COPYRIGHTED MATERIAL
LET’S PRACTICE
Name: _____________________________________________________________________________
You: Budget Master or Budget Buster? You’ve graduated college, have a good job and are on your way to being an actual contributing member of society. You have financial goals and, because you took this course, understand the value of a personal budget. Today you’ve gathered up your paycheck stub, bank and brokerage statements, ATM receipts and credit card statements. Your job: Make a budget! Some of your income and expenses are fixed, some vary from month-to- month. The estimated income and expenses are provided and totaled for you. Follow the directions in the right column to reveal whether you’re a Budget Master or Budget Buster. Answer the questions that follow.
JUNE INCOME
ESTIMATED ACTUAL
DIRECTIONS
2400 PRODUCT PREVIEW This is a fixed and recurring amount. No changes! Oops, you overestimated! Your actual bonus was $200. 250 75 2725 BUDGETED ACTUAL DIRECTIONS 700 125 This is a fixed and recurring amount. No changes! 350
Pay/Salary
Bonus
Commission
You had a pretty good month in sales. Your commission check was 20% higher than estimated. What is the variance? In other words, was your actual income over or under your estimated income? _________________________________________________
TOTAL INCOME
JUNE MANDATORY EXPENSES
Rent
Utilities (elec., gas, water, garbage)
You left the lights on all night and blasted the air conditioner when you weren’t even home! Energy costs are expensive. You’re 50% over budget this month. The weather is so nice, you biked to work three days a week cutting transportation expenses by 30%! Good job!
Transportation (Car Pymt + Ins.+ Gas)
Cell phone
145 225 100 100
This is a fixed amount. This is a fixed amount. This is a fixed amount.
Savings and IRA Student Loan Pymt Credit Card – Visa
You limit your credit card charges to $100 and pay it off every month. Excellent! You are 25% under-budget on groceries this month. That would be great except that you overspent on restaurant meals. (See below)
Food/Groceries
150
Unplanned (car, vet, home maintenance) TOTAL MANDATORY EXPENSES
50
That darn cat! $35 for hairball removal.
1945
What is the variance? Are you over or under your estimated mandatory expenses? _________________________________________________
Chapter 14 | The Beauty of the Budget 274
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