This lesson plan was developed by my supervising teacher, Ms. Busald. I have provided links for my class.

First, consider the following:


 How much house can you afford?

http://www.bankrate.com/brm/green/mtg/basics1-2a.asp

If your income is $40,000 per year, calculate income tax:

                         Federal tax:

15%   $7,151-$29,050

25%  $29,051-$70,350

Subtract the tax.  What is left?

Now divide by 12.  What is your monthly income?

Now, roll the dice to find your “income.”   Write here: ________________

                          Federal tax:

                         State tax:

                          City tax:

15%   $7,151-$29,050

25%  $29,051-$70,350

Monthly income:

On the back of this sheet, list all the expenses you expect to have in one month.  Be sure to include both necessities and entertainment.  Now assign a dollar amount to each item.  What is the total?  Does this fit into your monthly budget?

                                                    Find a House!

Now that you know your income, find a house.

Look in the Chronicle.  What kind of home can you afford on your income?

“The housing expense, or front-end ratio, shows how much of your gross (pretax) monthly income would go toward the mortgage payment. As a general guideline, your monthly mortgage payment, including principal, interest, real estate taxes and homeowners insurance, should not exceed 28 percent of your gross monthly income. To calculate your housing expense, multiply your annual salary by 0.28, then divide by 12 (months). The answer is your maximum housing expense.”  (From Bankrate.com)

Salary(_________X.28)/12

What can you afford to spend monthly on housing?

Look at housing ads.  Choose a home. 

If buying:  add property taxes, closing costs.  Will you make a down payment?

Will there be any hidden repair fees?

Is it cheaper to rent than to purchase?

What are some other choices? 

                 


 

Car calculator

http://www.defenselink.mil/mapsite/carpay.html

Other expenses to consider:

Ask students to calculate the cost of a yearly vacation.  They should include travel expenses, lodging, food and souvenirs.

Also consider emergencies such as an unexpected hospitalization, new tires, roof for the house, wedding gifts, etc.