Question

Congratulations! You just bought your first house for $140,000 which you financed with a flat-rate 30-year mortgage at 6.5% APR. Taxes will be $2800 per year. Your HOA fees are charged $180 per quarter. Your homeowner’s insurance is $450 for a 6 month policy. You hire a maid to clean the house for $10/hour. She will come by twice a week for 3 hours at a time. How much should you put in your monthly budget for household expenses?

Answer 1

There are 5 duties:

1. The house: In order to find the monthly value, calculate the monthly debt (note the flat rate changes from years to months)

`PV=Payment((1-(1+0.0053)^(-360))/(0.0053))\Rightarrow Payment=872.05`

2. Taxes

`(2800)/(12)=233.34`

3. HOA fees:

`(180)/(3)=60`

4. Insurance:

`(450)/(6)=75`

5. Clean service:

`10hour*6hours*4weeks=240`

Sum all the duties

`872.05+233.34+60+75+240=1408.39`

It would be best if you put in your monthly budget of 1408.39 for household expenses