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Personal Budget Project

Finance 510 – Davenport University

Personal Budget project will require you to examine cash inflows and outflows as well as develop a retirement plan for your household.  Each sections provides clear direction. Please review grading rubric for further detail on grading expectations.

 You are to submit both a written paper as well as an Excel model to support your findings.  You are not required to repeat excel calculation in the paper but rather use it as a reference in the paper.  Format is important.  Excel models need to be well thought out with appropriate detail for the reader to understand independent of the written paper.

 

Part 1 (must be submitted via Excel)

Personal Budget 

 

You need to develop a personal budget. Try to be as realistic as possible. If you are going to school and not working then do some research to find out what salary you will be making when you graduate. If you are working full time you can use your income now or an estimated amount assuming you will be making more money when you graduate.

For Example:

                                                                        Budget        Actual

Gross Monthly Pay

 

Total est deductions

Net Pay

 

Rent/Mortgage

Utility – Electric

Utility – Gas

Utility – Water

Cable/Internet

Phone/Cell

.

.

.

Total Expense

 

Total savings

 

Take your total savings and multiply by 12 for 12 months.  This is your estimated saving (payment) per year. (If you want to do a more elaborate budget you can).

 

To make this budget useful do this in excel so you can actually use it.

Note: You can do your budget however you want as long as it is clear and understandable to the reader (me) and you.

 

Part 2 A: (must be completed in Excel)

 

Analysis : 

 

Using the budget in part 1; Use as many time lines as you need forecast all your projected savings(investments) to get each investments future value.  You will have to determine your PV, I/y, N, PMT then calc FV

 

                  If you don’t have any idea on the I/y you could use 5 or 6% to be conservative.  N depends on           your current age and when you think you will retire.

 

Savings

401k or (403B) whichever you use

IRA’s….

Home    Ect…….

 

 

Once you add up all the future values from step 2 above, and do a time line to determine how much you will be able to spend each year assuming you are going to spend all your money. I.e.  your future value will be 0.   To calculate N, you have to make a lot of assumptions. For example, if you are planning on retiring at age 65 and think (hope) you will life until you are 90 (25 years) your N will be 25.

              

Part 2 B: (must be completed in Excel)

 

                  Scenario Analysis: 

Run at least 3 different scenarios to see the impact of decisions.  Some examples may include:

                                    What happens if you delay start of Savings for  5 years?

                                    What happens if you work 3 more years?

                                    What if the interest rate is higher/lower?

                                    What if you have more to save after student loans are paid off?

 

 

 

 

 

 

 

 

Part 4: (must be turned in Word Via TurnItin)

Reflection

 

Once you are completed with the three sections above write a page or two on what you learned from this project. This is open ended but I expect at a minimum of 1 page as a write up.  Reflection could include but is not limited to the following questions:

 

What did you learn?

Was there anything unexpected?

What changes will you be making as a result?

How do you plan on investing their funds – why? How often will you review the Plan?

What benefits are there to budgeting?

What specific changes will you make as a result of this assignment?

 

Please note: APA formatting required for all outside sources.

 

 

Note:  Created and Shared by Brian Moore for Davenport University