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

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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

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First Year Amortization

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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#_