Question

The Director/Owner is considering opening a new School in Lakewood NJ. Concerned that the cost of living in Lakewood will not allow for the hiring of employees at cost effective rates the Director/Owner has asked you to determine the rate at which new teachers should be paid to support a “living wage” in the immediate area. To support your decision, the Director/Owner has asked that you prepare a personal budget for a hypothetical employee living in Lakewood or the surrounding communities. Your budget should identify what the yearly salary needs to be for such an employee to meet all of their living expenses. The CEO would like to hire young energetic tellers and to reflect that has asked your budget reflect the following assumptions:

1) Single with no children and between the ages of 21 and 30;

2) Renting a place to live;

3) Drives a used car that is paid off completely;

4) Lives in Lakewood or a city bordering it;

5) Will participate in the company health plan at a cost to the employee of $100 per month (18% paid by employee 72% paid by company); and

6) No student loan debt or revolving credit debt. You may make any additional assumptions you feel needed to prepare a full and complete personal budget for the expected employee. This includes the payment terms for, rent, food costs, other insurance costs, etc. Your assumptions should be reasonable. Any assumption that invalidates the assignment is unreasonable. Your assumptions and calculations should be supported with a source using footnotes

Answer 1

Living Expenses	USD Cost Per Month	Assumption
Rent of Housing	$      2,000	Avg Single Bed Housing CosT
Utilities	$          400	Utilities cost for heating and Cooling
Food and Groceries	$          750	All Groceries and Kitchen essentials
Transportation - Fuel Cost	$          300	1 Lt Gasoline with 10 KM mileage - 20 KM per day for 20 days a month for Office + Other Travel
Clothing	$          200	2 Pairs clothing OR shoes buyout OR other misc clothings
Entertainment	$          300	Weekend Entertainment
Restaurant	$          200	4 Eating Out assumed in a month
Misc Repairs	$          300	Vehicle and Home Repairs
Health Insurance	$          100	Provided by Company - Cost to Company
State Taxes	$          235	4.7% Tax Rate assumed
Federal Tax	$          500	10% Tax Rate assumed
Minimum cost of Living	$      5,285

No savings is assumed in this Budget. Savings is discreational and differs from individual to individual.