Economics Budget Project.doc

Economics Budget ProjectObjective: To identify and learn how to manage the financial aspects of life through a process of an economic simulation based on your real life.Instructions:Part I.Getting StartedStep 1: Choose a partner in class that will simulate a family. Step 2: What college or colleges did you both attend? How did you pay for college? Did you have to take out any loans? Step 3: Identify where you will be living. (What state will you settle down in?) This makes a difference on the cost of living expenses.Step 4: Identify what each of you will be doing for a career in 5 years. Provide a copy of job listings (related to your position) found in a newspaper or online that is in the location that you want to live. Step 5: In addition, list the job qualifications it will take for you to get the position. Apply for the jobs by preparing resumes that both of you would use for getting the job you have identified. Appendix AStep 6: List the obstacles you may have to overcome in order to get the position you want. Ex. Are there entry-level positions you have to except in order to work you way up? Do you fit the correct profile for the position? Is there any additional training you will need?Step 7: Research and provide the gross salary you will be making (under current salary schedules)for your current jobs.Step8: Calculate and provide your total household income. Part II. Balancing a Monthly Budget (at 5 years from now.)Step 1: Determine your net salary. To do this take your gross salary and subtract the following amounts to receive your net salary. - National Income Tax Appendix B- State Income TaxAppendix C- FICA (7%)- InsuranceAppendix D- RetirementAppendix EStep 2: Determine your fixed expenses.Step 3: Determine your variable expenses.Step 4: Determine your savings and investments. What money do you have left over for savings and investments? How will you save and or invest the money? Appendix FPart III. Increasing your Standard of Living (Decisions to be made during the next 5 years.)Step 1: Buying a Home- Research the type of home you would like to buy and can afford. Provide home listings with pictures of the home you will purchase.- Research and determine the type of home loan you will apply for. Appendix G- How does your credit affect the type of loan you can get?- How does the interest rate affect the loan and what you can afford?Step 2: Buying a Car- Research the type of car you would like to buy and can afford. Provide car listings with pictures of the car you will purchase.- Research and determine the type of car loan you will apply for. Appendix HStep 3: Having ChildrenYou will have at two children over the next 5 years. Make a list of things that you will have to pay for on account of having children. How much does each monthly item cost? (ex. Diapers, wipes, formula, childcare, etc.)Part IV. Balancing a Monthly Budget (at 10 years from now.)Step 1: Determine your net salary. To do this take your gross salary and subtract the following amounts to receive your net salary. - National Income Tax Appendix B- State Income TaxAppendix C- FICA (7%)- InsuranceAppendix D- RetirementAppendix EStep 2: Determine your fixed expenses.Step 3: Determine your variable expenses. (These usually increase with age.)Step 4: Determine your savings and investments. What money do you have left over for savings and investments? How will you save and or invest the money? Appendix F* Organize the project with the information in the same order as it is on this worksheet. Provide pictures, charts, graphs, etc. in a location near the information for each Part.Economics Budget ProjectWebsites for Research(Updated 11/29/06)Job Listings and Salaries The Atlanta Journal and Constitution Jobs: / M Jobs (Job Search): / M Jobs (Salary Search): / S (Salary Search): /home/layoutscripts/homl_display.aspResumes M Resume Guide: /archives/components/ M Resume Samples: /archives/samples/ Quintessential Careers Resume Samples and Guides: /resume_samples.htmlFederal Income Tax IRS website 2006 tax table: /pub/irs-pdf/i1040gi.pdf (page 67-79, 84) IRS website 2006 tax schedule: /formspubs/article/0,id=150856,00.htmlState Income Tax US Map of links to State Tax websites: /fta/link/forms.html Georgias 2004 Tax Table: /inctax/2008_forms/TSD_Individual_Income_Tax_Instruction_Booklet_IT511_2008.pdf (page 20)Health Insurance An article that describes the different plans: /Insurance101.htm Charts showing costs of plans: /eBulletin/2002/SeptemberSurveyAnalysis.asp Graph showing employee average costs: /insurance/7148/sections/ehbs04-1-11.cfmRetirement/Investments Government description of plans: /dol/topic/retirement/typesofplans.htm Comparison of plans: /planning/retirement/ira/comparison-chart.htm Information and rates for plans: /brm/rate/ira_home.aspMortgages Comparison Chart for all types of mortgages: / Comparison Rates for all types of mortgages: /brm/rate/mtg_home.asp?link=5Auto Loans Comparison Rates for car loans: /brm/rate/auto_home.asp?link=5Auto Insurance Comparison Rates for car insurance: /brm/insurance_home.asp?link=2Children Average costs