Determine your net monthly cash flow

Assignment Help Financial Accounting

Reference no: EM133979004

Project: Financial Planning

Part 1: Make a Budget

Use the table below to determine your net monthly cash flow following the four-step budget-making process. Be sure to list all expenditures and sources of income. Include your total for your monthly income, monthly expenses, and cash flow. An example is provided for you, please erase example when submitting your budget. Get Exceptional Assignment Help for all forms of Assignments.

Step 1: Determine your average monthly income.
Create a column listing each income source with the amount in a column next to it.

Step 2: Determine your average monthly expenses.
Create a column listing each expense with the amount in a column next to it.
Remember:
If you have a weekly expense, you can multiply by 52 weeks a year, then divide by 12 months in a year to find the monthly amount.
If you have a yearly expense, divide by 12 to find the monthly amount.
If you have a biannual expense (twice a year), multiply by 2, then divide by 12 months.

Step 3: Determine your net monthly cash flow by subtracting your total expenses from your total income.

Step 4: Make adjustments as needed.

Write a paragraph describing ways to get your budget into better balance. What did you learn about your own spending patterns? What adjustments should you make to your budget?

Part 2: Dream Home and Savings Plan

Find a current home for sale that you would like as your dream home on any online site that sales homes.

Include a picture and the price of the home. (below)
Home Price: Picture of Home:

Assume you receive a 30 year home loan that has an annual interest rate of 5.2%. What would be your monthly payment for your dream home? What would be your total loan cost for your dream home? (Be sure to use Loan Payment Formula to calculate monthly payment.)

Monthly Payment Amount:

Total Loan Cost:

After thinking about the mortgage, you realize you may need to wait a few years to save up money so that you can make a bigger down payment on your house. If you put $5000 in a savings account with a 4% APR, compounded monthly, how much would you save in 3 years?

Total Savings After 3 Years:

Is a 4% APR a reasonable APR for a typical savings account? (yes or no)

Research local banks and national averages to determine a current, reasonable APR and compounding period for a typical savings account. Be sure to include the name of the bank you selected and any websites you used and their current APR.

Reference no: EM133979004

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