My Money

Being financially literate is vital for living a successful life once you finish
school. This assignment will help prepare you for the financial decisions you
will face in the near future.

Learning Intentions

To extend your personal financial literacy skills and better understand the role of
savings and investment.
To demonstrate the skills required to successfully plan and manage personal
finances.
To investigate and solve problems set in a wide range of practical contexts.

By completing this assignment, I will demonstrate that I can:

Produce a budget displaying expenses and savings based on a real-life scenario,

and make sensible financial decisions based on the outcomes.
Research the best bank account for personal use (for everyday money and
savings).
Decide upon the best mobile phone deal based on value for money.
Select a suitable rental property that meets a budget.
Demonstrate reason and logic when making financial decisions.

*I have chosen to go further and show that I can:

Plan an affordable holiday.

Buy a car and budget for the costs (this includes applying simple interest to a real
life problem).

This assignment is due: _______________________

Your work should be collated (in order) and

presented in a display folder.
Clearly mark your folder with your name.

You will have some class time for this assignment. It is an

expectation that you will also complete some tasks at
home as home learning. The whole assignment will take
around 10 hours to complete to a good standard.

Making a Budget
Its the end of year 12. You are 18 years old.
Youve successfully finished VCE and have accepted a place in a Bachelor of
Medicine course at the University of Melbourne.
You have a part-time job at Coles, earning $18 per hour (after tax) and working 25
hours per week.
Two of your friends have also been accepted into the University of Melbourne. You
have decided to find somewhere to rent together. You will most likely rent a place
in North Melbourne, Parkville, Brunswick, Carlton or Fitzroy. You will probably pay
around $100 each per week for rent, depending on the property.
You have a gym membership that costs $35 per month at Jetts Gym.
You have a mobile phone, which you currently spend around $80 per month on.
You know there are better deals out there, and plan to look into them.
As youve never had to pay them before, your parents tell you roughly how much to
expect to pay for utilities. Electricity will cost a house around $200 per quarter. Gas
will cost a house around $90 bi-monthly. Water services will cost a house around
$250 per quarter. Internet connection will cost $30 per month. Remember, there will
be 3 of you to share these costs.
You will be living in zone 1, so you will spend around $25 per week on public
transport.
Groceries will cost you around $100 per week.
Your university fees will be paid through the HECS scheme. You have to buy $250 of
textbooks each year.
You still need to estimate your medical, entertainment, recreation, haircuts and
clothing costs.

What you need to do:

1. Deciding if you want to write a weekly, fortnightly or monthly budget.
2. Estimating the remaining expenses (medical, entertainment, recreation,
haircuts and clothing).
3. Using the information above complete the Budget Planner Excel file.
4. Your budget must include your income and expenses. You should use your
total income minus your total expenses to calculate your balance. This is
how much you will have left to save.

Bank Accounts
This part of the assignment requires you to find the best way to access money every
day and to save money over a long period of time.
An everyday transaction account is a basic bank account. You can usually deposit
and withdraw money as often as you like, whenever you like, and use ATMs to
access your money quickly without the need to always go into the bank.
A savings account is used by people with a significant amount of savings who wish
to earn extra money through interest paid by the bank. These accounts generally
come with conditions such as:
- There must be a minimum amount of money in the account at all times,
- You cannot access the money at an ATM,
- There must be less than a certain number of withdrawals in the month, and,
- You must deposit a certain amount of money each month.
These are just a few conditions to give you some idea. High-interest savings
accounts are very good if you want somewhere to put your savings that is separate
from your everyday money.
A term deposit is a special type of account that you place money into for a
nominated period of time (a term) and the bank pays you a high rate of interest as
a reward. The downside is that you cannot touch this money at anytime during the
term without paying a penalty.

What you need to do:

1. Research the accounts offered by at least three different banks or

financial institutions (e.g. credit unions).
You need to look at the three account-types explained above, and
consider the factors of:
- account type
- conditions (age, minimum amounts, withdrawal conditions, etc.)
- service fees
- interest rates
- number of free transactions
- access to telephone and internet banking
2. Draw up a table to compare the three account-types for the three banks
you chose based on the factors above.
3. Which bank would you decide to go with for your everyday money and
savings? Why?
4. Would you get a term deposit account? Why/why not?

Communication Costs
This part of the assignment requires you to find the best plan for your mobile
phone.
Based on the scenario provided, you currently spend $80 a month on credit
for your phone. This $80 is not a cap and has no special inclusions.
Remember, you want to save money!

