Retailing Financial Literacy Project
As part of your graduation requirement, you must either take Personal Finance or both Retailing and Marketing where
you are exposed to financial concepts. To that end, this is a project that you are to have completed prior to your FINAL
EXAM.
You will add all your answers to this electronic document (do not print and hand in a physical copy) and save it on your
personal student drive on the Middletown High School network.
1.
2.
3.
4.
5.
Go to the Student Data folder
Find your Class
Find your name
Find the SSP folder
Save this document as SSP-PersonalFinance
This project has two main sections, to be done in order:
1. Budgeting and Goals
2. Financial Vehicles and Investments
This is a mandatory assignment and will result in a 20 point deduction from the final exam if not completed, in full and
with quality, prior to your final exam date.
Budgeting and Goals
Soon you will be on your own. You will need food, shelter, transportation, employment, Hot Pockets, etc. How much
will this all cost and how much do you need to earn to actually afford the lifestyle you want? In this unit you will learn
the answers to these questions and more.
Please, go in order of assignments!
Assignment 1
Future Narrative
Assignment 2
First Draft of Budget
Assignment 3
Renting an apartment
Assignment 4
Purchasing a car
Assignment 5
Purchasing groceries
Assignment 6
Final Draft of Budget
Assignment 1 Future Narrative
In this section, type a narrative of what your life is going to be like at age 25. Where will you be working? Living? Doing
for fun? What will you be driving? Be specific. Length should be no more than one page double-spaced.
Assignment 2 First Draft of your Budget
On my website under Personal Finance, click on the file titled “Monthly Expenses Spreadsheet Personal Finance.” This
will open an Excel spreadsheet that you will use to create your first budget.
It automatically calculates many aspects of the budget for you, so all you need to enter is the budget item and your
ESTIMATE of what it would cost. Don’t do any research, this is a rough draft and it’s purpose is to get your assumptions
based on what budget items cost. You must include 20 items that you will purchase on a monthly basis. For items that
you don’t purchase monthly, spread the cost out over 12 months. For example, one expense might be a trip to
Zimbabwe each year that costs $2400. Therefore, place in your budget “Trip to Zimbabwe” and put the cost as $200
which is $2400 divided by 12 months.
Only type in the YELLOW boxes please.
You will notice that the spreadsheet calculates three points of data for you:
Monthly Net Income
This is the amount you need to earn each month, AFTER taxes and insurance, to afford your budget.
Yearly Net Income
This is the amount you need to earn each year, AFTER taxes and insurance, to afford your budget.
Yearly Gross Income
This is the amount you need to earn each year, BEFORE taxes and insurance, to afford your budget. This is an important
figure because when you research a job, the typically salary figure is noted in gross income. For example, if you research
that the average salary of an Accountant is $58,000, that is in gross salary.
Once your budget is completed, delete the below example and replace it with your budget:
(total from column 1, don't type
here)
Monthly Expense
Gas
Cost
Monthly Expense
100 11
12
13
14
15
16
17
18
19
20
Name:
Eileen Over
Period:
E
100
Cost
TOTAL/Mo
100
TOTAL/Yr
1200
1620
Assignment 3 Renting an Apartment
Typically, the first time you live on your own, you will rent an apartment. As we learn about living on our own, we need
to get real about what is involved and how much it will cost. Before we create an accurate list of average expenses to
live on your own, let’s do some research on how much it actually costs to rent an apartment in Connecticut.
Using the internet, complete the following form. In a nutshell, you will research THREE apartments within a 30 minute
drive of Middletown. You need to use 2 different websites and each apartment must be in a different town. Be realistic.
No homeless shelters and no Diddy penthouses please. (See reverse side as well).
Apartment 1 (copy and paste a picture of the INTERIOR)
Website used:
City/Town:
Monthly Rent:
What is included? (heat, pets, parking, washer/dryer, bedrooms, square feet, pool, etc)
Give a short opinion on this apartment. Would you rent it? Why or why not.
Apartment 2 (copy and paste a picture of the INTERIOR)
Website used:
City/Town:
Monthly Rent:
What is included? (heat, pets, parking, washer/dryer, bedrooms, square feet, pool, etc)
Give a short opinion on this apartment. Would you rent it? Why or why not.
Apartment 3 (copy and paste a picture of the INTERIOR)
Website used:
City/Town:
Monthly Rent:
What is included? (heat, pets, parking, washer/dryer, bedrooms, square feet, pool, etc)
Give a short opinion on this apartment. Would you rent it? Why or why not.
Now that you have your 3 apartments, complete the following math equation:
1. MONTHLY RENT OF APARTMENT #1
_______
2. MONTHLY RENT OF APARTMENT #2
_______
3. MONTHLY RENT OF APARTMENT #3
_______
4. TOTAL OF ALL 3 APARTMENTS
_______
Find the AVERAGE rent of your 3 apartments. Take your total from above and divide by 3.
TOTAL FROM LINE 4 DIVIDED BY 3 =
_______ This is the average rent of an apartment you want in
the state of CT. You will use this figure for your FINAL budget
later in the unit.
Assignment 4 Purchasing a Car
One of life’s major joys and expenses is that of a car. For purposes of this assignment, you are going to research three
cars that you may drive at age 25. You are to assume that your car loan will be for six years. Complete the data below
and then put the final average car price in your final budget.
