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3.18.3.G1
Welcome to
Life In…United States
…a Family Finance Simulation
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Objectives
 Create a spending plan
 Incorporate the decision making process into daily life
 Demonstrate the relationship between income and human
capital
 Demonstrate Take Charge Today course principles within
the decision making process
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What is “Life In…” ?
 Family finance simulation
 “Real life” financial constraints
– Costs are national averages
 Simulation is an average community in the United States
– 25 individuals in 18 households
United States Census Bureau, United States Department of Labor, Bureau of Labor Statistics, United States
Department of Agriculture, National Coalition on Health Care, and various private businesses
You are better off in
a community
 Individual or family values, needs and wants
– Family dynamics and lifestyle choices
Create a poster including:
• family name,
• family members and ages,
• occupation(s),
• two things things the family values
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It’s just Life
 Make spending plan decisions to meet needs by
balancing income and expenses
 Complete
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Setting a Financial Goal worksheet
Guided Spending Plan worksheet
Spending Plan Statement
Life in…United States Neighborhood Reflection
Note Taking Guide and Essay
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Life in…
United States
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Financial Decisions
Review your profile
All items printed in
red text must be
included in the
spending plan
Setting A
financial goal
Located behind
the Spending
Plan tab
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#2
Complete each
section of a
SMART goal
Include the dollar amount of the goal
in the spending plan
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Getting Paid
Review the paycheck(s) for your
scenario
• Under profile tab
Elements to address:
• Gross income
• Payroll deductions
• Net income
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Complete the
following:
Record gross
income
Record all
paycheck
deductions
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#3
Verify the net
income
For dual-income families add pay together
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Saving
 Calculate what 10% of your
family’s net income is
 Determine and record what
amount you will be saving
or investing
#4
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Neighborhood Reflection:
Savings, Taxes and Paychecks
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Housing Decisions
 Calculate and record 30% of
your family’s net income
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Housing, will you buy?
Assume a 20%
down payment has
been made
30-year mortgage
with a 6% interest
rate
Must include all
items in red in your
spending plan
Mortgage
Insurance
Property Taxes
Repairs & Maintenance
Only choose a house available for the type of location in which you live!
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Housing, will you Rent?
Assume a deposit has
been made
Pets must be allowed if
applicable
Include all items in red
in spending plan
Renter’s insurance is not
required, but
recommended
• $15.83/mo. for $25,000
coverage
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Housing Amenities
•Power
•Water/sewer
•Garbage
• Internet
• Cellular phone
• Cable/Satellite
• Recycling
Required
amenities
Optional
amenities
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Housing
Determine whether to rent or buy
• Unless indicated in the profile
Select a home and amenities
Record all housing expenses
#5
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Housing
Select additional housing expenses
• Under the “Average Expenditures” tab
record cost(s) in the “other” section
Calculate your housing sub-total
• Is it approximately 30% of net income?
#5
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Transportation
 Calculate and record 20% of your
household net income
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Transportation
Purchasing new
Purchasing used
• Not pre-owned,
warranty, wide selection
• Costs less, lower
insurance rates,
depreciates more slowly
Some profiles indicate transportation
choices the family has made
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Transportation
Assume down
payment, license,
registration and other
fees have been paid
All items in red must
be included
If an alternative
option is chosen, it
must be appropriate
for the location
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Transportation
Select
transportation
Identify which
transportation
option(s) was
chosen
Record all
transportation
expenses
Calculate your transportation sub-total and ensure it is
approximately 20% of net income
#6
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Neighborhood Reflection:
Housing and Transportation
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Food
 Calculate 15% of
household net income
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Types of Food Plans
Thrifty
Low-cost
• Generic brands
• Canned fruits and
vegetables
• No junk food
• Chicken and
hamburger
• Generic brands
• Some fresh fruit
and vegetables
• Chicken,
hamburger,
turkey, ham
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Types of food plans
Moderate-cost
• Mostly fresh fruit
and vegetables
• Both name brand
and generic
• Variety of meats
Liberal
• Organic
• Name brands
• Fresh fruit and
vegetables
• Variety of meats
including steak and
lobster
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Food
Utilize profile
information
#7
Food tab includes food
for only adults.
