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.
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.
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
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
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?
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.
Expense
Fixed or
Variable Expense?
Average
Monthly Cost
Yearly Cost
Percent of
Yearly Budget (Rounded)
Income Tax
Fixed $400 $4,800
$4,800 = 9.8% $48,900
Housing
$950
Food
$7,800
Clothing
Variable $75
Transportation
Fixed $6,000
Insurance & Medical
$1,200
Entertainment
$100 $1,200
Emergency Fund
Fixed $50
Savings for College
Fixed $600
Savings for Retirement
$100 $1,200
T otal $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.
) Choose an example of a fixed expense and an example of a variable expense, and explain why they are classified that way.
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.
Step 3: Creating a Balanced Family Budget
a) Search for a "family budget estimator" and calculate the monthly expenses for a family living
in your city.
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
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
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.
