Question

This budgeting project is to provide you with experience in developing a budget.

This budget should be two pages long, with the first page a printout of the budget using Excel software (or other spreadsheet software) and should include a 12 month budget. The second page should provide a description of the budget items included on the first page with a discussion of your goals and how you intend to allocate your salary.

Imagine yourself at some point in the not-so-distant future when you are starting your career. Search for entry-level jobs that you will be interested in and provide a brief summary of the job, the location (city/state) where the job is and the salary you will be earning from the description (use the average salary for positions if you do not see a salary included with your identified job). Based on that information, create a monthly budget for 12 months (1 year). For this budget, you may assume that taxes (income, federal, ss, etc) total 20% of your salary. While this may differ in reality, I want you to think of your financial goals and include them in your budget.

Based on your intended job identify your intended future list your expenses (rent, car, loans, debt, etc) and fund each one from your salary. You may have to do some additional research to determine the recommendations for how much of your budget should go to rent, car, etc. If it is not reasonable you will lose points.

Include a final column at the end of your budget with a percentage of how much of your budget is composed by each item that you have identified.

Include a short discussion on page 2 regarding your goals and how effective you will be at meeting them and what you learned from this project.

Answer 1

Budget for 1 year

	Salary in INR	Tax @20%	Income net of tax		Rent	Car EMI	Entertainment	Food	Other		Total expense		Income after expense(Savings)	Expenses as a % of Income
1	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
2	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
3	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
4	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
5	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
6	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
7	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
8	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
9	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
10	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
11	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
12	70000	14000	56000		12000	10000	2000	6000	5000		35000		21000	50%
	840000	168000	672000	0	144000	120000	24000	72000	60000		420000		252000

Savings of 21000 p.m. will be invested @ 8% (normal rate of interest prevailing in India)

Total

Notes

Salary per month is taken as INR-70000 for a newly qualified chartered Accountant in New Delhi (India)

The expected job will be in field of Finance or Audit.

Car EMI is taken at 10000 p.m for a 5 year loan for car worth 4,00,000.

Financial goals are to

1. Buy income generating assets (like real estate which generates rental income). Savings will be used for down-payment.

2.to buy own house. Once the above asset start generating income after expenses, a part of it can be used for buying the house.

From this I learned we should invest in assets which generates income, which should be used for buying luxuries