Financial Planning Project

Name: ______Period:______Mrs. Hoy-Hyacintht – Economics Date: ______

- 1 - Financial Planning Project

Background You’ll come into contact with money almost every day for the rest of your life. When you’re at work, you’re earning money; when you’re at the mall, you’re spending money. Used poorly, money can be a source of anxiety and lead to financial problems. Used wisely, money can be a tool to help you achieve your goals and dreams. Task You and others in the class will be working to complete three primary objectives: 1. Learn the financial planning process – what it is and what it can do for you. 2. Apply the processes through assignments that relate to your experiences with money. 3. Take control of your finances, starting today!

Purpose To improve your personal, decision-making skills as they relate to the use of your money.

Final Product Your final project should be presented in a 3 tab folder, clear plastic project folder, or binder. This is the order: 1. Cover Page 2. Project Checklist 3. Completed Project printed 4. "Who are You" Survey 5. "Career Cluster" Survey 6. Career Research 7. Application 8. Cover Letter 9. Resume 10. Follow up/Thank you letter 11. Budget Spreadsheet

All final items must be submitted to Turnitin.com.

- 2 - Stage 1 – Career Search

You’ve just graduated - congratulations! Now it's time to find a job and join the “real world”. There’s an old saying that goes, “since you’re going to be working for the rest of your life you might as well do something you really enjoy.” Also, “if you find something you enjoy doing; you will never work a day in your life”. Ideally, you’d like to find work you love to do and that pays you enough to live comfortably. You have the advantage of time and the opportunity to choose. After high school you might go directly into a job, enter a training program, or go to college. Your future is just beginning to unfold, and the choices about work are yours to make.

Directions: Go to the websites listed below in order to complete the assigned work.

The Process: Step 1. Complete the “Who Are You” – Personality Inventory (handout) a) Identify and explain your personality type(s) ______b) How accurately does this personality classification describe you? Explain. ______Compete the “Career Cluster Interest Survey” (handout) Step 2. Make and evaluate a list of careers that fit your personality  Review the results of your “Who Are You” and “Career Cluster Interest Survey” and make a list of five careers that you match your personality. 1. ______2. ______3. ______4. ______5. ______6. ______7. ______8. ______9. ______10. ______

*You may also use the following career research website to complete the next step in this stage. http://www.careervoyages.gov/students-wheretostart.cfm

- 3 - Step 3. Choose a career to investigate  Now, collect information to prepare for the remainder of your personal finance project.  First, choose five jobs to research out of the ten that you recorded above.  Then, use the following websites to research your careers: o http://www.bls.gov/oco/ocoiab.htm#A o http://www.acinet.org/acinet/select_occupation.asp?stfips=12&next=wages1  Finally, on a separate sheet of paper, you should report the following information about each of the five career opportunities: 1. Training or education required for the career 2. Nature of the work 3. Working Conditions 4. Job Opportunities 5. Expected salary range (entry level to five years) 6. Positive or negative aspects of the career

 Do your best to narrow your prospective careers down to one for the remainder of this project. Of course, as you research your career you may find that you want to change it. Regardless of your decision, you should focus on one career. o List it here: ______

Step 4. Find a Job!

 By now you should know what career path you are going to pursue. Now it is time to hunt for a job!  First, use the following websites to gain specific employer information. o www.monster.com o http://careers.yahoo.com/ o www.hotjobs.com o http://www.quintcareers.com/top_10_sites.html  Next, find ten companies that you might want to work for, and their information on the following Job Search Log.

Job Search Log

COMPANY ORGANIZATION PHONE # CONTACT TYPE OF COMMENTS ADDRESS PERSON CONTACT

- 4 - 1.

Stage 2 –Budgeting

Wow, your head is probably spinning with all the work it has taken to get your first job. Now you get the coveted responsibility of figuring out how to use your money. Have you ever thought about where your money goes? What do you do with it? Do you spend it on food and clothes, or do you save most of your money for the ultimate trip to Europe? Directly or indirectly, you’ve probably already spent some money today. If you came to school by car or bus, money was spent to pay for gas. If you buy a snack during the day or buy your lunch in the cafeteria, you’re going to be spending money. That’s what this stage is about, understanding where your money goes and figuring out how to make the most of it.

Directions: Go to the websites listed below in order to complete the assigned work. The Process: Step 1. Defining a Budget 1. Use the following website: http://articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/Your5MinuteG uideToBudgeting.aspx to answer the following questions: a. What is a budget and why do I need one?

