Description
1. Once you complete the budgets using the link provided you then should address these 2 areas for each student:
Was the budget you created for the student (1 & 2) a zero-based budget? Why or why not?
If the budget was not zero-based what suggestions would you have for the student(s) to make their budget actually be zero-based
Please note that the instructions on the assignment itself say to print out the budgets and provide them to your instructor. I do not want to see the budgets but I do expect you to use them in order to address whether or not the budgets are zero-based and if not why and how would you fix them to make them zero-based.
2.using the debt snowball link to answer the questions below
If only the minimum payments are made, what is the Debt-Free Date?On the website, the Debt-Free Date is in the upper right corner.
If only the minimum payments are made, how much is going toward debt monthly?
How much money is left over for living expenses per month?Assume this person makes a gross income of $40,000 and pays 20% for taxes.
What is the percentage of debt compared to income? Is this sustainable over time? Why or why not?Divide the total monthly debt payment by the monthly income
What are some ways you can get out of debt faster?
Unformatted Attachment Preview
CHAPTER
3 Debt Snowball Calculator
Activity:
Name_______________________________________
Date_____________________________
Objective
The purpose of this activity is to design a plan to reduce debt using the debt
snowball.
Directions
Go to www.foundationsU.com and select the Debt Snowball tool. Create a plan to pay off the debt in the least
amount of time possible. The tool will automatically organize the order of payments for you.
Debt
Interest Rate
Current Balance
Minimum Payment
MasterCard
19.9%
$600
$22
Visa
23.95%
$2,545
$60
Car
4.8%
$16,800
$465
Student Loan
6.8%
$18,400
$220
Electronics Store Card
22.65%
$1,015
$29
Loan from Dad
0%
$3,000
$20
Knee Surgery
6.2%
$5,000
$100
Once the debts are entered, print the Debt Snowball and answer these questions:
1
If only the minimum payments are made, what is the Debt-Free Date?
On the website, the Debt-Free Date is in the upper right corner.
2
If only the minimum payments are made, how much is going toward debt monthly?
3
How much money is left over for living expenses per month?
Assume this person makes a gross income of $40,000 and pays 20% for taxes.
4
What is the percentage of debt compared to income? Is this sustainable over time? Why or why not?
Divide the total monthly debt payment by the monthly income.
5
What are some ways you can get out of debt faster?
FOUNDATIONS IN PERSONAL FINANCE COLLEGE EDITION
CHAPTER 3: DEBT
CHAPTER
2 Student Budgets (1/2)
Activity:
Name_______________________________________
Date_____________________________
Objective
The purpose of this activity is to construct three zero-based budgets based on
case studies.
Directions
Use the Budgeting tool at www.foundationsU.com to create three zero-based budgets; two for the two student case
studies below and one based on your own situation (which will not be handed in). Fill in all income and expenses
on the form with the information provided. Print each budget for your instructor.
Helpful Tips:
›› The budget tool automatically suggests amounts for each category based on Dave’s recommended percentages.
You will need to zero out each category and plug in new numbers.
›› Round to the nearest dollar to keep things simple.
›› Compute the net pay of income (by taking 20% out for taxes).
›› If there is money left over after you account for the expenses, decide where that money should go. The budget is
balanced when every dollar is assigned to a category (when income minus expenses equals zero).
›› If there is not enough money for expenses, redistribute the amounts in the categories until the balance is zero.
Student Budget #1:
Marcus works at the lumber yard and makes $11.50 an hour. With his academic and sports schedule, he is able to
work 20 hours a week. Marcus lives at home, so he has very few bills, one of which is a cell phone that costs $85
a month. He is responsible for car insurance, which is $1,100 a year, and he has to pay for gas, maintenance and
repairs ($150 a month). His parents also provide him with meals at home, but he likes to eat out with his friends at
least two times a week ($8 each meal). He has health insurance under his parent’s plan. Later this year, he wants
to buy a 50-inch flat screen television for $2,000, so he has been saving $167 every month.
Student Budget #2:
Cassie works at the grocery store and earns $12 an hour. She is busy with extracurricular activities and works 20
hours during the week. However, she picks up an eight-hour Sunday shift four times a month, for which she earns
time and a half. Cassie lives with one roommate and they split rent, which is $900. They also divide their utilities in
half, and Cassie pays $150. Fortunately, she has health insurance under her mom’s plan. However, she is expected
to pay $130 for her own car repairs, maintenance and gas, as well as auto insurance, which is $840 a year. She also
spends $40 a week for groceries and $15 for eating out each week. Cassie also puts 10% of her take home pay in
her savings account and gives 10% of her take home pay to the local food pantry.
FOUNDATIONS IN PERSONAL FINANCE COLLEGE EDITION
CHAPTER 2: BUDGETS
CHAPTER
2 Student Budgets (2/2)
Activity:
Student Budget #3:
Construct a budget based on your own living situation. This will not be handed in, unless your instructor specifically asks for it.
FOUNDATIONS IN PERSONAL FINANCE COLLEGE EDITION
CHAPTER 2: BUDGETS
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