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.
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.
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.
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!
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.
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.
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.