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    Financial Literacy-Student Guide

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    trent123456789

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    © All Rights Reserved
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    Financial Literacy-Student Guide

    Uploaded by

    trent123456789
    343 views6 pages

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    Financial Literacy-Student Guide.docx

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    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
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    Download as docx, pdf, or txt
    343 views6 pages

    Financial Literacy-Student Guide

    Uploaded by

    trent123456789

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 6
    At a glance
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    The key takeaways from the passage are that creating a family budget is important for financial planning and involves calculating income, managing expenses, and saving for the future. A financial planner advises examining factors like income, taxes, savings, and expenses when creating a budget.

    The financial planner advises examining important aspects that affect a budget such as income, taxes, savings, and expenses.

    Fixed expenses are expenses that do not change from month to month like housing costs and insurance, while variable expenses like food and entertainment can fluctuate.

    Financial Literacy

    Student Guide

    Financial Literacy
    Today’s guest speaker is a financial planner. He is here to clarify the purpose of creating a family budget,
    and to reinforce the importance of saving for your future.
    In this task, you will create a budget that includes calculating your income as well as managing your
    overall expenses.

    Directions
    Complete each task, reading the directions carefully as you go. Be sure to show all work where indicated,
    including inserting images of graphs. Be sure that all graphs or screenshots include appropriate
    information such as titles, labeled axes, etc. If your word processing program has an equation editor, you
    can insert your equations. Otherwise, print this activity sheet and write your answers by hand.
    Type all of your work into this document so you can submit it to your teacher for a grade. Show all your
    work and answer each question as you complete the task, as this is what your grade is based on. Partial
    credit will be given according to the completeness and accuracy of your explanations.
    Your teacher will give you further directions as to how you are to submit your work. You may be asked to
    upload the document, e-mail it to your teacher, or hand in a hard copy.
    Now, let’s get started!

    Copyright © Edgenuity Inc.


    Student Guide (continued)

    Step 1: Analyzing Components of a Budget


    Before a detailed family budget can be created, your financial planner has advised you to examine the
    important aspects that affect a budget such as income, taxes, savings, and expenses. Work through the
    following questions to start thinking about these aspects of budgeting.

    a) As a student, you are able to earn extra money by assisting your neighbors with odd jobs. If you
    charged $10.25 an hour for your assistance, about how many hours would you need to work to
    earn $8,425? Show your work. (5 points)

    b) Imagine that you earned $8,425 in one year. If the government enforces a 15% income tax, how
    much money would you owe in taxes at the end of the year? Show your work. (5 points)

    c) Your parents have been advised to save 5% of their income for your college education, which
    would include money for housing, tuition, books, and fees. How much would your parents have
    saved in one year, following the recommended 5%, if they had an average household income of
    $48,948? Show your work. (5 points)

    d) As a smart consumer, you are always on the lookout for sales, coupons, and rebates. While
    shopping for new clothes, you notice that one particular brand of shirts is on sale for 20% off the
    original price. You also have a coupon for $10 off a $40 purchase. Coupons are applied after the
    20% discount is taken. If each shirt originally costs $17.99, how many shirts would you need to
    buy to be able to use your coupon? Show your work. (15 points)

    e) What would be the total cost of purchasing the number of shirts needed to use your coupon—
    after your coupon is applied and a 7.5% sales tax is charged on the purchase? (15 points)

    Copyright © Edgenuity Inc.


    Student Guide (continued)

    Step 2: Calculating Monthly Expenses


    The second step to building a family budget is to outline your expenses in greater detail, itemizing fixed
    and variable expenses.

    Suppose the table below shows your family’s monthly expenses by category.

    Fixed or Average Percent of


    Expense Variable Monthly Yearly Cost Yearly Budget
    Expense? Cost (Rounded)
    $4,800
    Fixed $400 $4,800 = 9.8%
    Income Tax $48,900

    $950
    Housing
    $7,800
    Food
    Variable $75
    Clothing
    Fixed $6,000
    Transportation
    $1,200
    Insurance & Medical
    $100 $1,200
    Entertainment

    Fixed $50
    Emergency Fund

    Fixed $600
    Savings for College
    $100 $1,200
    Savings for Retirement
    Total $4,075 $48,900 100%

    a) Fixed expenses are expenses that do not change from month to month, and variable expenses
    are expenses that can fluctuate from month to month. Complete the second column of the chart
    by determining if each expense is fixed or variable. (10 points – 2 points each)

    b) Choose an example of a fixed expense and an example of a variable expense, and explain why
    they are classified that way. (4 points)

    Copyright © Edgenuity Inc.


    Student Guide (continued)

    c) Complete the remaining columns in the chart by calculating the missing values for each category.
    Round your percentages to the nearest tenth of a percent. (16 points)

    Copyright © Edgenuity Inc.


    Student Guide (continued)

    Step 3: Creating a Balanced Family Budget


    a) Using an online family budget estimator, calculate the monthly expenses for a family living in your
    city. Below are a few calculators you could choose from.

    http://www.familybudgets.org/

    http://www.epi.org/resources/budget/

    http://www.nccp.org/tools/frs/budget.php

    Insert a screenshot of the calculator you used, as well as all of the information you entered into it.
    If you are unable to insert a screenshot, then list the information below. (10 points)

    b) State the minimum monthly income and hourly wage per worker needed to cover monthly
    expenses for the family you used in part a. Then, explain how to calculate the hourly wage based
    on the monthly income and state the hourly wage. Assume that each full-time worker works four
    40-hour work weeks per month, and each part-time worker works two 40-hour weeks per month.
    (10 points)

    Copyright © Edgenuity Inc.


    Student Guide (continued)

    c) Keeping all other criteria the same, add a child to the family you used in part a to determine the
    monthly expenses. How does an additional child impact the family budget and hourly wage?
    Which category was least affected by this change? Explain why you think there was little impact
    to this category. (5 points)

    Copyright © Edgenuity Inc.

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