Bookkeeping Basics

Name _____________ Block ____

Date _____________________
Do you have enough money for your iPod 9.0? Can you really afford to eat lunch
at Red Lobster every day? Is purchasing the Camaro a good idea? While
spending money may feel like a lot of fun, what if you don’t have it? Even worse, what if
you don’t even
think about these kinds of things? In the United States, we live in a culture of
consumption, but as
recent market crashes have pointed out we need to improve our financial literacy.
In this assignment, you will analyze an individual’s sources of income and expenses. In
each case, the
individual is asking the question “Can I afford this?”
Name ___________________________ Date ________________
Roanoke
Database Engineer (Full-Time)
Age 25
Family Single
Goal: Roanoke would like to purchase a
new HD monitor.
Monthly Budget
Income
Salary $2200
Expenses
Housing $850
Transportation $200
Health Insurance $80
Cell Phone $90
Groceries $240
Utilities $200
Loans (Credit Cards, Student Loan) $250
Savings $150
Available Funds ??????
The HD monitor Roanoke would like to have for his PC is $188. Will he have enough available
funds in order to purchase
it?
Over the weekend, there was a database disaster at his job. Roanoke has been called in for
overtime. If he gets paid
$25/hour for overtime, how many hours will he need to work in order to buy the monitor?
© Clark Creative Education

Chloe
Elementary School Teacher
(Full-Time)
Age 29
Family
Married
(1 kid)
Goal: Chloe would like to re-model her
master bathroom
Monthly Budget
Income
Teacher’s Salary $2450
Husband’s Salary $1800
Expenses
Housing $1250
Transportation $550
Cell Phone $130
Groceries $680
Utilities $250
Loans (Credit Cards, Student Loan) $400
Childcare $650
Savings $200
Available Funds ??????
Chloe would like to get a new toilet, flooring, sink and paint. She’s estimated the job will cost
$6,000. If she and
her husband decide to save their “available funds” every month, how many months will it take
until she can do
it?

Enrique
Nursing Home Aide (Part-Time)
Waiter (Part-Time)
Age 32
Family
Girlfriend
(2 kids)
Goal: Enrique would like to purchase
health insurance for his family.
Monthly Budget
Income
Nursing Home Paycheck $900
Waiter Paycheck $700
Expenses
Housing $550
Transportation $100
Health Insurance $0
Cell Phone $120
Groceries $550
Utilities $150
Loans (Credit Cards, Student Loan) $120
Savings $0
Available Funds ??????
Enrique feels uncomfortable without health insurance for himself or his two kids. A plan he is
looking at is
$100 a month. His girlfriend is staying home with his kids because he otherwise can’t afford
childcare. Is he
able to get health insurance with available funds? How much more money would he need each
month?
© Clark Creative Education

Mary
Art Professor (Full-Time)
Age 44
Family
Divorced
(4 Kids)
Goal: Mary wants to decide if she
needs to move.
Monthly Budget
Income
Professor Salary $3500
Child Support $1200
Expenses
Housing $1800
Transportation $250
Health Insurance $120
Cell Phone $150
Groceries $1400
Childcare $800
Utilities $300
Loans (Credit Cards, Student Loan) $400
Savings $350
Available Funds ??????
After a recent divorce, Mary is trying to get her finances in order. She has taken full time work at
the university,
but is unsure whether she will be able to keep her house or be forced to sell. Based on her
available funds, what
would you suggest? How much can she afford for a house if everything else stays the same?

Owen
Entry Level Salesman (Full-Time)
Graphic Designer (Part-Time)
Age 27
Family Single
Goal: Owen would like to get his own
apartment.
Monthly Budget
Income
Paycheck $1500
Graphic Design Work $300
Expenses
Housing (with parents) $300
Transportation $150
Health Insurance $100
Cell Phone $100
Groceries (with parents) $100
Utilities $50
Loans (Credit Cards, Student Loan) $450
Savings $150
Available Funds ??????
Owen would like to move out of his parent’s house and get his own place. If he moves out, his
housing cost will
increase to $700, groceries will increase to $300, and utilities will increase to $150. Based on his
available
funds, can he afford this?
© Clark Creative Education

