Continue Banking Simulation

Today we're going to finish month two of our virtual checking accounts.  Follow the correct procedure for each of the following transactions, including writing checks (if applicable), writing items in the Transaction Register, etc.

• 3/22 - You have a garage sale to save up additional money to cover your upcoming summer college class.  You manage to collect the following amounts which you will put on your Deposit Slip:
  + 37 quarters
  + 18 dimes
  + 12 nickels
  + 55 pennies
  + 6  $20 bills
  + 4  $10 bills
  + 7  $5 bills
  + 41  $1 bills
  + Check #1824 for $20.00
  + Check #154 for $16.50
  + Check #913 for $100.00
  + Check #8213 for $125.50
• 3/23 - You receive an Income Tax check for last years taxes.  The check (#52280226) is for $473.29.  Fill out a Deposit Slip for this check and indicate that you would like $100 cash back which you will use to go out with some friends.  Make sure to put this in your Check Register.
• 3/24 - You stop by Games R' Us to buy a new video game.  Write a check for $80.29.
• 3/25 - You decide you need a new hat.  Use your debit card to buy your hat from Wig Out for $22.95.
• 3/25 - You need a new shirt to match your cool new hat.  Write a check for $24.17 at Cold Topic.
• 3/25 - You buy a belt, socks, and underwear at American Dog.  Write a check for $33.91. 
• 3/26 - You and your friends go to dinner and the movies.  You use your cash to pay $11.12 at McTaco King.  You also use your cash to pay $8 to get in to the movies and $8 for popcorn at Stadium 6 Theater.
• 3/27 - You want to go clubbing this weekend so you need to fill up your car with gas.  Spend $42.11 on gas at Tweakin' Beacon on your debit card.
• 3/28 - You drive to Sacramento and pay the $10 cover charge at Yo'Mamaz with cash.  You use your debit card to buy soda's amounting to $24.  They also charged $2 to use your debit card.
• 3/29 - Your friend is arrested for being in a bar fight.  Write a check for $250 to bail them out.  Make the check payable to The Sacramento Police.
• 3/30 - You're really tired the next morning and decide you need some coffee.  Stop by MoonBucks and use your debit card for $11.54.

When you have finished, compare your last amount with your neighbor and try to figure out who's wrong.  :)

Budget: Creating an Excel Spreadsheet

If you're having trouble understanding the coordinates in Excel, try to think of them like a Battleship game:

 In this example, the boat that has been hit is at cell E7.  The boat in the bottom-right corner is at cell J10.

Rows are horizontal... like the rows of a theater.  And they are numbered -- row 3, row 4, etc.

Columns are vertical... like columns in a building.  They are lettered -- column A, B, C, etc.

Next we will open and explore this spreadsheet:  Spreadsheets

• When you open it, go to FILE > MAKE A COPY and save it to your folder to work on.

Looking at Budgets

Today we are having a class discussion about budgets and building a "Hard Times" budget using the absolute minimum amounts for rent, car insurance, food, utilities, etc. We will also calculate monthly income based on a minimum wage and will discuss how tight our budgets might be.

Homework:  Another "Ask Someone Who Knows" assignment where students are to ask someone who owns a house *and* someone who rents an apartment/house for a general budget.  [Forms Will Be Here]

We will be using this data on Tuesday in a spreadsheet, so make sure you get it done.

After Our Discussion

We went with the absolute minimum that we thought we could survive on and these are the numbers we went with:

Monthly Expense	Amount	Explanation
Housing / Rent	$ 400	Studio apt.
Food	$ 100	Eating only Ramen / Mac&Cheese
Car Payment / Insurance	$ 60	No car payment / budget insurance
Gas, Oil & Auto Maintenance	$ 100	Economical car / minimal driving
Utilities (PG&E, Water, Garbage)	$ 150	Basic utilities
Phone / Cell / Internet	$ 35	Cheapest service possible
Cable / Satellite	$ 0	None.
Health Care / Medicine	$ 0	None -- need to regular medication.
Clothing	$ 6	Shirt, pant & budget shoes per year.
Entertainment	$ 10	One event or maybe Netflix.
Pets	$ 0	No pets.
Sundries (TP, Soap, Shampoo, etc.)	$ 50	Budget products (dollar store TP)
Furnishings & Kitchenware	$ 20	The basics (pillows, dishes, pots)
School Expenses	$ 0	No school (or scholarships/grants)
Credit Card Payments	$ 0	No credit cards... EVER.  :)
Child Care	$ 0	Hopefully not yet.
Savings	$ 0	Hard times -- no budget for savings.
Laundry / Dry Cleaning	$ 20	One load per week.
Energy Drinks, Soda & Candy	$ 0	None.

That comes to a total of  $951.00 per month.

So how much can you make working full time (no days off and no vacation days)?

Well, with minimum wage being $8.50 per hour, if you worked full time (40 hours per week) every week for 12 months (no vacations or sick days)... you would make around $1473 per month ($8.50*40*52/12).  But wait... there are taxes and other things (Social Security, Disability, etc.) that come out of your check.  You will likely bring home more like $1105.  That gives you a surplus of $150 each month!  That means if you actually ever want to eat something besides Ramen noodles... or buy a pair of shoes... or pick up a candy bar... you can probably do it.

Remember, though... that things like a flat tire, a car repair, a broken tooth, an injury, breaking your phone, etc. can eat up months of your "extra" money.  The smart move is to put "extra" money into savings for those kinds of emergencies.

The other thing to remember is that you may [some day] want to go out with friends... or see a movie... buy a birthday present... or buy a video game.  That money has to come out of somewhere.

Budgets: The Cost of Living on Your Own

Last week I asked you to interview someone who lived in a house and someone who lived in an apartment to get an idea of how much it will cost living on your own.  Clearly there will be differences based how nice the apartment/house is, whether you are renting or buying, how large it is, and where it's located... but you should have a general idea at this point.  The biggest variations will probably include how people spend their "extra income" -- although quite often answers about these questions are not completely honest.

Collaboration: Today I would like you to sit for a few minutes with another person [who actually did the interview] and compare figures.  Make sure you note the other person's information on your paper.  Discuss the information with them; including why the amounts are different, difficulties you had in getting the information, etc.  After you finish comparing notes, sit with another classmate and compare notes with them.

Discussion: Next we will have a brief discussion to compare overall notes.

Hands-On: Next we will work on our "Hard Times" budget and set some actual numbers down that you learned from your interviews.

Video: Finally we will finish up Dave Ramsey's Savings (Part III).