Jenny's Budget
Garrett Siegman
Scenario 3
Jenny went to college for two years, and then dropped out. Unfortunately, by the time she dropped out of college, she had $20,000 in student loans with an interest rate of 6.80%. She has been working as a bank teller for the last three years. Her salary is $30,000. She also has a car payment of $400 per month. She is excited to buy her first home.
Rationale
Monthly income after taxes is: $1,750
Monthly expenses include:
Student Loans: $615.71
Transportation: $400
Food: $80
Gas: $40
Car Insurance: $100
Utilities: $40
Cell phone: $30
Entertainment costs: $40
Yearly income after taxes is: $21,000
Yearly expenses include:
Student Loans: $7388.52
Transportation: $4800
Food: $960
Gas: $480
Car Insurance: $1200
Utilities: $480
Cell phone: $360
Entertainment Costs: $480
My House
Cost of House: $84,900
Minimum monthly payment: $398.50
Interest rate on loan: 3.86%
No down payment
First Year Amortization
If the monthly payment is increased by 15%, making it $458.28, it would decrease the amount of time to pay off the loan by about 6.5 years. This would Jenny $14,225.04.
References
Keller Williams Realty Partner. (14 February 2016). Reece and Nichols. Retrieved from http://www.reecenichols.com/homes-for-sale/4216-Merriam-Drive-Overland-Park-KS-66202-168182772#_