What you need to do:

1. Choose the type of phone you want to get.

2. Choose three different mobile service providers, e.g. Telstra, Optus,
Vodafone, Crazy Johns, etc.
3. Draw up a table that compares the following factors for each company:
a. Monthly cost and contract length
b. Minimum cost/minimum spend
c. Plan inclusions
d. Call rates
e. Flagfall/connection fee
f. SMS rates
g. MMS rates
h. Voicemail rates
i. Data inclusions and costs
j. Early exit fees/break fees (check the fine print!)
k. Reception/network coverage (if available you may need to go to
a different area on their website.)
4. Based on your research, which company will you go with for your phone
and why?
5. Do you think that you get better value out of prepaid or a plan? Why?
6. Alter your budget based on your new phone plan decision.

Getting a Rental Property

This part of the assignment requires you to find a suitable rental property for
you and your two friends that is within an appropriate distance from your
university. Remember, you dont want to spend more than about $100 each
per week (total of around $300 per week).

What you need to do:

1. Search www.realestate.com.au for a rental property with accommodation

for 3 people. Suitable suburbs may include: North Melbourne, Parkville,
Brunswick, Carlton or Fitzroy. Make sure it is a place you can afford! Find 3
suitable properties.
2. For each property, write a pros (the things you like about the property)
and cons (the things you dont like) list. Also note down the propertys
address, size, cost and bond.
3. Use your pros and cons list to help you choose a property. When you have
settled on a property, print the property details out.
4. Find the property on Google maps and then get directions to the
University of Melbourne. Print this map.
5. What public transport will you be able to access from your new house?
What will be the easiest way for you to get to university?
6. Alter your budget based on your selected propertys price.

Holiday Time*
This part of the assignment requires you to plan an affordable holiday with the
money you have saved by making smart financial choices.

It is the end of 2017, you have saved your money well, passed uni and you and your
friends are going on a holiday to celebrate. You have decided to leave Melbourne
on the 10th of December.
You would like to spend less than $1500.

What you need to do:

1. Go to www.flightcentre.com.au and take a look at flight costs for some

places that you might like to visit. It is likely that you will only be able to fly
somewhere in Australia with a total budget of $1500. Choose your holiday
destination.
2. Look at the cost of accommodation at your selected destination. Based
on this, decide the dates and length of your holiday. Remember, you
want to spend less than $1500.
3. Research some attractions and activities that you will do on your holiday.
Find out costs for these activities.
4. Estimate the costs of meals, transport and entertainment for your holiday.
5. Put the above costs into a table. Use this table of expenses to decide
whether you can afford to go on this holiday.
Note: for the purposes of this exercise, you will need to put the date in as
December 2014. Also, DO NOT BOOK ANYTHING!!!

Running a Car*
This part of the assignment requires you to explore the cost of running different vehicles and
then draw a reasonable conclusion about which vehicle might be the most suitable for you.

Some important background information on running a car:

Fuel Consumption (litres/100km)

Number of cylinders
Small car
(under 3 litre capacity)
Large car
(over 3 litre capacity)

8L/100km

10L/100km

12L/100km

10L/100km

13L/100km

15L/100km

Maintenance

Tyres are replaced every 50,000km. They average around $100 per tyre.
Oil consumption on a vehicle is about 1 litre per 17,000km. One litre of oil costs
around $13.
Service frequency is every 10,000km at a cost of $300 per service.
General repairs are 2% of the purchase price per 70,000km.
Unexpected repairs are half the general repair price.

Finally, comprehensive insurance will cost approximately $1500 per year (this varies on the
type of car, location and the age of the driver) and registration of the vehicle with VicRoads
will cost $700 per year.

What you need to do:

1. Collect information from newspapers, car yards or motoring magazines about three
different types of cars that you might like to buy. Include:
a. A picture of the car.
b. The make and model of the car.
c. The number of cylinders and cylinder size.
d. The price of the car.
2. Find out:
a. The current petrol prices.
b. The amount of interest paid on the loan (for each car) over five years at an
interest rate of 12.5% per annum.
3. After collecting this information, determine the cost of running each vehicle over five
years if you travel an average of 30,000km per year. Include the purchase cost in this
calculation. (Dont forget the details provided above about maintenance etc.) Give
the total cost of running the car for five years, and then break it down to a yearly,
then weekly value. Show evidence of your calculations. Give your answers to the
nearest dollar.
4. Which of the three cars you selected would be the best for you? Why?
5. What are some of the things you might be able to do to reduce the running costs
associated with owning a car?