for children: /articles/family/kids/tlkidscost.asp Detailed costs for children: /pubs/family/354-030/354-030.html#L3Average Living Expenses Average costs: /distribution/businessmanagement/DF5899.htmlEconomic Budget Project Rubric Part IPointsIncompleteInaccurate/UnrealisticAccurate/RealisticExcellentTotal0-1-23-45-6-78College012Resume0-1-23-45-6-78-9-10q Job Listingq Qualificationsq Obstacles0-1-23-45-6-78Total Part IIPointsIncompleteInaccurateAccurateExcellentNet Salary0-12-3-45-6-7Fixed Expenses0-12-34-56Variable Expenses0-12-34-5-67-8Investments001-23Spreadsheet0123Total Part IIIPointsIncompleteInaccurateAccurateExcellentHome012-34Car012-34Childrens Expenses0-12-3-45-6-78-9Total Part IVPointsIncompleteInaccurateAccurateExcellentNet Salary0-12-3-45-6-7Fixed Expenses0-12-34-56Variable Expenses0-12-34-5-67-8Investments001-23Spreadsheet0123Total Presentation/OrganizationPointsPoor (1-5)Average (6-10)Good (11-20)Excellent (21-25)TotalTotal PointsDefinitions1. Excellent Above and beyond the requirements. Providing extra information and research. Realistic in every aspect.2. Accurate Met all requirements. All information is correct, completed and realistic.3. Inaccurate Most requirements were met. Information is incorrect to a degree and/or unrealistic.4. Incomplete Majority of the requirements were not met. Information provided is incorrect and shows you are living in a fantasy world.Economics Budget Project PortfolioInstructions: Complete the following information and attach any documentation that verifies your information.Part I.Getting StartedStep 1:Group Members: Steps 2:Colleges: How did you pay for college?Step 3:Where will you live after college? Steps 4-8:Careers: (attach job listing)Qualifications:(attach a resume)Obstacles:Salaries: (attach proof)Total Household Income:Part II. Balancing a Monthly Budget (at approximately 5 years from now.)Members:Total Gross Salary National Income Tax State Income Tax FICA (7% of gross) Insurance* Retirement* Net Salary Fixed Expenses Rent/Mortgage* Utilities (water, electricity, gas) Cable, Internet, Phone Car Loan* Auto Insurance* Other LoansTotal Fixed ExpensesVariable Expenses Gasoline Food Clothing Entertainment Gifts Charities Credit Card Payments Savings/Investments MiscellaneousTotal Variable Expenses Total Monthly Expenses* These are items you must attach proof of your selections and cost.Part III. Increasing your Standard of Living (Decisions to be made during the next 5 years.) Step 1: Provide Research for Buying a Home Step 2: Provide Research for Buying a Car Step 3: Provide Research for Expenses Related to Raising ChildrenPart IV. Balancing a Monthly Budget (at approximately 10 years from now.)Members:Total Gross Salary National Income Tax State Income Tax FICA (7% of gross) Insurance* Retirement* Net Salary Fixed Expenses Rent/Mortgage* Utilities (water, electricity, gas) Cable, Internet, Phone Car Loan* Auto Insurance* Daycare Other LoansTotal Fixed ExpensesVariable Expenses Gasoline Food Clothing Diapers, wipes, formula etc. Entertainment Gifts Charities Credit Card Payments Savings/Investments Vacation MiscellaneousTotal Variable Expenses Total Monthly Expenses* These are items you must attach proof of your selections and cost.* Organize the project with the information in the same order as it is on this worksheet. Provide pictures and proof in a location near the information for each Part.Jane Smith2432 Brook DriveOrlandoFL 27321(619) 555-0681Jane.S_PROFILEProfessionally qualified Purchasing and Materials Manager with more than ten years experience of the preparation and negotiation of contracts. Accomplished in all areas relating to the purchasing and sale of products ranging from engineering raw material to communications systems. WORK HISTORYMar1996-PresentPurchasing and Materials ManagerI.M. Products Boca Raton, FLResponsibilities: Preparation and negotiation of purchasing contracts Control purchasing turnover of $3-4 million Set and maintain stock levelsAchievements: Introduced perpetual inventory and M.R.P. systems to ISO 9000 Improved user confidence in materials control function Reduced inventory levels by 300% to $450,000Aug1992-Mar1996Sales NegotiatorRetail Shop Co. Boca Raton, FL Research into product applications and markets Advertising and promotion of goods Negotiation and completion of sales products Expediting payment and delivery Management of collection and storage functionsEDUCATIONMay1992-Sep1992Georgetown UniversityWashington, DCGPA: 3.0Associate of Science Degree:Mechanical and Manufacturing EngineeringExtensive professional training in M.R.P. systems.SKILLSMember of the Chartered Institute of Purchasing and SupplyMember of the Institute of Industrial ManagersSpeak fluent FrenchStrong negotiation and interpersonal skillsUse and application of personal computersFull clean driving licenseREFERENCESAvailable on request.Gross Pay to Net Pay (Disposable Personal Income) ExampleBased on a salary of $50,000 a yearFederal Tax Table Range$30,650$74,200$4,220.00 plus 25% of the amount over 30,650Initial amount ($30,650) =$4,220.00Additional amount ($50,000 - $30,650 = $19,350)0$19,350 * 25% = $4,837.50Total Federal Tax =$9,057.50Monthly Federal Taxes = ($9,058/12)$754.84State Tax Table RangeOver $7,000.