Budget Busters
Budgets are a way to help people keep track of their income and plan their expenses. Of
course unexpected events will arise; having a solid idea of how to use your money is a
great idea. Budgets are also used to help control or trim spending. For instance if you have
budgeted 10% of
your income on groceries and you are spending over 15%, then perhaps there are ways to reduce
your costs.
In this assignment, you will be given budgets for different individuals. You will also be given
their actual
spending. Will their spending line up with their budgets or are they out of whack? Do they need
a trim? Put
your percentage skills and problem solving to the test!
Before you can get down to the nitty-gritty, you will need to calculate an individual’s Net Pay.
Gross Pay is the
total amount of money a person makes, but the Net Pay is the amount of money someone
actually receives
after taxes and deductions. Budgets are typically planned based off an individual’s net pay.
Name ___________________________ Date ________________
DeAndre – Entrepreneur – Family of 4
$65,000 annual salary at 28% Tax Rate
Amount of Taxes:
Net Annual Income: Net Monthly Income:
Projected Actual
Category Total Percent
Housing $1200
Groceries $950
Transportation $490
Debt $585
Church $390
Savings $285
Category Actual Projected Difference
Housing 1200
Groceries 950
Transportation 490
Debt 585
Church 390
Savings 285
1. How well is DeAndre adhering to his
budget? Are there any significant
differences?
2. DeAndre wants to save more money for his children’s college education, what would you
suggest he could
trim from his spending?
Housing
30%
Groceries
20%
Transportation
15%
Debt
15%
Savings
10%
Church
10%
© Clark Creative Education
Bella – Barista – Single
$28,000 annual salary at 18% Tax Rate
Amount of Taxes:
Net Annual Income: Net Monthly Income
(round to nearest dollar):
Projected Actual
Category Total Percent
Housing $575
Debt $478.25
Groceries $320
Transportation $250
Charity $100
Savings $189.75
Category Actual Projected Difference
Housing 575
Debt 478.25
Groceries 320
Transportation 250
Charity 100
Savings 189.75
1. What is the most significant difference between Bella’s actual spending and her
budget?
2. Bella would like to pay more money toward her debt to pay off her student loan faster.
Offer a
couple suggestions for what she could do based on your analysis of her financial
situation?
Housing
30%
Debt
25%
Groceries
15%
Transportation
10%
Charity
10%
Savings
10%
© Clark Creative Education
Safiya – Investment Banker – Married
$105,000 annual salary at 34% Tax Rate
Amount of Taxes:
Net Annual Income: Net Monthly Income:
Projected Actual
Category Total Percent
Housing $1950
Debt $875
Savings $920
Groceries $560
Church $495
Transportation $450
Things She Wants $525
Category Actual Projected Difference
Housing 1950
Debt 875
Savings 920
Groceries 560
Church 495
Transportation 450
Things She Wants 525
1. How well is Safiya adhering to her budget? Are there any significant differences?
2. The roof on Safiya’s house has developed a leak and her homeowner’s insurance will
not cover the
entire amount. A contractor quoted the new roof and water damage repairs at $35,000.
She will
need to rearrange her finances, based on your analysis where can she save some money?
Housing
35%
Debt
15%
Savings
15%
Groceries
10%
Church
10%
Transportation
10%
Things
She
Wants
5%
© Clark Creative Education
Rishi – Electrician – Family of 5
$48,000 annual salary at 26% Tax Rate
Amount of Taxes:
Net Annual Income: Net Monthly Income:
Projected Actual
Category Total Percent
Housing $1000
Groceries $800
Transportation $450
Debt $190
Childcare $370
Church $150
Savings $0
Category Actual Projected Difference
Housing 1000
Groceries 800
Transportation 450
Debt 190
Childcare 370
Church 150
Savings 0
1. How well is Rishi adhering to his budget? Is he able to keep up with his bills?
2. Over the weekend, Rishi was in a car accident and his car is totaled. The driver who hit
him does
not have insurance so he is on the hook for everything. He needs $5,000 to buy a quality
used car
or else he will likely lose his job, what can he do to save the money? Will he need to
move?
Housing
30%
Groceries
25%
Debt
15%
Transportation
10%
Childcare
10%
Church
5%
Savings
5%
© Clark Creative Education

Monthly Payment 101

While spending only $2,000 to take home a brand new Toyota Camry may sound like a lot of
fun, paying on
that loan for 72 months may not be. In the United States, the commentary after our last economic
collapse
was that Americans tend to buy things out of their reach. Homes, cars, televisions, you name it,
we buy it.
Perhaps shortsighted buyers expect a promotion that never comes or are on the receiving end of
an
unforeseen accident or illness. Nonetheless understanding budgets and monthly payments is an
essential
component of an individual’s financial literacy.
In this assignment, you will use a slightly intimidating looking equation: 𝑃 = !"(!!!)!
(!!!)!!! where…
P = monthly payment, C = loan amount, N = the number of months and
r = monthly interest rate (a 7.5% annual rate would be converted to a decimal and divided by 12; .075/12
so 0.00625)
You will need to plug values into the formula and use the order of operations to calculate the
monthly
payments for the situations below. You’ll also determine the total amount of money the
individual ends up
spending on monthly payments. The difference between this amount and the original price tag is
the interest
on the loan. Help these individuals figure out if the monthly payment fits in their budget and is
worth it to them
in the long run.
‘

