ARE 142

Personal Finance
Fall 2016 - Heather Rose
Homework 1 A&B: Income and Expenditure Statement (Oct 1-Oct 31)
DueDatePartA(EstimatedExpenditures):Thursday,October29
DueDatePartB(ActualExpenditures):Thursday,November10

Goal:
Thepurposeofthisassignmentistotakestockofyourfinancialhealthbytrackingallofyourincome
andexpendituresforthemonthofOctober.Youwillthenanswerafewshortquestionsaboutyour
spendinghabits.Althoughcollegeisauniquetimeoflifewhenyoumaybespendingmuchmore
moneythanyouareearning,understandingyourspendinghabitsnowwillprovidesomeinsightsinto
yourrelationshipwithmoney.Youwillalsohaveatooltoperiodicallyconductasimilaranalysisonce
yougraduate.

Grades:
Thisassignmentisworth40pointsoutof100totalpossiblehomeworkpoints.
Overall,homeworkmakesup10%ofyourgrade.
Youwillbegradedonwhetheryoucompletetheassignmentwithanhonestefforttotrackyour
expenditures.Youwillnotbegradedonhowyouspendyourmoney.Forexample,youwillnot
losepointsforspending$1,000thismonthoncoffee.

PartA(DueOctober1onCanvas):

1. BySeptember29,estimatewhatyouwillspendfromOctober1throughOctober31ineachofthe
categoriesoninIncome/ExpenditureStatementonpage2.Youwillnotbegradedonhowaccurate
yourestimatesare,justthatyouestimate.

2. EnteryourestimatesonCanvasintheQuizzessection.Youshouldwritethesedownaswellfor
yourownrecordsasyoumayNOTbeabletoretrieveyourestimatesfromCanvas.Youcanuse
page2.

PartB(DueNovember10onCanvas):

1. KeeptrackofallyouractualincomeandexpensesineachcategoryfromOct1throughOct31.

2. ByNovember10,enterthetotalforeachcategoryonCanvasintheQuizzessection.

3. Canvaswillalsocontainadditionalquestionsforyoutoanswer.Forexample,wereyousurprisedby
yourspendinginaparticularcategory?Pleasedescribeyourbiggestoneortwosurprises.What
percentofyourincomedoyouspendonfood?Onhousing?Computeandevaluateyourmonthly
livingexpenseratioandyoursavingsratio(seeCh.2).Howmightmodifyyourspendinginthe
future?

Note:Onpage5thereisaspendinglogyoucanusetokeeptrackofyourexpenditures.Thisisfor
yourbenefitonlyandwillnotbecollected.

Assignment 2
ARE 142 Personal Finance

Income/ExpenditureStatement:October1October31,2015
Estimates

Actual

**

**

**

**

**

**

Income (After-tax)
Salary/wages/self-employment
Investment income
Cash/gift from family/friends (non-repayable)
School loan payments to you
Scholarship and fellowships
Other
Total
Expenditures (fixed, necessities)
Housing
Rent/mortgage/property taxes
Utilities (PG&E, water, garbage)
Maintenance, improvements, landscaping
Phone (land line and cell)
Cable and internet
Insurance (renters or homeowners)
Other (furniture, appliances, etc)
Food groceries/meal plans (dining out is below)
Education
Tuition/fees
Supplies, books, calculators, computer
Loan payments to lender
Transportation
Bike expenses (purchase, repairs, maintenance)
Public transportation
Car loan payments or purchase
Vehicle repairs & maintenance
Gas, tolls, parking
Insurance
Registration
Medical and Dental Insurance
Insurance Other (e.g., Life, disability, umbrella)
Credit card finance charge
Other major category _________
Total
Expenditures (variable, optional, fun money)
Charitable contributions
Clothing and Personal Care (e.g., hair care)
Dining Out (restaurant, beer, coffee)
Entertainment (concert, CD, movie, sport event)
Gifts
Gym memberships, sporting goods
Hobby
Pets
Vacations/travel
Other major category ___________
Total
Savings and Investing
General savings account
Emergency fund
Retirement (401K, Roth, 403B)
House
Car
Wedding
Other
Total

Note:AnexcelsheetisalsoavailableonCanvas.
Assignment 1
ARE 142 Personal Finance


General Points for Categorizing Income and Expenditures

1. AlthoughIhopeyoukeepthisspreadsheetandmodifyittofityourneedsinthefuture,forthe
purposeofthisclass,pleaseusethecategoriesthatarelistedsoIcancomputesomemeaningful
summarystatisticsfortheclass.Iwillnotdivulgeanyindividualspendingamounts,onlyamounts
thatpertaintolargenumbersofstudentssoyoucanseehowyoucomparetotheclassaverages.

2. Ifyouareuncomfortableturningininformationaboutyourincome,youmayleavethatportion
blank.Iwouldpreferthatyouleaveitblankratherthanmakeupnumbers,becauseIwillreport
averagevaluesbacktotheclassandIwouldlikethosetoberealistic.

3. Itdoesntmatterwhetheryoupaywithcash,check,orcreditcard,ifyouboughtsomethingduring
thistimeperiod,includeitasanexpense.

