Calculate Your Income: Determine your gross and net annual income. You may use the values provided in the lesson activity. If you prefer, base the values on the current median annual salary in your state and the effective tax rate.
Calculate Your Expenses: Estimate how much you will spend in a full year for each of the categories listed on the budget worksheet provided in the lesson.
Put Your Data Together: Using the same budget worksheet, compile and present calculated income and expenses.
Analyze Your Budget: Determine if you are living within your means. If necessary, find ways to reduce expenses so that they are in line with your income. If you have a surplus, examine whether all of your values are realistic and be sure you considered saving for the future.
Reflecting on This Activity
Teen with hand on chin thinking©
Inspect your budget again, ensuring that all numbers represent yearly costs and that your calculations are realistic and correct. In the title of your budget, please indicate the career path for which you are budgeting. Check that your expenses are fully covered by your income. Save a copy for yourself and for your instructor, and answer these reflection questions:

Why is budgeting important to your life?
Describe your experience with this process. Was it easy, difficult, or somewhere in the middle? What factors contributed to your feelings?
How might the use of credit for a large purchase affect your budget? Discuss which type of credit plan you would use, and how your budget can help you protect your credit score.
What adjustments did you have to make to your budget? How did you decide where to make changes?
Will you begin using a budget regularly now? Why or why not?