Goodwill Financial Worksheet Misses a Few Things

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Goodwill Financial Worksheet Misses a Few Things

A friend of mine recently posted a worksheet her son had completed for a financial literacy program offered by Goodwill of the Valleys.  I was impressed with the detail of the sheet; even so, it missed a few things and made a few assumptions I thought worth noting – especially because they misstated the full cost of transportation.

Here is the worksheet:



It’s actually a pretty well done breakdown of average monthly expenses, and as a general exercise I think it’s actually pretty valuable, accurate transportation expenses or no.  That said, I wouldn’t be doing my job if I didn’t dig in a little deeper and show where I think the worksheet misses the mark.  So, here’s a breakdown, point by point:

  • Notable, the Vehicle Payment line item doesn’t allow for not owning a vehicle.  This isn’t the hugest offense, of course, since going car-free isn’t an option in a lot of cases, but in terms of a financial exercise it would have been interesting to include “Bus Pass” as an option.  In Roanoke, that would have taken the monthly payment listed from $487 to $48 for a monthly Valley Metro pass.  Quite a drop!  Regardless, this could have gotten kids thinking a bit more about this cost if owning a car wasn’t an assumption – particularly since the kid filling this out is following a generation that is the least likely in recent memory to buy a car.
  • The worksheet does include auto insurance, which is great!  But broken out in a general insurance category doesn’t sufficiently reflect that auto insurance cost is a function of at least two things: a) what kind of vehicle you drive and b) the amount you drive.  It’s not a flat cost.  So a less-flashy vehicle that you don’t drive very much won’t cost as much as a flashier vehicle you drive every day.  This exercise lists auto insurance at $140 a month, or $1,680 a year.  That rate is about 3x what I, personally, pay, and part of what keep my payment fairly low is that my annual mileage is significantly reduced by the amount if bike commuting I do.
  • Where’s the fuel cost?!  Vehicle ownership isn’t just about the car payment and insurance – fuel and maintenance are significant monthly costs that are also tied into vehicle type and how much one drives.  This number is missing altogether.  Depending on commute distance and gas prices, this item alone could hit $75 to $100 a month.  In addition, while personal property taxes are included (it appears) for the car, other expenses like registration, inspection, etc., are missing.  These are, granted, small costs when averaged monthly, but they do add up.

If Goodwill really wanted to get a fair handle on budgeting for transportation, it would do two things: include the missing fuel and maintenance cost, and group all of these under a single “transportation” heading.  Unlike, say, a mortgage or health insurance, transportation costs are not fixed.  They are a function of behavior – in short, how much we choose to drive will drive all of these costs up, while using other options will bring them all down.

Now, forgetting my quibbles here, let’s look at the worksheet as its presented.  If you add up the monthly vehicle related expenses – car payment, insurance, and property tax – you get a monthly total of $677 (I’m assuming the $50 item under Property Tax is the car tax).  Notice something?  Even missing the other elements, that $677 is second only to food on the sheet.  More than housing, more than health insurance.

In real life, transportation related expenses generally account for the single largest expenditure after home ownership expenses.  Most families spend more on owning and operating a vehicle than that do on food, on health insurance, on leisure, on anything else.

As an exercise in budgeting, this is a great start.  But the underlying assumptions it presents – primarily, that “transportation” defaults to “driving a car” – both skew and understate the expenses involved.  Next time around, or perhaps with an older group of students (maybe a group on the verge of getting their drivers licenses), Goodwill could consider updating the form to reflect the true cost of driving.

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