1.04 Why Budget?

- Budget Worksheet
Use this worksheet to complete the assignment. It contains suggested ranges for most
expenses based on common amounts for a single person. Feel free to use them to estimate
your costs, or to use your own experience or research.

Part One–Calculate Your Budget

Step 1: Determine Gross Annual Income
Your budget will be based on what your adult salary would be in a starting position of a full-
time career. Think back to the two careers you researched earlier in the module and research
the starting salary for the option that interests you most. Realistically, your annual income
should be under $65,000 for this budgeting exercise.

Career Choice: Personal financial advisor

Starting Gross Annual Income: (under $65,000)

Step 2: Calculate Taxable Income

Enter your gross income from step one and subtract the standard deduction to determine your
taxable income.

Starting Gross Income - Standard Deduction = Taxable Income

(Enter Starting Gross - $12,950 = 47.050

Income)

Step 3: Calculate Income Taxes

Using the marginal tax rate table, break down your taxable income into each bracket, then
calculate your taxes paid in each bracket. Add them together at the bottom to find your total
taxes paid.

Marginal Tax Rate Table – Show your work

Tax Rate Tax Bracket How much taxable money do Calculate taxes paid
you make in this bracket?

10% $0-$9,700 9700 970

 12% $9,701 – $39,475 39475 2977.4

22% $39,476 – $84,200 47050 757.4

Total Taxes Paid: 4704.8

Step 4: Calculate Your Net Income

Enter your starting gross income from step 1 and subtract the total taxes paid from step 3 to
find your net income.

Starting Gross Income - Total Taxes Paid = Net Income

(Enter Starting Gross - (Enter Total Taxes = 55295.2

Income) 60000 Paid) 4704.8

Step 5: Calculate Expenses

Fill out the expenses in the table. You are provided minimums or suggested ranges based on
common amounts for a single person. Choose a realistic amount considering your needs and
wants. You can also do additional research or talk to family members about the best costs to
include. If you choose $0 for an expense, explain why.
Housing (Approximately 30% of your gross Yearly Cost
income)

Mortgage or rent (Research based on your area and 12000

type of home. Multiply monthly rent/mortgage by 12 to
get the yearly cost.)

Maintenance and repairs ($200 or more) 250

Supplies ($300 or more) 400

Homeowner’s or renter’s insurance (research for 160

your area/housing type)

Furnishings ($500 or more) 1000

Property tax (if you own property) Being single, I really don’t need to own a
house, its easier to rent an apartment.

Subtotal 13810

Transportation Yearly Cost

Auto loan payment (based on the vehicle you want - N/A wont own vehicle
monthly payment x 12)

Bus and taxi/Uber/Lyft fare (varies) 1344

Auto insurance (research based on age and driving N/A

record what the average is)

Licensing and registration fees ($30–$150) N/A

Gasoline (typical use for your chosen vehicle) N/A

Maintenance and repairs ($250-$750) 250 (bike)

Other N/A

Subtotal 1594

Utilities Yearly Cost

House Phone and/or cell phone ($600–$1,200) (You 144(iphone 7 + 360 )(mint wireless
should include the monthly bill and the cost of the unlimited plan 12 months payment)
phone.) Total: 504

Cable or satellite and internet ($950–$2,000) 1250

Electric and gas ($1,200–$2,400) 1300

Water and sewer ($800–$1,000) 800

Waste removal ($150–$250) 150

Subtotal 3904

Food Yearly Cost

Groceries ($2,500 or more) 3500

Dining out ($600 or more) 300

Subtotal 3800

Personal Care Yearly Cost

Health insurance ($3,000–$8,000) (You still have to 5000

pay for health insurance even if you get it through your
job.)

Other medical costs ($500 or more) 2500

Hair and nails ($120–$500) 200

New Clothing/shopping and laundry costs ($500+) 500

Health club or Gym ($300–$600) N/A I just workout at home I have

everything I need.

Children (If you plan on having a child when starting N/A

your career at about ages 18-24, add $14,000 for
the year, per child)

Subtotal 8200

Entertainment Yearly Cost

Movies and streaming services ($120–$400) 150

Vacation ($1,000–$2,000) 1500

Other (Specific hobby, weekends, etc. $500–$1,000) 2500

Subtotal 4500

Gifts and Donations Yearly Cost

Holidays and birthdays ($500+) 750

Charity or religious donations (varies) 200

Other

Subtotal 950

Pets Yearly Cost

Food ($250+) N/A

Medical ($200+) N/A

Grooming (varies by animal) N/A

 Toys N/A

Other N/A

Subtotal N/A

Savings and Investments (should total at least 10- Yearly Cost

20% of your net income split between the 3)

Retirement account 3000(35%)

Investment account 8,000

Emergency savings 3000

Subtotal 14000

Step 6: Balance Your Budget

Fill in the net income from step 4. Next, add up the subtotals from step 5 and fill the amount for
total yearly expenses. Subtract the expenses from the net income. If you have a large surplus of
money left, adjust your budget by adding to different expenses, savings, or investments. If your
difference is a negative amount, adjust your expenses to balance your budget.

Total Net Income (Take it from Step 4 at the top) 55295.2

Total Yearly Expenses (add up all your subtotals) 50858

Difference (“Total Net Income” minus “Total 4437.2

Yearly Expenses”)

Part Two–Reflect on Your Budget

Write responses to the following questions. Be sure that your responses are well organized, easy to read
and comprehend, and use correct spelling and grammar.

1. Why should you create and maintain a budget as an adult?

To allow yourself to be aware of how you are spending your money, while also saving up for
possible emergencies like an economic crisis in which prices may grow and you can’t spend
money anymore, you still have an emergency fund in case you need it.

2. What was the most challenging part of this process and why?
 Learning what I would really need and what I don’t.

3. What adjustments did you have to make to your budget? How did you decide where to make
changes?
I accidentally over budgeted having a surplus of $12,000, so I increased my hobby spending, and
investment fund; though I still have more money.

4. Has completing this assignment changed your perspective on your future career, salary, or
spending? Why or why not?
Yes, it has allowed me to prioritize what is necessary to myself in life.

5. What is one thing you learned while completing this assignment that you will take with you into
the future?
The prices of housing in Miami Dade County is getting quite ridiculous.