The objective of this project is to investigate how to budget and to begin to understand how to pay off debt while growing savings after obtaining a job. In this situation, it is 2021 and I have obtained a starter job with a gross income of $29,000 annually. I have chosen to settle in X city, which is a thriving metropolis but is also known for its economical cost of living. Unlike other cities in which there has been a significant increase in the cost of housing, in this city the housing market has remained relatively stable and affordable. Based on my salary and tax bracket, my annual net income would be around $23,957.38 which would give me a monthly net income of around $1,988.

You're lucky! Use promo "samples20"
and get a custom paper on
"Taxes and Budget"
with 20% discount!
Order Now

Initially, in order to save on the cost of rent, I will be living with my parents. As such rent will make up 0% of my monthly budget. This choice will allow me to focus more on saving money for future purchases. The main categories in my budget include food, savings, credit card debt, gas, insurance, extras, cell phone, personal care, gym membership, loan debt and savings for my mortgage. Of these budget categories, credit card and loan are the two categories in which I will be paying off debt. And represent 8.55% and 8.48% of my monthly budget respectively. I also will be placing 14.82% of my monthly budget in savings and another 22.11% in savings for mortgage payments allowing me to save up a down payment. I focused heavily on saving and living frugally this will allow me to be able to own a home significantly faster. In addition, I have budgeted money for entertainment and a significant portion (15.52%) for food, which will help ensure that I stay on track in my saving.

The reason I am so focused on saving is that within the community there has been a push for expansion. Therefore, in the years to come housing prices may soar. Having grown up in this community I wish to be able to live here permanently. I am also saving for a BMW, while this is an expensive car, it also has good resale value and I grew up wanting to own one. Therefore I have decided to focus on saving in order to make this dream happen. It is for this reason that I am saving $291.67 for the car and $435 for the house payment. This will allow me to buy the car after 112 months. This will also allow me to have a substantial down payment for purchasing a house. After creating the spreadsheet, I did adjust the values by increasing the car savings so that I would be able to make this purchase sooner.

Based on my current plan I will pay off my credit card debt in 3 years. In addition, I will have a monthly payment of $166.87 for my student loan and will pay off my debt in
120 months or 10 years. In the city that I have chosen the cost of a home is around $83,390. It is for this reason that I have chosen to live at home and begin saving for a down payment. Currently, if I was to buy the house right now the mortgage payment would represent 22.11% of my net monthly income but would represent 18% of my gross monthly income. Therefore, I could immediately qualify for a mortgage. However, by living at home with my parents for at least a year this will allow me to have a $5,220 down payment, which would significantly lower my mortgage and allow me to have extra money for savings.