Car Buying Project
Budget
Part I – Make a Personal Budget (Rough Draft) – Due Thursday
Scenario -- You are 22 years old, and you have just landed your first job in a far western suburb of Chicago. You will be buying a car which will be used for the daily drive to your job (25 miles away). Your salary is $48,000, which is the average for a college graduate in 2019. $48,000 sounds like a lot of money, but along with the freedom and fun of being 22, there are also a lot of expenses. One of these is a $50,000 student loan you need to repay. Other obvious expenses are for rent, food, and a car. There are many others, though. Your task is to create a monthly budget ($4,000) that accounts for everything you will need to pay for each month.
You need to create a rough draft of a budget of your personal expenses. These are required things like food and shelter and the extra things you need to pay for on a daily, weekly, or monthly basis. Don’t forget to also set aside some money every month for savings. You need to have at least 8 different budget categories. And because the next part of your project involves buying a car, estimated amounts for car payments and any other monthly car expenses must also be part of your budget.
You will need to research online, and I encourage you to talk to your parents for guidance on how much your various budget items will cost. Caveat – This is just a rough draft. Some of these amounts will have to change once your monthly income goes down due to payroll deductions.
Part II – Make a Personal Budget and Include Payroll Deductions (Final Draft) -- Due Monday
We will be learning about payroll deductions in class. These are things that are taken out of your paycheck before you deposit it, so this money is gone even before you see it. It needs to be accounted for, though.
The final draft of your budget is due on Wednesday. It should include ALL of your payroll deductions (each listed separately) and personal expenses written out in a column or table format AND a circle graph. Since this is a monthly budget, all expenses should equal $4,000. (And don’t forget savings is part of a budget – after you add up all your deductions and expenses, the remaining money can be your savings.)
Once again, I encourage you to use your parents, the internet, and any other resources you may have to complete your budget. To do this correctly and earn a good grade, you will need to put in a lot of time and thought and make sure that you aren’t missing any important payroll deductions or personal expenses. I am available for guidance but not to give you any “answers”. Your personal budget is worth 50 points which is 1/3 of your entire project grade.
You will be graded on:
Completeness – have you included all necessary budget categories & monthly expenses?
Accuracy – are the amounts all reasonable?
Computation – is all math done correctly?
Graph – is your graph accurate and does it include dollar amounts and/or percents?
Appearance – is your entire project neat, well labeled, and easy to understand?
Part III – Buying a Car (Group Project)
We will be going to Evanston Subaru in Skokie to pick out a car to buy. After researching all of the hidden costs associated with buying a car and preparing for negotiations, you will be meeting with a car salesman to negotiate the purchase of the car you selected. More information to follow……
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Payroll Deductions Worksheet
Before you even get your first paycheck, your employer has already deducted several things from your “gross” (total) amount. The biggest chunk is your federal income tax which goes to the United States government. How much you owe is a progressive tax, which means the more you make, the higher percentage of your paycheck you need to give up. The other three taxes that will get deducted from your paycheck are fixed rates, which means that everyone pays the same percentage. You need to go thru the slideshow and tutorial below – which is also accessible on the Algebra II website – to help you answer the following questions.
https://www.aol.com/2013/04/25/biggest-things-your-income-taxes-pay-for/#slide=976885#fullscreen
1) Look at the pictures and captions and list 5 things that are funded by your federal income taxes:
http://apps.irs.gov/app/understandingTaxes/student/hows_mod01.jsp -- Go thru all 4 parts of Module 1
2) Go thru all 4 parts of Module 1 and list the 3 taxes that come out of your paycheck in addition to your federal income taxes. Two are in the tutorial & you will need to do some research online to find the 3rd.
Name Percentage
1) Federal Income Tax 11-12%
2)
3)
4)
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Payroll Deductions from $4,000 Monthly Income: Percent Amount
1) ____Federal Income Tax__________________ 11-12% ______________
2) ______________________________________ ________ ______________
3) _____________________________________ ________ ______________
4) ______________________________________ ________ ______________
5) ______________________________________** _______________
TOTAL _______________
** Not a tax, but there is one more thing that generally gets deducted from your monthly paycheck.
You will need to include this in your monthly budget. (Hint: It’s a type of insurance and you usually split the cost with your employer.)
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Car Buying Project–Group Presentation
Presentations will be made on Tuesday, November 5th and should include:
1) Introduction
2) Discussion of group budget* and graph
3) Discussion of car buying experience
a. Reasons for buying the specific car
b. Reasons for financing decision (i.e. length of loan)
c. Negotiating
d. If you made any mistakes, talk about them
4) List and discussion of all car buying expenses
5) Conclusion, including at least 3 things your group learned
The presentation should be 5-7 minutes in length. Each person will receive a score on his/her individual speech, and the group will receive a separate score on the quality of the presentation/slide show.
*Your group budget should have components from each of the group member’s individual budgets and should also correct any mistakes or omissions from the individual budgets.