Pre-calculus Finance Project
Scenario 3, By Nic Redford
At $94,900 this Olathe home is an absolute steal! 416 S MAHAFFIE STREET, OLATHE, KS, 66061
This vintage 1966 home has two garage spaces; 10 cozy rooms, including three bedrooms, and two full bathrooms. With a fenced backyard and a porch, there's no doubt you will love this home.
Info From: 416 S MAHAFFIE Street, Olathe, KS 66061 | MLS 1968748 | Listing Information. (n.d.). Retrieved February 14, 2016, from http://www.reecenichols.com/homes-for-sale/416-S-MAHAFFIE-Street-Olathe-KS-66061-166788204
Amortization table and Pie chart from: Amortization Schedule Calculator. (2016). Retrieved February 14, 2016, from http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx
Pie Chart
With a total cost of $83,315.60 for insurance, plus the principal of $94,900, the total cost of the house after thirty years would be $178,215.60
Another consideration
You could consider paying 15% on your monthly payments, thus paying $569.30 per month rather than $495.04. This would ultimately save you $72,103.30 down the line and pay off the house in about twenty three years. However, I do not recommend this as you are on a tight budget as it is, and with Property taxes and insurance, your monthly house payment will even out to be around $745, according to current tax rates.
Costs of monthly Necessities (given appropriate leeway)
- Roughly $120 monthly for car insurance. (I recommend choosing progressive, as they are the cheapest insurers in your area.)
- $50 for 2GB t-mobile cell phone plan
- $300 for groceries, and supplies a month. (based on national average, for a low spending budget)
- $150 for gas a month
- $106 for electricity
- $100 for water
- $120 for natural gas (including heat)
- $45 for internet access
- This leaves a total of $82.96 left over after mortgage, student loans, car payment, and living necessities.
Rationale
- electricity, water and natural gas costs are based on the Olathe area averages (http://www.olatheks.org/finance/UtilityRates)
- Assuming Jenny would need to fill up her car about three times a month, and also assuming with today's cheap gas prices, Jenny would spend about $40 per fill therefore making $150 a month reasonable, with included leeway
- National average for groceries statistics (http://www.loweryourspending.com/average-amount-spent-on-groceries-for-one-person-per-month.html)
Recommendations
- Take short showers, and always turn lights off when your not using them
- drive CAREFULLY
- don't get injured or sick
- consider getting a second job
- Ask for furniture for Christmas
- Shop at Aldi(TM)
- ***Marry a rich person***
- put any extra money in savings