Children’s food is
included in “Cost of
Raising Children”
Cost of food at home for adults chart:
• Individual or 2 adults
• Identify the age of the adult(s)
• Record the food plan selected and amount
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Food
Cost of eating out
• Average
Expenditures tab
• Analyze the
average costs based
upon income level
• Determine and
record the amount
Cost of food for
children
• Go to the Cost of
Raising Children
• Select the
appropriate table
based upon single
or two-parent
families and
income
• Record the proper
amount in the
“food at home”
category
Calculate your food
sub-total
• Ensures it’s
approximately
15% of net
income
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Insurance
 Calculate and record 7% of
your household net income
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Insurance
Health
Provides financial
protection for injury
and illness
Disability
Replaces a portion of
income if unable to
work because of
injury or illness
Life
Provides a specific sum
of money to
beneficiaries if an
individual dies
be each
provided
employer is important?
When do you May
think
typebyoftheinsurance
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Health Insurance
Determine if health insurance is provided
by employer (look on paycheck)
• If provided, analyze what family members are
protected
If not provided, determine if it will be
purchased separately
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Health Insurance
Identify the age of the oldest individual being covered
Review the appropriate plan
• 1 individual = single
• 2 individuals = single + dependent
• More than 2 = family plan
Select from the row of the appropriate age and column of
the appropriate plan
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Disability Insurance
Determine if disability insurance is provided
by employer
If not provided, determine if it will be
purchased separately
If so: Monthly net income x .02 = monthly
cost
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Life Insurance
Determine if life insurance is
provided by employer
If not provided, determine if it will
be purchased separately
Select the amount of coverage
• $100,000
• $250,000
• $350,000
If so, identify who will be insured
Determine if your scenario
uses tobacco or not
Must be purchased for each
individual being insured separately
Determine the monthly cost
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Insurance
#8
Determine if insurance is provided by
employer or will be purchased
• If necessary, select insurance options
Calculate your insurance sub-total
• Is it approximately 7% of net income?
Costs of raising
children
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Select the appropriate table based upon single or twoparent families and income
Add together the costs of:
• Clothing + Healthcare + Childcare + Education +
Miscellaneous = Total cost
Cost of Raising
Children
Single parent
family
• 1 child = total
cost x 1.35
• 3 or more
children = total
cost x .72
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#9
Two-parent family
• 1 child = total
cost x 1.24
• 3 or more
children = total
cost x .77
Neighborhood Reflection: Food,
Insurance and the Cost of Raising
Children (dependents)
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Credit card
statements
Identify how much
debt, if any, was
received
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#10
Budget and pay at
least the minimum
payment
Personal Profile
Expenses
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#11
Review personal profile and record all expenses
printed in red that have not already been
accounted for, such as:
• Hobbies, activities, medical expenses, pets, charity donations,
extra bills, habits, etc.
Expenses identified in red are valued or necessary
and can not be eliminated
Average
Expenditures
 Review the average
expenditures for:
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Entertainment
Personal Care
Health Care
Apparel & Services
Contributions
Education and Reading
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#11
 These are flexible expenses
based upon averages
 Record and total expenses
Remember to allocate enough money to
cover all members of the family!
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Chance cards
Identify what
chance card was
received
#12
Incorporate that
chance card into
your spending plan
Neighborhood Reflection:
Credit Cards, Average Expenditures and
Chance Cards
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Balancing the
spending plan
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#13
Transfer all income and expense subtotals throughout the
worksheet onto this chart
Do you have a net gain or a net loss?
• If there is a net loss, identify what changes may be made.
Your balance must equal zero
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Evaluating your goal
#14
Were you able to reach your SMART
goal?
• Why or why not?
Re-write your goal to reflect what your
spending plan indicates
Creating the Spending
Plan Statement
Write your revised goal
on the Spending Plan
Statement as a final
draft
Transfer all income and
expense information to
the Spending Plan
Statement
Identify the percentage
of net income spent on
each category
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Concluding
Neighborhood
Reflection