Man Up Managing Resources Activity
Please read the financial scenario and the definitions following it. After reading use the scenario to answer each of the questions below to the best of your ability.
The objective of the activity is to give the young person realistic experience with managing family financial resources and a simple step by step process that could ultimately be used as a model in managing their own resources.
The NOSAW Resource Management Model developed by The Owens Group – Training and Development is used in the activity to provide the framework for resource management.
You may print out the questions (using your browser) and write your responses to them on the same page, but you must complete and submit this activity in a manner satisfactory to your Man Up instructor in order to receive credit for having done the activity. If the activity is not done to the satisfaction of your instructor, you will be required to do it again.
You will not receive credit for having completed the Man Up program without successful completion of the Managing Resources Homework Assignment.
This assignment is due by the end of your fourth and final Man Up class session.
Financial Scenario:
You have a job that pays you $2,000 after taxes on the 1st of each month. Your wife makes $750 after taxes on the 1st and 15th of each month. Your 12 year old daughter needs an extra $200 for her cheerleading outfit and your son needs $150 to replace clothing he no longer wants to wear due to being teased at school. The court has also required that he attend Man Up class at $100 for the month.
The rent payment on your home is $1,100 due on the 1st of each month. Electricity costs $120 this month, but you could only afford to pay half of the $130 electric bill last month and promised to pay the rest this month. You have a cable television plan that requires $120 per month. Each of your four family members has a cell phone and you pay a total of $150 per month for the entire family for cell phone usage. The car note for the truck you drive is $250 per month. The note for your wife’s SUV is $350 per month. Both vehicles need oil changes and maintenance this month costing about $50.00 per vehicle. Your wife normally spends about $150 every two weeks on groceries for the family. You have a credit card that has a credit limit of $10,000 with a minimum monthly payment of $200 but due to the 50” Flat Screen TV you just bought on credit on sale for $3,500 your monthly payment on your credit card will go up this month from $200 to $350 per month. Currently in your savings account you have $1,500 to be used only in case of emergency. You also have a Retirement account worth $30,000 from your job that you can borrow from at 10% interest.
NOSAW Resource Management Model Definitions:
Needs – Expenses that you must have in order to survive. Needs generally include food, clothing, shelter, and transportation.
Obligations – Expenses that you owe to others that if not paid will result in a significant negative consequence. Examples of obligations could include, credit card payments, utilities, etc.
Savings – Money set aside to be used in case of an emergency.
Assets – Money and/or possessions that earn additional money for you without your having to work for it. It is generally associated with money to be used for retirement.
Wants – Expenses that are neither needs nor obligations, but are made purely in order to satisfy one’s desire.
Income – The amount of money you receive into your household budget.
Expenses – The amount of money that will be used to purchase products and services or to pay a debt of some kind.
Step A: Start with the BIG picture. Determine the total amount of money you are responsible for managing, and the total amount of potential expenses to be managed.
1. What is the total household income for the month? $_____________
2. What are the total household expenses for the month? $_____________
3. Is there a budget surplus (more income than expenses) or a budget deficit for the month (more expenses than income)? ________________
Step B: Separate all of the expenses in to the following NOSAW categories:
Needs – Obligations – Savings – Assets - Wants
4. List each of the expenses that would fall into the category of a NEED for the month and the amount of the need. (Example: Rent for the Home - $1,100)
5. What is the total amount of the NEED category for the month? (Add each need you listed above and put the total here.) $____________
6. List each of the expenses that would fall into the category of OBLIGATIONS for the month and the amount of each obligation. (Example: Electricity bill - $120)
7. What is the total amount of the OBLIGATION category for the month? (Add each obligation you listed above and put the total here.) $______________
8. What is the total amount that you would save for the month if you were able to save 10% of your income? $______________
9. What is the total amount of the ASSETS you have available to you? $______________ What is it being saved to be used in the future for? ____________________
10. List each of the expenses that would fall into the category of WANTS and the amount of each want. (Example: Cheerleading outfit - $200)
11. What is the total amount of the WANTS category for the month? (Add each want you listed above and put the total here.) $__________________
Step C: Develop a plan to deal with either a budget surplus (more income than expenses) or a budget deficit (more expenses than income) by making changes in your family’s life style that will allow you to either spend less money, generate more money, or do both at the same time.
12. If there is a surplus for the month, what will you do with the extra money?
13. If there is a budget deficit how will you make arrangements to cover your expenses for the month?
14. List specific changes could be made in this family’s life style to decrease the amount of money being spent each month, and increase the amount of money being saved each month? (Example: Son could stop getting in trouble and the family would spend less on programs like Man UP)