$230.00 plus 6% of the amount over 7,000Initial amount ($7,000) =$230.00Additional amount ($50,000 - $7,000 = $43,000)0$43,000 * 6% = $2,580.00Total State Tax =$2810.00Monthly Federal Taxes = ($2,810/12)$234.17Members:Partner 1Partner 2 Total Gross Salary$4,166.67? National Income Tax$754.84? State Income Tax$234.17? FICA (7% of gross)$291.67? Insurance* $225.00? Retirement*$291.67? Net Salary$2,369.32$1,580.00$3949.32 *Based on HMO single coverage.*Based on an average between low $2000 and high $5000 = $3,500/12 =$291.67.Making sense of alphabet soupBefore you visit a country where the population speaks a foreign language, it helps to know a few key words and phrases. The same holds true when youre trying to decipher the lingo of health insurance. Whether youre buying individual or group health insurance, know there are several health plan varieties, including traditional indemnity fee-for-service plans (FFS), health maintenance organizations (HMOs), point of service plans (POS), and preferred provider organizations (PPO). Each plan has its own features to consider before making your choice. FFS, also called traditional indemnityFFS coverage offers flexibility in exchange for higher out-of-pocket expenses, more paperwork, and higher premiums. FFS advantages You may choose your own doctors and hospitals. You may visit any specialist without getting permission from a primary care physician. FFS disadvantages Theres typically a deductible (anywhere from $500 to $1,500) before the insurance company starts paying claims, and then doctors are reimbursed about 80 percent of the bill while you pick up the remaining 20 percent. You might have to pay up front for medical services, and then submit the bill for reimbursement. FFS plans pay only for reasonable and customary medical expenses. If your doctor charges more than the average for your area, you will have to pay the difference. HMOHMOs are the least expensive, but also the least flexible of all the health insurance plans. They are geared more toward members of a group seeking health insurance. HMO advantages They offer their customers low co-payments, minimal paperwork, and coverage for many preventive-care and health-improvement programs. HMO disadvantages You must choose a primary care physician, also known as a PCP. HMOs require you to see only network doctors, or they wont pay. You must get a referral from your PCP to see a specialist. POSPOS plans are more flexible than HMOs, but they also require you to select a primary care physician (PCP). POS advantages Depending on your insurance companys rules, you may choose to visit a doctor outside the network and still receive coverage but the amount covered will be substantially less than if you went to a physician within your network. These plans tend to offer more preventive care and well-being services, such as workshops on smoking cessation and discounts to health clubs. POS disadvantages You must choose a PCP. While you may choose to see a physician outside the network, if you dont receive permission from your PCP, youre likely to wind up submitting the bills yourself and receiving only a nominal reimbursement if any. PPOPPOs give policyholders a financial incentive reasonable co-payments (also called co-pays) to stay within the groups network of practitioners. PPO advantages The standard co-payment is $10 for a routine office visit during regular hours. You may go to any specialist without permission, as long as the doctor participates in the network. PPO disadvantages If you see an out-of-network doctor, you might have to pay the entire bill yourself, and then submit it for reimbursement. You might have to pay a deductible if you choose to go outside the network, or pay the difference between what network doctors and out-of-network doctors charge. How to find an individual health planYour first step in getting health coverage is to contact an insurance agent in your area, or an insurance company. An agent should be familiar with the insurance companies that do business in your state, especially those able to provide the coverage you need. You might do business with either a captive agent who works for one insurance company, or an independent agent or broker who sells policies for a variety of companies. A list of agents can be found in your phone book or by contacting your state department of insurance. You should discuss with your agent your own particular health insurance needs. Think carefully about what coverage you must have. Do you need health insurance for your whole family, or just yourself? Do you want to choose your providers? If youre over 65, do you need insurance to fill the gaps in Medicare? Do you need and can you afford long-term disability and/or long term care coverage? When youve found the right coverage, you need to fill out an application or give information to your agent to complete the necessary forms. Be honest. Its important to disclose your medical history thoroughly and accurately.