Car #1
Car Manufacturer (ie Ford)
Car Model (ie Mustang)
Car Year (ie 2012)
Details of the Vehicle
Picture of the Vehicle
Purchase price of the Vehicle (ie $15,000)
Car #2
Car Manufacturer (ie Ford)
Car Model (ie Mustang)
Car Year (ie 2012)
Details of the Vehicle
Picture of the Vehicle
Purchase price of the Vehicle (ie $15,000)
Car #3
Car Manufacturer (ie Ford)
Car Model (ie Mustang)
Car Year (ie 2012)
Details of the Vehicle
Picture of the Vehicle
Purchase price of the Vehicle (ie $15,000)
Average Cost of Your Car (Car 1+ Car 2+ Car 3)/3
_______________________________________
Monthly Cost of Your Car (see below for the formula)
(This cost is to go onto your Final budget)
_______________________________________
The average cost of a car, over six years, is $160 per month for every $10,000 cost of the car. Therefore, use this
formula:
Cost of the car divided by 10,000 = X. Multiply X by 160 for the monthly cost.
Example:
Cost of the car, $15,000 divided by 10,000 = 1.5 1.5 x 160 = $240 monthly cost.
Assignment 5 Purchasing Groceries
You are going to purchase groceries for an entire month. Use the Stop n Shop “Peapod” webpage to shop for groceries.
www.peapod.com
You do not need to create an account to shop.
Create your shopping list (talk to parents if you need guidance) for an entire month. Once complete, delete my example
below, hit the PRINT SCREEN button and copy and paste your total grocery list below. I estimate that the cost will be
$500-$600.
You will use this total in your FINAL budget.
Assignment 6 Final Draft of the Budget
In Assignment 2, you created a rough draft of your budget without knowing much or researching. After Assignments 3, 4
and 5 you have a better idea about the main costs of your budget. You will now create your Final Budget.
Go back to Assignment 2 for directions and now create your Final Budget. Do not save over your first budget, you are
going to cut and paste your final budget below.
Example:
Monthly Expenses
Monthly Expense
1 Gas
2 Apartment
3 Car
4 Groceries
5 Hair and Nails
6
7
8
9
10
(total from column 1, don't type
here)
Cost
100
2000
480
550
45
Name:
Period:
Monthly Expense
11
12
13
14
15
16
17
18
19
20
3175
Cost
TOTAL/Mo
3175
TOTAL/Yr
38100
51435
Eileen Over
E
What is the total gross income you need to afford your budget?
________________________________
What career do you want to be doing when you’re 25?
________________________________
What is the average gross salary of this occupation?
________________________________
Can you afford your lifestyle based on your chosen application?
Yes or No
What are your thoughts after completing this budget? Are you comfortable with it? Does it surprise you? What
surprised you the most? Does this make you rethink your college and career choices?
Financial Vehicles
When you earn money and don’t spend it, you put it to work for you. In this unit, you will discover ways to put your
money to work for you.
Please, go in order of assignments!
Assignment 1
Retirement
Assignment 2
Types of Investments
Assignment 1 Retirement
It is said the best way to attain a goal is to begin with the end in mind. Therefore, we begin with Retirement Planning.
There will come a time in your life when you are ready to retire from working full-time. When will that be? Why is it that
some people are retired at 40 and live the summers in Miami while others work until they are 70 and can only afford to
watch reruns of Buckwild? The reason is that some people fail to plan and others take their financial futures in their
hands and plan for their retirement.
But why must you think about retirement now, you ask? You are only a teenager. It's very simple, the earlier you start
saving for retirement (or any financial goal for that matter) the easier and cheaper it is to reach your goal. For example
(according to Allstate.com 2006):
If you put $20,000 away today, in 30 years it might be worth $350,000. If you wait 5 years and put that same $20,000
away, it would only be worth $216,000. Waiting a short 5 years just cost you $134,000!. If you waited 10 years then
invested the $20,000, your money would only be worth $135,000. Waiting 10 years just cost you $215,000!
A second reason is that chances are, by the time you retire, social security may not be around or your portion may be a
lot smaller than it is now.
Define: Time Value of Money
STEP 1: List the age you want to retire and then, in a paragraph, describe what a year in your retirement life would be
like.
STEP 2: How much would this retirement lifestyle cost you on a yearly basis?
STEP 3: To achieve your goal of affording steps 2 and 3, how much money will you need to have in one lump sum?
STEP 4: Explain how you will reach your goal for step 4 in detail.
STEP 5: Chances are by this point, you have forgotten all about inflation. Remember that over time, money becomes
LESS valuable. In 1950 you might get 4 Hershey Bars for $1.00 but today you may only get 1. Therefore, if you need
200,000 in today’s money to retire, you will need millions by the time you are 65!
Use the Future Value Calculator below to understand the impact of inflation on the numbers above. Remember, by the
time you retire you will need a lot more money than you would need if you retired today because of inflation.
http://www.easysurf.cc/vfpt2.htm#fvm
STEP 6: Give a few final thoughts on retirement. Does this assignment open your eyes? Scare you? Spur you to action?
Assignment 2 Types of Investments
To reach your retirement goals or other financial goals, you need to put your money to work for you. In the following
section, answer the below questions:
1.
2.
3.
4.
5.
Identify and define five types of investments
Identify and define three types of bank services (Savings, Checking, etc)
Define Rate of Return
Define Rule of 72
For each of the eight you identified in steps 1 and 2, identify the average Rate of Return and the time it would
take you to double your money using the Rule of 72.
6. What are the two economic factors that devalue your money and “eat” into your Rate of Return?
7. You put $10,000 under your mattress today. In one year you remove the $10,000. Did you lose money, gain
money or break even?
8. You put $10,000 in a savings account today at 3% Rate of Return. Inflation is 3% and you pay taxes on the 3%
gain, did you gain money, lose money or break even?