5-5-1 finiancial plan and budget

docx

School

Southern New Hampshire University *

*We aren’t endorsed by this school

Course

MAT-125-Q1

Subject

Finance

Date

Feb 20, 2024

Type

docx

Pages

4

Uploaded by ChefMetalJaguar26

Report
Milestone Two: Financial Plan and Budget Joshua Pelkey Congratulations on graduating with your bachelor’s degree from Southern New Hampshire University! A new array of opportunities is open to you, but which will you choose, and how will it impact your life? Select your discipline area of interest and examine the set of jobs you have applied to and received offer letters for to determine which one best fits your needs and wants. Employment Opportunity Selection Select an employment opportunity. Although it is not required at this point, you will defend your selection using your calculations and personal criteria in the final project. Graphics Design with Fictional Marketing Firm, Inc. Living Expenses and Debt Using your selected employment opportunity, analyze your monthly expenses and income, and prepare a plan for paying down your debt. You can use your actual amounts of expenses and debt if you prefer, or, if you are uncomfortable using real numbers, or if you do not have any debt, you can make up a principal amount, interest rate, payoff period, and minimum payment to cover
at least one student loan, one credit card, and one personal or auto loan. You can utilize as many loans as you like, but you must have at least three. Budget Creation : Monthly income is $3,000/mo Mortgage: $887. Credit Card: Minimum payment is 5% of balance or $25. Auto loan: $326/mo. Total expenses = $1238. DTI ratio is 41%
Debt : In this section, you will compare your lines of credit to determine the best payoff method for you. 1. Comparison: Compare monthly minimum payments, principal totals, interest rates, and payoff period. Mortgage: Payment - $887, $175,000 financed for 30/yr fixed @ 4.5% Credit Card: $500 limit @ 18%, interest. Minimum payment is 5% of balance. Auto loan: $326/mo, $17,500 financed for 60 months @ 4.5% interest. 2. Process: Determine how you will figure out how to pay off your debt over time, considering your budget and your new income. Explain your process. Mortgage is a 30 year fixed loan, this will be the last to be paid off. If my credit card is maxed out I can pay $25 per month and have it paid off in 2 years. My auto loan is 60 months or 5 years. 3. Plan: Establish a debt payoff plan that fits your budget, lifestyle, and the demands of the debt to be paid, explaining your reasoning. I can add an additional $75 per month to my auto loan and pay it off a year early, this will only raise my DTI ratio by 2%. If my credit card is maxed out, I can pay $45 per month to pay it off in a year, otherwise the minimum $25 per month will take 2 years to complete. The mortgage will still remain a 30 year fixed APR mortgage until the auto loan is paid off. Then the auto loan money (400) can go towards the loan. This can pay off my mortgage 11 years sooner. This will keep my DTI ratio around the 42% mark, until my loans are paid off. This gives me some wiggle room to take into consideration for food and travel expenses, utilities, insurance internet and
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help