5-5-1 budgeting
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Southern New Hampshire University *
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Mathematics
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Feb 20, 2024
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MAT 125 5-5-1 Quantitative Reasoning & Problem Solving (Southern New Hampshire University)
lOMoARcPSD|17188890
Milestone Two: Financial Plan and Budget
Timothy Pike
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.
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.
Graphic Designer for Fictional Marketing Firm, Inc.
lOMoARcPSD|17188890
Priority
Debt name
Total owed
Minimum Xtra monthly Months Budget Creation
:
Monthly income: $18.75/h x 40h/wk = $750/wk x 4 = $3000/m
Car loan: $19,000 ($331/month)
Credit Card: $1000 ($100/month)
Bills: $1300 total
Groceries: $700
Debt
: In this section, you will compare your lines of credit to determine the best payoff method
for you.
1.
Comparison: I don’t really have minimum monthly payments, I just take from my monthly income and make payments that fit my budget, with enough to put into savings.
2.
Process: I write out all my bills and compare how much I make a month. Then I take the monthly income and subtract my bills I have to pay ($1300). From there I determine how much I need a month for my car ($331), then I take out my credit card minimum payment ($100) and if I have extra, I put an additional $100 towards the payment. I account for at least $700/month for groceries. I leave $700 in my account for goods and put the rest into savings $3000 – 331/m – $100/m - $1300 - $400 - $700 = $169.
3. Plan: Establish a debt payoff plan that fits your budget, lifestyle, and the demands of the debt to be paid, explaining your reasoning.
EXTRA PAYMENT TO PUT TOWARDS DEBT $169
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lOMoARcPSD|17188890
monthly payments
payments
to pay off
1
Federal student loans
$32,000
$250
$535
2 years 3
months
2
Discover credit card
$2,000
$80
$700
3 months
3
Publix credit card
$1,000
$50
$500
6 months
4
Fusion car loan
$20,000
$850
$2,285
1 year
5
JCPenney credit card
$5,000
$150
$400
6 months
The first debt that I should pay is for Publix credit card since with the highest interest rate it would make sense to pay first. So not only will I make my minimum pay of $80 every month, but I also pay $469 every month from leftover cash I have from the calculations. So I should have $549. Once I pay off my first debt priority, I will move to the next. Use the amount that I was putting towards debt priority #1 and apply to the next. 3.
Comparison: With little to no monthly payments I would just take cash from what I earn in the month and make payments without draining my savings and putting some away.
lOMoARcPSD|17188890
Debt
: In this section, you will compare your lines of credit to determine the best payoff method for you.
1.
Comparison: I don’t really have minimum monthly payments, I just take from my monthly income and make payments that fit my budget, with enough to put into savings.
To recap: I am going to use the monthly payment from the debt I just repaid + the minimum payment I was already paying and put the combined payment towards the next debt. I will then complete this process until all debt is paid off.