- 5 - ______List and describe the three elements discussed under “Building the Budget Habit” as described on the following website: b. ______c. ______d. ______Step 2. Research Fixed and Variable Expenses  First, define the following terms at www.dictionary.com o Net Income – o Fixed Expenses – o Variable Expenses –  Next, determine approximately how much money you would net per month at the job you selected in Stage 1 (entry level wages). o Net Income Per Month: $______ Finally, determine how much each item listed on your budget will cost you per month by searching the following websites: a) Rent  Use the following websites: www.rent.com, www.apartments.com, www.apartmentguide.com to help you find an area to live in that will be both desirable and cost efficient. For the sake of the project, you may create a fictional roommate to split the cost with you. Fill in the following information: o Address - o Bed/Bath - o Pets - o Property Features - o Comments - o Monthly Cost - b) Electricity, Water, and Telephone  Find out from your parent(s)/guardian the average monthly cost for each of the following fixed prices: o Electricity - o Water - o Telephone - o Cable TV - o Gasoline -

- 6 - o Medical/Dental Care - c) Car Payments  Use the following websites to buy a new/used car: www.edmunds.com, www.autotrader.com, www.autoweb.com, http://carpoint.msn.com/. For the sake of the project you are awarded $3000.00 as a down payment on any new/used car. Use the following website to determine monthly payments: http://autos.yahoo.com/finance/calcloanlease.html?cf=autoloan. Fill in the following information to complete this step:

o Make - o Model - o Retail Price - $______o Estimated Monthly Payment - $______ Use the following website to determine the monthly cost of car insurance. http://autos.yahoo.com/insurance.html?refsrc= o Estimated Monthly Rate - $______b) Food  Go shopping for food at http://www.publix.com/servlet/MainController? action=prepareGroceryList to compile an imaginary shopping list, which you will then multiply by four to determine an estimated monthly cost for food. Fill in the following information to complete this step: o Grocery List – Include Item and Price

1. 11. 2. 12. 3. 13. 4. 14. 5. 15. 6. 16. 7 17. 8. 18. 9. 19. 10. 20. o Estimated weekly cost x 4 = $______Step 3 – Figuring Your Budget  Hopefully you have survived the rigors of selecting a job and researching different methods of spending. Now you will need to input information into your Personal Finance Budget Spreadsheet, which was provided by your instructor.  At this point in the project, you have learned how much it is going to cost to live. Now, you must “play with the numbers” to make it work.  Complete the following steps in order to complete this project: 1. Locate all of the calculations that were determined throughout the project. 2. Determine your total gain/loss for the month on the budget spreadsheet. 3. If necessary, adjust the figures to break even, or to create a surplus. (You can use comparative figures in the month column next to your original figure.)

- 7 - Step 4 - Research Savings  The United State’s financial system offers many different opportunities to “make your money work for you”. You will need to identify basic information about saving throughout this section.  For the sake of this project you are awarded $5000.00 for an initial investment.  You will be researching the following investment possibilities in order to complete Stage 2 1. Checking Account 2. Savings Account 3. Money Market 4. Certificate of Deposit (CD) 5. Individual Retirement Account (IRA)

1. Checking Account - Go to the following website in order to answer questions about Checking Accounts: https://www.bankofamerica.com/index.jsp  List the three types of checking accounts offered at Bank of America. a. b. c.  How much do each cost monthly? a. b. c.  Which of the previous offers interest on their account?  List the Balance Tiers and each level’s Annual Percentage Yield

Balance Tiers APY

 Indicate the monthly cost of your checking account $ ______

2. Savings Account - Go to the following website in order to answer questions about Saving Accounts: http://www.bankofamerica.com/deposits/checksave/index.cfm? template=save_overview&context=&statecheck=FL&cd_bag=&sa_bag=&ch_bag=  Briefly describe Bank of America’s Savings Program ______ How much money does it take to start a savings account? $______ What balance must you maintain in order to avoid monthly fees? $______ What is the APR for the Statement Savings program $______

- 8 -  How much money are you going to allocate towards your savings from your initial $5000.00? $______ How much money are you going to deposit into your savings from your net income monthly? $______ Indicate the monthly cost of your savings account $______

3. Money Market Account - Go to the following website in order to answer questions about Money Market Funds: http://momo.essortment.com/whatismoneyma_rvma.htm

 Explain the advantages of a money market account ______ List and explain the three different types of money market accounts: a. b. c.  Go to the following website to answer additional questions about Money Market Accounts: http://www.bankofamerica.com/deposits/checksave/index.cfm? template=save_selectmoneymarket

 How much money does it take to start a money market account? $______ What balance must you maintain in order to avoid monthly fees? $______ List the Balance Tiers and each level’s Annual Percentage Yield Balance Tiers APY

 How much money are you going to allocate towards your money market account from your initial $5000.00? $______ How much money are you going to deposit into your money market account monthly from your net income? $______ Indicate the monthly cost of your money market account $______

4. Certificate of Deposit (CD) - Go to the following website in order to answer questions about Certificates of Deposit: http://www.sec.gov/investor/pubs/certific.htm

- 9 - a. What is a Certificate of Deposit?

b. Why are CD’s tiered (ranked)

c. What typically happens when you withdrawal early?

d. Why is a CD considered a safe investment?