Name ___________________________ Date ________________

Jessica is considering borrowing $15,000 for a new Ford Fusion if…
the monthly payment is less than $250 and
the total cost is less than $16,000
Huffington Bank Loan Offer
Loan Amount (c) $15,000
Annual Interest Rate 6.0%
Monthly Interest Rate (r) .005
Number of Months (n) 72
Monthly Payments (P) will be… $
Equation Space:
1. Based on your calculations, does the
monthly payment fit into Jessica’s budget?
Long Term Cost
Number of Months (n)
Monthly Payments (P)
Total Cost (nP)
Interest (nP – c)
2. How much interest is Jessica going to
owe? Will it put her over her goal of
$16,000?
3. Would you recommend this loan for her?
Why or why not?
© Clark Creative Education
Cesar is considering borrowing $8,000 to get hot tub if…
the monthly payment is less than $400 and
he can pay it off in less than two years.
AmeriBank Loan Offer
Loan Amount (c) $8,000
Annual Interest Rate 8.4%
Monthly Interest Rate (r)
Number of Months (n) 24
Monthly Payments (P) will be… $
Equation Space:
1. With this loan, what will the monthly
payment be? Will he be able to pay it off in
less than two years?
Long Term Cost
Number of Months (n)
Monthly Payments (P)
Total Cost (nP)
Interest (nP – c)
2. How much interest will Cesar need to
pay on this loan? How could he reduce this
amount?
Dawne is considering borrowing $35,000 to invest in a local business if…
the monthly payment is less than $800 and
the total cost is less than $40,000
Sixth/Third Loan Offer
Loan Amount (c) $35,000
Annual Interest Rate 4.75%
Monthly Interest Rate (r)
Number of Months (n) 60
Monthly Payments (P) will be… $
Equation Space:
1. With the loan offer from Sixth/Third, is
the monthly payment less than $800?
Long Term Cost
Number of Months (n)
Monthly Payments (P)
Total Cost (nP)
Interest (nP – c)
2. How much interest will Dawne have to
pay on this loan? Will it put her total over
$40,000?
© Clark Creative Education
Jeff is considering borrowing $12,000 to enroll in a semester of college, but he’s
trying to decide between two different bank offers. Which is better?
J.C. Porgan Bank Loan Offer
Loan Amount (c) $12,000
Annual Interest Rate 3.5%
Monthly Interest Rate (r)
Number of Months (n) 72
Monthly Payments (P) will be… $
Long Term Cost
Number of Months (n)
Monthly Payments (P)
Total Cost (nP)
Interest (nP – c)
Silverman Slacks Bank Loan Offer
Loan Amount (c) $12,000
Annual Interest Rate 3.75%
Monthly Interest Rate (r)
Number of Months (n) 60
Monthly Payments (P) will be… $
Long Term Cost
Number of Months (n)
Monthly Payments (P)
Total Cost (nP)
Interest (nP – c)
Calculation Space
1. From your calculations compare the monthly payments of the two banks. Whose
monthly
payment is lower? What is the difference between the loans?
2. When considering the long-term, what are the total costs of the loans from each bank?
Which
bank has a lower total?
3. All things considered, which loan do you think Jeff should take? Explain.
© Clark Creative Education
Marcy is considering borrowing $65,000 to make an addition onto her home. She
has
offers from two different banks and needs to make a decision. She would prefer a
monthly payment around $800 a month, but doesn’t want to pay too much money
in
interest. Which is offer is better for her?
Capital Two Bank Loan Offer
Loan Amount (c) $65,000
Annual Interest Rate 7.5%
Monthly Interest Rate (r)
Number of Months (n) 144
Monthly Payments (P) will be… $
Long Term Cost
Number of Months (n)
Monthly Payments (P)
Total Cost (nP)
Interest (nP – c)
Stanley Morgan Bank Loan Offer
Loan Amount (c) $65,000
Annual Interest Rate 6.75%
Monthly Interest Rate (r)
Number of Months (n) 108
Monthly Payments (P) will be… $
Long Term Cost
Number of Months (n)
Monthly Payments (P)
Total Cost (nP)
Interest (nP – c)
Calculation Space
1. Based on your calculations, compare the monthly payments of the two banks? Whose
monthly
payment is lower? What is the difference between the loans? Do they both meet Marcy’s
requirement?
2. When considering the long-term, what are the total costs of the loans from each bank?
Which
bank has a lower total?
3. Considering the short-term and long-term, which loan do you think Marcy should
take? Explain.