My Future Project

In the My Future Project, you will make some decisions and figure some things out about a possible future career path and basic finances. When you are choosing a career, try to find one you think fits you well. Start by creating a new Google Doc. Title it “My Future Project”.

The first thing you will do is decide on a job. Think about the results from your EDP. Check the Occupational Handbook to find the best career for you based on your EDP, and what you know about yourself. Open this example of My Future Project in a new tab. Hit ctrl+A to select the entire document, copy it, and then paste it into your “My Future Project” document. This will be the template you use to complete this assignment.

There are some jobs that provide substantially more income than a typical bachelors degree. Pursuing these degrees in real life require and extra measure of effort. The same will be true in your My Future Project.

Becoming a professional with an advanced degree takes an extra level of commitment. If you want a career as a physician, lawyer, dentist, orthodontist, or any other “professional” degree, you need to fulfill the following extra requirements by February 29:

  • provide proof of all A’s or almost all A’s in middle school so far
  • be involved in at least one extracurricular activity
  • provide 2 typed letters of recommendation – one from a non-family member, and one from a teacher (not Mr. Brumwell). The letters should complete the statement, “why I think (insert your name) would make a good (pick physician or lawyer)”. The letters should include information about your academic performance, ability to manage extracurricular activities and your character in general.

Use these websites for career information
Employment Reference – Employment Outlook Handbook
Employment Reference – Top 100 Jobs  (for ideas)

Basic career information table. This should be at the top of your document (example)

Job Title Civil Engineer
(Link to the Employment Outlook Handbook page)
Level of Education Required – School Bachelor Degree – Virginia Tech
(Search for a College with the applicable degree and link to it)
Starting Salary $50,370
(Check the “Pay” tab on the Employment Outlook Handbook page, find what the lowest 10% earned. That’s your salary)
Name and Location of Employer Mining Hydrologist
215 S State St # 1000, Salt Lake City, UT
(Search for a real job posting in your field. Link to it)
Employment Outlook Employment of civil engineers is expected to grow 19 percent from 2010 to 2020, about as fast as the average for all occupations.
(Copy and paste the first paragraph on the “Outlook” tab from your Employment Outlook Handbook page)
What They Do Civil engineers design and supervise large construction projects, including roads, buildings, airports, tunnels, dams, bridges, and systems for water supply and sewage treatment.
(Copy and paste the first paragraph on the “What they do” tab from your Employment Outlook Handbook page)

 

Post College Finances – Net Income Calculations

Gross Income is the entire amount of money you make.
Net Income is what you have left after you pay your obligatory taxes.

Once you’ve found your dream job, there’s an important detail to consider when you look at the amount of money you earn and begin to plan how to spend it. One of the disappointments of that first paycheck is learning that all the money you make is not yours to spend. You live in a country, state and city that each provide services to you as a citizen. These services are paid with tax dollars. The tax dollars come from you as a wage earning citizen. You will pay income taxes to the federal government, state government and whatever type of municipality you live in (township, city, village, etc.) You will also be required to pay into medicare, social security and possibly have additional money deducted from your pay for retirement savings or healthcare.

The amount you get paid is called your gross income.
The amount you have left after taxes and deductions is your net income. It’s fairly common to pay 1/3 of your gross income in taxes. Net income is the money you get to spend.

For this project, you will calculate your federal income tax, state tax, social security and medicare. Each of these taxes helps pay for a benefit that you have as a U.S. citizen. Federal tax helps pay for our military. Read this article at National Priorities to get a more clear picture of what the U.S. Federal Government spends its money on. Federal tax rates are as follows:

  • 10% on taxable income from $0 to $9,075, plus
  • 15% on taxable income over $9,076 to $36,900, plus
  • 25% on taxable income over $36,901 to $89,350, plus
  • 28% on taxable income over $89,350 to $186,350, plus

Actual tax and budget calculations will be done using a Google Sheet. Go to Google Classroom and find “My Future Budget”. Going forward, there are 7 line item costs from your “My Future Project” that you need to transfer to your “My Future Budget”. These line items will be pointed out.

Add your gross pay to cell E2.

Add your state tax rate to cell D13.

Use the Social Security and Medicare calculator below to find your FICA amount. Add that amount to cell E15.

Cell E18 should be your yearly net income. Place the formula =E18/12 in the cell E19, to calculate your monthly net income.

Read about and calculate your effective federal tax rate
State Tax Rates
State Tax Revenue Graph
State Tax Revenue Table

What is FICA (the Federal Insurance Contributions Act)
What is Social Security?
What is Medicare?
Social Security & Medicare calculator

Paycheck Calculator

Once your calculations and spreadsheet are done, add your income and tax information to your My Future Project doc. Copy and paste the text below and replace the all the blue text and numbers with your own calculations. When you are finished, change all text back to black.