 Go to the following website to answer an additional question about CDs: http://www.bankofamerica.com/deposits/checksave/index.cfm? template=cd_27&context=tabpage_Rates_Fees  How much money does it take to open a traditional CD? What is the exception? $______

 List the Balance Tiers and each level’s Annual Percentage Yield Term/Months APY

 How much money are you going to allocate towards your money market account from your initial $5000.00? $______ Indicate the monthly cost of your certificate of deposit $ ______

5. Individual Retirement Account (IRA) – follow the following website in order to answer questions about mutual funds: http://www.moneyinstructor.com/art/mutualfundunders.asp a. What is an IRA?

b. How much do present tax laws allow you to deposit into an IRA per year? $______

c. How does an IRA change for married couples?

d. Explain how the tax laws regarding deposits will change over the next five years.

e. Explain how an individual makes withdrawals on an IRA.

f. What is the difference between a traditional IRA and a Roth IRA?

- 10 -  How much money are you going to allocate towards your IRA account from your initial $5000.00? $______ How much money are you going to deposit into your IRA from your net income monthly? $______

*Next, estimate how much money you will allocate towards the various methods of savings. You should also project how much money you will make on each of the investments in 10, 20, and 30 year time periods. Base these figures on your original APY, which should give you an indication of where you want to spend your money.

Initial Investment Monthly Financial Assets APY 10 20 30 (out of 5000) Investment

1. Checking

2. Savings

3. Money Market

4. Certificate of Deposit 5. Individual Retirement Account

Step 6 – Figuring Your Budget  Hopefully you have survived the rigors of selecting a job and researching different methods of spending. Now you will need to input information into your Personal Finance Budget Spreadsheet, which was provided by your instructor.  At this point in the project, you have learned how much it is going to cost to live. Now, you must “play with the numbers” to make it work.  Complete the following steps in order to complete this project: 4. Locate all of the calculations that were determined throughout the project. 5. Open your Personal Finance Budget Spreadsheet and input the data into the Budget program for one month. 6. Determine your total gain/loss for the month. 7. If necessary, adjust the figures to break even, or to create a surplus. (You can use comparative figures in the month column next to your original figure.) 8. Be sure to Save and Print your Personal Finance Budget Spreadsheet.

BUDGET SPREADSHEET

- 11 - NET INCOME Monthly Monthly Income FIXED EXPENSES Rent Electricity Water Telephone (Home & Cell) Car Loan Payment Car Insurance Gasoline Cable T.V. Investments (Stocks, IRA, etc.) Food Medical/Dental Care SUBTOTAL: $ - VARIABLE EXPENSES Personal Savings Entertainment Clothing Miscellaneous Personal Care SUBTOTAL: $ - TOTAL EXPENDITURE Total Income $ - Total Expense $ - GAIN/LOSS: $ -

Stage 3 –Reflection

Write a formal summary (typed, double spaced, 10 or 12 point font) reflecting on the concepts that you learning in doing this project. Consider the following questions:  What is the most important reason for having a financial plan?  Describe what you consider may be your greatest obstacle in putting the plan into action?  What is your greatest asset in making the plan a success?  What is the most important lesson you learned in creating you financial plan?  How will you use this information in the future?  Share your final project with your parent/guardian. Include their comments/ideas.  What grade would you give this project and why?

Congratulations, you have successfully completed life!!! You are a real person!!!

PROJECT CHECKLIST: Print out this page and check off each item when completed. Include this page with your project.

- 12 - CAREER SEARCH: ______Career Interests Inventory 20 points ______List and evaluate careers that fit your personality ______Occupation – Research 5 jobs ______Find a Job! Identify at least 10 Employment Opportunities

BUDGETING: ______Budget research 20 points ______Fixed and Variable Expenses

HOUSING ______Type of Housing: Apartment or House (Get Pictures) ______Rent/Mortgage (How Much $ per Month?) ______City and State ______Community information (population, things to do) ______Pictures/maps of the city ______Utilities (How Much $ per Month?) ______Furnishings (How Much $ - What will you need?) AUTO ______Make, model, insurance, monthly payment, service, gas, etc.

PERSONAL EXPENSES (not all are required and you may have some additions): ______Groceries ______Internet Service ______Dental ______Cell phone ______Clothing ______Personal Care ______Internet Service ______Entertainment

SAVINGS ______Checking & INVESTMENTS: ______Savings 20 points ______Retirement

FINANCE BUDGET SPREADSHEET: 10 points ______Balanced and complete spreadsheet

Poster Board and Presentation 20 Points

REFLECTION: ______One page reflective essay emphasizing what you learned. 10 points

- 13 -