Suppose you could look into the future and are shown three pathways: a career with only a high school diploma, career with a college degree, and a career with a doctorate. Choose one career from each of the pathways.
Living comfortably requires steady income. Based on your choices, the average hourly wage is given below in the table. Determine your monthly (~170 hours/month) and yearly income. (You may use a calculator for this assignment.)
Career | Hourly Wage | Gross Monthly Income |
Gross Yearly Income |
---|---|---|---|
(Poverty Level: 1 Person) | - | $1073 | $12880 |
Diploma Pathway | |||
Degree Pathway | |||
Doctorate Pathway | |||
(Successful Fortune 500 CEO) | $5500 |
No one likes to pay taxes. But it's required to pay for some of the most basic services within our communities such as public schools, fire departments, libraries, etc. As a worker, you must pay state and federal income tax (depending on the state you live in). For simplicity, the table below lists the tax rate for each income level. Calculate the amount of Tax Paid, the Yearly Net Income and the Monthly Net Income. Fill in the appropirate spaces. Round to the nearest dollar.
Career | Tax Rate | Tax Paid | Yearly Net | Monthly Net |
---|---|---|---|---|
(Poverty Level: 1 Person) | - | $12880 | $12880 | $1073 |
Diploma Pathway | 12% | |||
Degree Pathway | 22% | |||
Doctorate Pathway | 32% | |||
(Successful Fortune 500 CEO) | 37% |
Almost everything costs money. The following is a table listing some of the most common expenses for a typical person living on their own. Fill in what you think you would spend (to the nearest dollar) each month for each category. Let's assume you'd like to live "comfortably", not just the bare minimum to get by and not lavishly. Then calculate the your total expenditures. (Have your one of your parents/guardian help with this part.)
Monthly Expenses | Amount ($) | % of Budget |
---|---|---|
Rent/Mortgage | ||
Utilities (Electricity/Phone/Internet) | ||
Insurance (Home/Auto) | ||
Food (Eating In/Eating Out) | ||
Entertainment (Movies/Games/Gifts) | ||
Transportation (Gas/Metro) | ||
Personal Care Items | ||
Savings | ||
Charity | ||
Total: |
Determine the proportion each category takes of your total budget. Round your answer to the nearest tenth of a percent.
Expenses eat up money we earn. Determine the proportion of income that expenses take up each month (round to the nearest tenth of a percent). Then determine how much disposible income (money left over after all expenses) for each level of income (disposable income can be negative). Round disposable income to the nearest dollar.
Career | Monthly Net Income |
Monthly Expenses* |
Percent (%) of Monthly Income |
Disposable Monthly Income ($) |
---|---|---|---|---|
(Poverty Level: 1 Person) | ||||
Diploma Pathway | ||||
Degree Pathway | ||||
Doctorate Pathway | ||||
(Successful Fortune 500 CEO) |
Unfortunately, there are negative financial impacts that happen outside our control. For instance, inflation, income tax increases, accidents, illnesses, and theft are some examples that affects everyone negatively. Suppose that inflation in the US is up around 9% from the year before and you also had a negative event that costs an additional $6,000 (~$541/month paid off in a year at 15% interest). Calculate the new expenses for each income level. Then caculate the new disposable income (disposable income can be negative). Round all values to the nearest dollar.
Career | Monthly Net Income |
Monthly Expenses |
Inflated Expenses + Financial Shock ($) |
Disposable Income ($) |
---|---|---|---|---|
(Poverty Level: 1 Person) | ||||
Diploma Pathway | ||||
Degree Pathway | ||||
Doctorate Pathway | ||||
(Successful Fortune 500 CEO) |
Based on this your findings, for which career pathway would someone experience the least negative impact from a financial shock? For which career pathway would someone experience the most negative impact from a negative shock? Describe what types of negative impact (besides financial) a person who does not have a high income may go through when there is a financial shock? (Think emotion, health, social, etc.) Answer in at least three complete sentences.
Financial shocks are stressful. What are three specific things you can do if your expenses exceeds your monthly net income? Answer in at least three complete sentences.
We're taught at a young age to start saving. How would contributing each month into a savings account help to mitigate a financial shock? Explain in at least three complete sentences.
Facts about career pathways (and finances):