Budget Case Study

Welcome to the Money Moves Challenge!

Today, you are stepping into the role of financial strategist to help a family make smart financial choices. Your aim is to guide them in budgeting, saving, investing, and spending wisely to secure their financial future.

This lesson is provided by Sea Shepherd.  Sea Shepherd was founded in 1977 and is a marine conservation organisation working to protect the oceans and marine wildlife.  Sea Shepherd works globally on a range of issues impacting the oceans, running numerous direct action campaigns each year. 

Meet the Carter Family

- **Parents:** Mr. and Mrs. Carter  

- **Kids:** Jordan (13) and Maya (10)  

- **Income:** $85,000 per year (combined salary)  

- **Living Situation:** Renting a townhouse ($1,900 per month)  

- **Savings:** $6,000 in the bank  

- **Monthly Bills:** $4,800 (rent, food, utilities, car payment, and family expenses)  

- **Debt:** $7,500 from a car loan (they pay $350 per month) 

This lesson is provided by Sea Shepherd.  Sea Shepherd was founded in 1977 and is a marine conservation organisation working to protect the oceans and marine wildlife.  Sea Shepherd works globally on a range of issues impacting the oceans, running numerous direct action campaigns each year. 

The Carter Family’s Goals

- **Take a family vacation next summer**

- **Save for Jordan and Maya’s college education**

- **Invest in their 401(k) for retirement**

This lesson is provided by Sea Shepherd.  Sea Shepherd was founded in 1977 and is a marine conservation organisation working to protect the oceans and marine wildlife.  Sea Shepherd works globally on a range of issues impacting the oceans, running numerous direct action campaigns each year. 

Your Challenge: Be Their Money Moves Coach!

  

Your team will help the Carter family make smart money moves. Work through the following steps to develop a financial plan that fits their needs.

This lesson is provided by Sea Shepherd.  Sea Shepherd was founded in 1977 and is a marine conservation organisation working to protect the oceans and marine wildlife.  Sea Shepherd works globally on a range of issues impacting the oceans, running numerous direct action campaigns each year. 

Step 1: Budgeting - Managing Their Money

1. How much money do they earn each month? How much do they spend?
2. If they want to save more money, what expenses could they cut back on?
3. What spending habits might be unnecessary or excessive?

Step 2: Saving for the Future

1. Right now, they have $6,000 in savings. How can they increase their savings?
2. If they want to take a vacation next summer, how much should they set aside each month?
3. Why is saving money important for unexpected situations?

Step 3: Investing for the Future - 401(k) Strategy

The Carters want to start investing in their 401(k) for retirement. They can choose from the following stock options:

This lesson is provided by Sea Shepherd.  Sea Shepherd was founded in 1977 and is a marine conservation organisation working to protect the oceans and marine wildlife.  Sea Shepherd works globally on a range of issues impacting the oceans, running numerous direct action campaigns each year. 

The Harris family wants to start investing in their Roth IRA for retirement. They have several diverse investment options to choose from. Here are some stocks and sectors to consider:

 • VTI (Vanguard Total Stock Market ETF) - Provides exposure to a broad range of U.S. companies across various sectors.

 • BND (Vanguard Total Bond Market ETF) - A well-rounded bond fund for long-term stability.

 • SPY (SPDR S&P 500 ETF) - Mirrors the performance of the S&P 500 Index, ideal for growth.

 • VYM (Vanguard High Dividend Yield ETF) - Focuses on companies with strong dividend payments.

 • SCHD (Schwab U.S. Dividend Equity ETF) - Invests in high-yielding, stable companies for long-term income.

 • ARKK (ARK Innovation ETF) - Focuses on high-growth industries like tech and innovation

 *NVDA** (NVIDIA) - AI and computer chip technology.  

 **AAPL** (Apple) - Phones, computers, and tech innovation.  

This lesson is provided by Sea Shepherd.  Sea Shepherd was founded in 1977 and is a marine conservation organisation working to protect the oceans and marine wildlife.  Sea Shepherd works globally on a range of issues impacting the oceans, running numerous direct action campaigns each year. 

Step 3: Investing for the Future - 401(k) Strategy

The Carters want to start investing in their 401(k) for retirement. They can choose from the following stock options:

**Discussion Questions:**
1. Which three stocks should the Carters invest in and why?
2. Should they focus on high-growth companies or stable, long-term investments?
3. How should they balance their 401(k) contributions between stocks and bonds?

Step 4: Smart Spending Choices

1. If the Carters want to save more, should they cut out all fun spending (like dining out, shopping, or entertainment)?
2. How can they balance enjoying life while still making smart financial choices?
3. What advice would you give them on spending wisely?

Final Challenge: Create a Money Moves Plan!**
Your team will develop a financial strategy for the Carter family. Be sure to address:
- How much they should save each month.
- Adjustments they should make to their budget.
- How they can still enjoy fun activities while being financially responsible.
- The best stock choices for their 401(k) and why.

Now, each team will present their financial plan and explain their decisions.

Money Moves Vocabulary

- **Budget**: A plan for how to earn, save, and spend money.  

- **Savings**: Money set aside for future needs.  

- **Debt**: Money borrowed that must be repaid (e.g., loans, credit card debt).  

- **401(k)**: A retirement savings plan that grows through investments.  

- **Stocks**: Shares of ownership in a company that can increase or decrease in value.  

- **ETF** is a collection of assets that trades on a stock exchange. ETFs are a popular way to invest in a variety of assets, including stocks, bonds, and commodities. 

- **Needs**: Essential expenses (food, housing, utilities).  

- **Wants**: Non-essential purchases (vacations, luxury items, entertainment).

This lesson is provided by Sea Shepherd.  Sea Shepherd was founded in 1977 and is a marine conservation organisation working to protect the oceans and marine wildlife.  Sea Shepherd works globally on a range of issues impacting the oceans, running numerous direct action campaigns each year.