A Civil Engineer makes $50,370 as a starting salary and my single person tax rate is 25%.
I pay $12,592 per year in federal income tax.

My monthly salary is $4179.50
I pay $849 per month in federal income tax.
I pay $346 per month in state income tax.
I pay $214 per month for social security and medicare.
Total monthly deductions are $1,409

Monthly salary, $4179.50, minus monthly deductions, $1,409, leaves a monthly net income of $2,770.50

This leaves me a monthly net income of $2,770.50. This is roughly equivalent to $693 per week.

College Debt (My Future Budget – Sheet2, cell E6)

The second biggest thing to put a dent in your budget is your college loan. If you are average, you will graduate with a college loan of $29,400 (this will be different if you have a professional degree). You may have generous parents who will pay for your entire college career. You may get a full ride with some sort of scholarship. For your My Future Project, we are going to assume that you will leave college with some debt. Your college debt will be equivalent to 50% of your yearly gross income.

You need to calculate a payment plan to begin paying down that debt. You can choose a lower monthly payment and have more money right now, or you can pay it off quicker and pay less interest in the long run.

Use this calculator to figure out how much you want to pay each month. Your interest rate is 6.5%. Your minimum payment is $175. You maximum payment is whatever you can afford. In your My Future doc, write a sentence like the one below describing your debt and repayment plan. Write up how much college debt you have, and what your payment plan is. Write it up like this and include it under “College Debt” on your My Future Project. Again, replace the blue text with your own numbers, and change all text to black.

My college debt is $29,400. According to the loan calculator, if I pay $350 per month on my student loan, I will pay it off in 9 years, 5 months with a total of $9,926 paid in interest.

Housing (My Future Budget – Sheet2, cell E7)

Next, figure out how much you want to spend on housing. A good rule of thumb is to allocate 20% (very conservative) to 35% of your net income to housing. If you plan to buy, another rule of thumb is to find a house that costs 2 to 3 times your gross income.

http://www.oecdregionalwellbeing.org/region.html#US26

In the My Future Project, we will assume that you are beginning your career and choose to rent a place to live. You can choose a house, condo or apartment. You need to find a place to somewhere near where you are going to work. Once you find a place, type the name and address in your My Future Project, and insert a hyperlink to the rental listing. Next, go to Google Maps to calculate how far you have to drive to get to work. Use the snipping tool to capture the addresses and a picture of the map. Insert these into your My Future Project.

Transportation (My Future Budget – Sheet2, cell E8)

Time to find your first car. You will be taking a loan out, so you will need to be reasonable about the kind of car you buy. To find a car, search AutoTrader.com. You could also check “used car dealership” followed by the city or state you plan to live in.

Once you find a car you like, use the Bankrate Auto Calculator to figure out your loan payment amount.

Should I Buy a New or Used Car – or Lease?

bankrateauto

 

Add the following transportation information to your Google Doc if you plan to buy a car:

  • Year, Make and Model of Car
  • Cost
  • Monthly Payment Amount
  • a picture of the car, and a link to website you found it on

It should look like this in your My Future Document:

Car Year, Make and Model                2000 Honda Civic EX 2-door
Cost                                $6,000
I borrowed $6,000 for 3 years and 10% interest.
Monthly payment                        $194

Some people may choose public transportation. If you want to use public transportation, you have to 1)confirm that it exists in the are you live in, 2)confirm that there is a route close to your home and work, and 3)add a link to your Google Doc for the page with fare prices.

Add the following transportation information to your Google Doc if you plan to use public transportation:

  • a link to show that public transportation in you city includes a route that will get you from home to work
  • a link to the cost page

Savings (My Future Budget – Sheet2, cell E9)

There are some people who suggest saving 10% of your income and giving 10% away to a good cause. Some call the latter a tithe. Other’s call it a charitable donation. If you want to give away part of your income to a church or other cause that’s fine, but first, pay your future self. Look at what you have left from your net income, and calculate 10% of that amount. Divide the number by 12. Add a line on your Google Doc:

  • Savings per Month(and write the amount)

If you want to save more, or donate somewhere, indicate so on your Doc.

Activity 3 – My Future Budget

Generic Monthly Cash Flow Plan

Open up the Spreadsheets Document on Google Classroom.

Add your yearly income to cell E2.

Change cell B12 to the name of the state you will live in.

Change cell D12 to the state income tax rate for the state you choose to live in. Click on the State Income Tax link in cell C12 and then click on your state to find the state tax rate. Remember the percent symbol.

Click on the FICA link in cell A16. Use the Social Security and Medicare Contributions calculator to find your FICA contribution. Type your yearly gross salary in the salary box. Click “Calculate”. Your FICA amount is listed beside “Employee’s Half”. Add that amount to cell E16. Notice your yearly and monthly net pay is calculated on line 20. This is the amount of money your have to spend on living.

Click on sheet 2 at the bottom of the spreadsheet.
About delayed gratification and financial success