# Money Saved, Home Earned

## My name is Kaylee Sturgis, and I am creating a financial living budget for myself in order to obtain a successful life.

Let me share about my current living situation. I am single, and I earn a yearly salary of \$50,000 per year. I did not attend college, and my current profession is a construction foreman. I recently purchased a \$23,000 car, with a 6.50% 5 year car loan. I am planning on buying my first home in the next few months, and want to be sure I am financially stable enough to do so.

## First, I began my mathematical process of determining the financial aspects of my life by reviewing my monthly spending.

I determined that after taxes (30%), I earn \$35,000 per year. I then calculated what I earn per month, which is \$2,916.67. This number will be used to balance my monthly spending into a budget. I calculated this in this fashion:

1. \$50,000 (yearly salary) - \$50,000(.30)= \$35,000

2. \$35,000 (salary after taxes)/12= \$2916.67(affordable monthly amount)

AFFORDABLE MONTHLY AMOUNT: \$2,916.67

## Next, found the sum of my monthly cost pertaining to personal items and expenses.

I added together the costs of all of the items that would impact the amount of money subtracted from my affordable monthly budget. These items include:

1. Car payment (\$450.02)

2. Food (\$200)

3. Gas (\$60)

4. Home phone (\$6.25)

NOTE- By choosing to use a home phone instead of a cell phone, I would save approximately \$33.75 per month, and \$405 per year!

5. Internet plan (\$14.99)

NOTE- Because I do not own a cell phone (perhaps an iPhone), I must purchase an internet plan in to use my laptop for social media, schoolwork, etc...

6. Car insurance (\$113)

7. Utilities (\$70)

TOTAL MONTHLY COST OF ITEMS: \$914.26

MONTHLY BUDGET AFTER COSTS OF MONTHLY ITEMS IS SUBTRACTED: \$2,001.74

## After, I must take steps towards purchasing my first home.

Due to my previous configuration, I must find my budget for my house.

1. Subtract total monthly cost (\$914.26) from my monthly budget after taxes (\$2,916.67) to find my monthly budget for my future house, equaling (\$2,001.74)

INTEREST RATE FOR A 30 YEAR FIXED LOAN FOUND BELOW:

According to http://www.bankrate.com/kansas/mortgage-rates.aspx the mortgage interest rate of a 30 year fixed loan in Kansas in the year 2015 is around 3.38-3.80%. This information was found specifically on the date December 9, 2015.

## Additional steps must be taken to determine the right price range for my home

Now that I have found the mortgage interest rate in the state of Kansas, I can determine what price range my new home would be in. I first must plug previous information into the present value equation, solving for present value.

Then, I proceeded to find my potential beautiful home located at 10915 W. 109th Street, Overland Park, KS, 66209. A photo of this home is shown below!

IMPORTANT NOTE- this particular home is \$299,900. I have saved \$152,600 under my house budget. This extra money will go towards home improvement projects and saved for emergency home services (flooding, insect infestation, etc...)

MONTHLY PAYMENT FOR HOME AFTER PLUGGING INTO PRESENT VALUE EQUATION SHOWN ABOVE, SOLVING FOR R= \$1,326.68

## Now it's time to see what else I could save on my house!

I have configured what my monthly payment on my house would be, but what if I increased my minimum monthly payment on my house by 15%?

ALL CONFIGURATION STEPS FOUND BELOW FOR 15% INCREASE MONTHLY PAYMENT

1. I have found that the first step is to add \$1326.68(.15) to \$1,326.68, and got \$1,127.68 as my new monthly payment.

2. I then wanted to configure how long it would take for me to pay off the new amount. After plugging my information into the PV equation, I found that it would take 16 years and 5 months to pay off the house loan.

3. I then decided to find the difference in total amount paid. After subtracting \$477,360 by \$1,127.68(12)(16.5), I found the answer of \$223,280.64. I then subtracted \$477,360 by 223,280.64 to find the final answer of \$254,079.36.

## My cited sources in APA format are shown below.

1. Average Utility Costs Per Month: What’s Normal? (n.d.). Retrieved December 10, 2015, from http://ohmyapt.apartmentratings.com/breaking-down-the-average-utility-costs-per-month-whats-normal.html

2. Find the best mortgage rates in Kansas. (n.d.). Retrieved December 10, 2015, from http://www.bankrate.com/kansas/mortgage-rates.aspx

3. Average Cost of Insurance: Car, Home, Renters, Health, and Pet (2015). (n.d.). Retrieved December 10, 2015, from http://www.valuepenguin.com/average-cost-of-insurance

4. Internet Plans & Pricing. (n.d.). Retrieved December 10, 2015, from http://www.timewarnercable.com/en/plans-packages/internet/internet-service-plans.html

5. Compare Home Phone Service. (n.d.). Retrieved December 10, 2015, from http://www.wirefly.com/compare-home-phone-service

6. Map. (n.d.). Retrieved December 10, 2015, from http://www.reecenichols.com/Listing/ListingSearch.aspx