Personal Budget Instructions:
Included in these instructions is the worksheets to be used for the Personal Budget.
(100 pts) First, access the personal budget worksheets located at
http://faculty.mccneb.edu/dwilhelm. Click on the left margin link, “Wealth Building
Fundamentals” and then scroll to the bottom of the page to the “Personal Budget
Worksheets” link. Be sure to save the worksheets from the website onto your
computer before entering data into the worksheets as they will NOT be saved if entered
on the internet.
After saving the excel file to your computer, please complete Worksheet 1as the basis
of achieving your financial goal. Begin by thinking about a specific goal to be achieved
by a target date. Then, complete Worksheet 1 and note the monthly amount needed to
achieve the goal. This monthly amount will be reflected in your final budget and
adjusted in Worksheet 4.
Next, complete Worksheet 2 (Cash Flow Statement) and use account statements,
receipts, checkbook registers and pay stubs as sources to reference. The time period
suggested is income and expenses for a one month period. Be realistic if you must
estimate any of the values. The purpose of Worksheet 2 is to better understand both
current sources and uses of income and expenses so you can begin develop a financial
plan for achieving success in final budget shown in Worksheet 4.
Third, complete Worksheet 3 (Balance Sheet) and reference current account
statements for loans, credit cards or mortgage payments as well as Kelly Blue Book.
(http://www.kbb.com) when determining the value of a vehicle. The data entered into
Worksheet 3 should be a total value amount for each item listed. Note, the orange
shaded cells are calculated fields and do not require any entry.
Lastly, complete Worksheet 4 (Personal Budget) and be sure to include any adjustment
needed as a consideration for the monthly goal established in back in Worksheet 1. For
example, what changes or adjustments to the previous Cash Flow Statement developed
in Worksheet 2 will be made in Worksheet 4 (Personal Budget) to ensure the financial
goal is achieved? Include your actual spending at the end of the month and note the
variances calculated in the orange shaded fields. Input an explanation for the variance
between your budget created and actual spending if the variance is 5% or more. You
may enter your text explanation in the yellow cells.
Be sure to save each worksheet on your computer and print them as part of the final
Personal Budget project submitted by the due date posted in the syllabus. Each
worksheet is already properly formatted for you so it should print on one page. Please
let me know if you have questions or need clarification about the Personal Budget
project. I have also provided below (page 2) the sections of your written summary once
the personal budget worksheets are completed. Be sure to include the worksheets as
part of your written summary submitted.
Personal Budget (Written Summary) 5-6 Pages not including the 4 worksheets
noted above:
1)
Explain Budget Purpose –
a. Why does an individual need a budget?
b. What are specific examples of consumer issues without a budget?
c. Explain the important role of a budget to achieving financial goals.
2)
Describe Budget Benefits –
a. What are some benefits of preparing, tracking and monitoring use of a
personal budget?
b. What are two or three potential life events which affect a personal budget?
3)
Establish Budget Goals (Quantitative) –
a. Include a specific, actionable, measurable quantitative goal or goals?
b. How does the time value of money help to achieve financial goals?
c. Provide a written explanation of the calculation shown from worksheet one
to illustrate the use of the time value of money to achieving ones goals.
4)
Provide Budget Example (Include Worksheets) –
a. Demonstrate a budget example using Excel
b. Describe the sources of income and expenses over a one month period.
5)
Show Budget Variances (Actual vs. Planned) –
a. Use worksheet 4 as a current budget by line item for income and expenses
(beginning month) and input the actual spending for the month in the
yellow shaded column for the same line items for income and expenses.
For variances of 5% or more, include a brief description for what caused
the variance and include this as part of your written discussion in your
summary as well as your recommendations for improvement.
6)
Explain Budget Changes (Reasons for Variance) –
a. What is the reason for the variance? What event occurred that was
unplanned? Describe variances that occurred during the period.
7)
Recommendations (Discuss how to correct variances to achieve goals) –
a. What specific actions or recommendations will the student take (if any) to
correct the variance in future months to achieve their goals?
8)
Summary (Highlight purpose, benefits, recommendations and next steps) –
a. Briefly summarized what was learned from the project and how the
knowledge and experience will be applied in the future?
b. Ex: Save for college, car or home purchase, etc.
9)
Include as attachment the 4 excel worksheets of income, expenses (use income
statement format) or assets, liabilities or net worth (use balance sheet format)