In this activity, you will create a monthly budget based on income earned from a fictitious job versus estimated living expenses (including rent, transportation, food, and leisure time activities). If your expenses exceed your income, you will need to determine where to cut back your monthly expenses in order to "make ends meet." You will also encounter unexpected monthly expenses which will force you to adjust your monthly budget. Finally, you will write a report using Microsoft Word, evaluating the activity.
Step A
Create a Income worksheet using Excel
What To Do:
Open a Microsoft Excel worksheet and create a monthly Income template, following Example 1.
Be sure to include your monthly net income (your gross income minus taxes and other deductions). Job salaries typically refer to income before taxes. To determine how much money you will actually have to spend after taxes, if you make \300,000 per month, estimate National taxes at 5% and Local taxes at 1.5%. You should also have a Retirement Plan of 6.5%.
Step B
Prepare a Budget Worksheet using Excel
Be sure to include the following expense categories: rent, utilities, transportation, food, medical expenses, clothing, leisure activities, and miscellaneous.
In Cell B12, type the formula: =sum(B4:B11) or use Excel's AutoSum function to add up the cost of these expenses.
In Cell B15, put in your monthly net income, type: = and click the mouse on the net salary amount on the Income page
Now, in Cell B14, type: =B11.
And in Cell B15, insert a formula to calculate the difference between Income and Expenses, such as: =(B13-B14).
Step C
Estimate Expenses
What to do:
As your parents, friends, teachers, consult your local newspaper, real estate magazines or check on the internet to get an idea of how much it costs to rent a house or an apartment in an area you would like to live. Type in the monthly rent and the estimated cost of utilities (gas and electric) in your worksheet. Next, assume the cost of transportation (car payment, insurance, gas) to be ¥42,000. For the other items in your budget (other than food), estimate your monthly expense and type in that amount in the appropriate cell similar to the one in Example 1.
Step D
Create a Food Budget
What to do:
To determine your monthly food budget, open a Excel worksheet.. Design a Weekly Menu similar to the one in Example 1.
Now, figure out what you might pay to produce this menu.
Add the total cost of your weekly food budget. Multiply by four and one half weeks to get an estimate of your monthly food budget. Type this number into the food category of your monthly budget.
Step E
Evaluate Your Budget
What to do:
Once you have typed in all of your monthly expenses, your worksheet will show you whether or not you are "making ends meet." Do your expenses exceed your income? If so, you must decide where to cut back so that your expenses do not exceed your income.
You forget to pay our phone bill and your phone service is shut off. To turn it back on, the phone company wants ¥10,000. The lease on your apartment is up for renewal and the landlord wants a 5% increase. How much will your increase be? How will you adjust your budget to account for this increase?
Your dog gets sick and the medicine costs ¥2,000.
Now use Word to write a report explaining what you've learned from this activity. Include information copied from your Excel worksheet as illustration whenever possible. Include ways in which you might be able to stretch your budget (for example, take in a roommate to share the rent).