4. Expendituresaredividedupintotwogroups:fixedandvariable.Inpart,Ididtothisreflecttheway
SethidividesupincomeinChapter4.So,althoughgroceriesareincludedinfixed,diningoutis
includedinvariable.

5. Someofthefixedexpenditureshavesubcategories(e.g.,housing,education,andtransportation).
Forthosethreecategories,youonlyneedtoinputdataforthesubcategories,notthemain
categories.Ihaveinput**inthecellswhereyoudonotneedtoaddyourowndata.

6. Youmaynotactuallyhavealltheseexpenses.Forexample,iftherentyoupayincludesinternetand
cable,youcanentera0forthecableandinternetline.

7. Ihavenotincludedmedicalexpenseslikecopays,prescriptiondrugsandmedicinessothatyou
wouldnotfeelcompelledtodivulgesensitiveinformation.Forfutureuse,youmaywanttoinclude
suchacategoryforyourownreference.

8. Foryourfutureuse,youmightalsoliketoincludeaseparatecategorycalleddebtreduction.

9. Ifyourparentsorascholarshippaysforyourtuitiondirectly,includethatasbothincomeandan
expenditureintheappropriaterows.

10. ForcategoriesinwhichyoudidnthaveanyactualincomeorexpendituresinOctober,butyouhave
actuallyearnedorspentmoneyinthatcategoryearlierthisyear,includetheportionofthat
attributabletoOctober.Thiswillhelptakeaccountofthelumpinessofsomecashflowtoprovidea
betterexampleofwhatanaveragemonthofincomeandexpenditureslookslikeforyou.Hereare
someexamples:

YourparentsgaveyoucashattheendofSeptembertocoveryourexpensesforOctober,
November,andDecember.Dividethatsumby3togettheportionattributabletoOctober.

Similarly,divideyourFalltuitionpaymentby3togettheportionattributabletoOctober.

IfyouusuallypayyourannualcarregistrationfeesorinsuranceinAugust,dividethosefeesby
12togetanaveragemonthlycostandattributethatmonthlycosttoOctober.

Assignment 1
ARE 142 Personal Finance

SpecificPointsforIncomeandExpenditureCategories

Income:

1. Salary/wages/selfemployment:Thisincludesyourpaycheck,tips,earningsfromselfemployment
(e.g.,babysitting,tutoring,etc.)Usetheaftertaxamountifyouknowwhatthisis.

2. Investmentincome:Earningsfrominvestmentsinstocksandbonds.

3. Cashfromfamily/friends(nonrepayable):Thisisgiftmoneyyoureceivedfromsomeoneelse.For
example,includeincomeyourparentsgaveyoutocovertuition.Includeithereeveniftheypaidit
directlytoUCD.Youwillalsoincludethetuitionasanexpenditure.

4. Schoolloanpaymentstoyou:Moneyyoureceivefromabankorgovernmentorfamily.Anymoney
youaregoingtoberequiredtopayback.

5. Scholarshipandfellowships:IncludethismoneyevenifitwaspaiddirectlytoUCDavisforyour
tuition.Ifwasmoneyintendedtocoverthefallquarter,justinclude1/3ofit.

Expenditures:

6. Rent:Includeyourportionofanyrentdue.(Ifyourroommategivesyoucashfortheirportionof
therentandthenyouwriteacheckfortheentireportion,justincludeyourshareoftherent
expensesanddontincludethecashfromyourroommateasincome).

7. EducationTuitionandFees:Includejusttheportionofyourtuitionandfeesattributabletotheone
monthwearecovering.Youmaydividethequarterstuitionandfeesby3toarriveatthisamount.

8. Ifyouliveathome,accountforyourshareofexpenditures.Determineafairmarketvalueforyour
rent.Includeyourshareoffoodexpenses.Then,ifyourparentsarepayingforthosethings,include
thatamountascashincomefromyourparents.Reminder:Thegoalistoseehowexpensiveyou
are,regardlessofwhoispaying.

9. Textbookexpensesforthequartercanbedividedbythree.

10. Yourannualcarregistrationandautoinsurancecanbedividedby12togetanaveragemonthlycost
sothatyoucanattributethoseexpensestothemonthwearestudying.

Savings:

Note:SavingsrefertoamountyoucontributedtoasavingsaccountduringOctober.Itdoesnotreferto
youractualsavingsaccountbalance.Itshouldbethedifferencebetweenwhatyouearnedand
whatyouspent.

11. Generalsavingsaccount:Thisisasavingsaccountwhereyoukeepmoneythatyouhavenot
explicitlyearmarkedforaparticularpurpose.Ifyouhavesavedyourmoneyforaparticular
purpose,pleaseenteryoursavingsintheappropriatecategoryinstead.
Assignment 1
ARE 142 Personal Finance


Spending Log: October
Date
10/16/13
10/17/13

Amount
3.10
1.29

Item Purchased
Coffee
Song at i-tunes

Category
Dining out
entertainment

Assignment 1
ARE 142 Personal Finance