For the first part of this activity, you will be given a hypothetical monthly income, a list of your basic monthly bills, and a brief description of your living situation and daily life.
Based on that information, you will create a monthly budget and financial plan that allows you to pay all of the necessary bills while also having enough money left over to live for the month.
You will also need to take into consideration the details that are given about your life. You will need to weigh your options with these details and decide what is absolutely necessary to fit into your budget and what you can afford to live without.
You may use a spreadsheet program like Microsoft Excel to organize your monthly financial plan; however, this is not a requirement if you are not comfortable using this type of program. You can also create a table or chart in a word processing program like Microsoft Word, or you can come up with another way to creatively and effectively organize and display your monthly plan.
Hypothetical Monthly Income: $3000
Basic Monthly Bills:
- Rent: $1000
- Utilities (electricity, water, internet, etc.): $200
- Groceries: $300
- Transportation (gas, public transportation, maintenance): $150
- Health insurance: $100
- Cell phone bill: $50
- Credit card debt: $100
- Entertainment (dining out, movies, etc.): $200
Living Situation and Daily Life:
You are a single person living in a one-bedroom apartment. You work a full-time job and have a commute to work. You enjoy going out with friends for dinner or activities on the weekends. You have some credit card debt that you are working to pay off.
Monthly Budget:
Income: $3000
Expenses:
- Rent: $1000
- Utilities: $200
- Groceries: $300
- Transportation: $150
- Health insurance: $100
- Cell phone bill: $50
- Credit card debt: $100
- Entertainment: $200
Total Expenses: $2100
Remaining Income after expenses: $900
With $900 left over after paying for all your necessary bills, you have some flexibility in how you choose to spend it. You may want to allocate some of this money towards paying off more of your credit card debt to get closer to becoming debt-free. You could also consider putting some money into savings for emergencies or future expenses. Allocating some funds for personal enjoyment and entertainment is also important for maintaining a healthy work-life balance. Ultimately, it's up to you to decide how to best allocate this extra income based on your financial goals and priorities.