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)

$PV=Payment(\frac{1-(1+0.0053)^{-360}}{0.0053})\Rightarrow Payment=872.05$

2. Taxes

$\frac{2800}{12}=233.34$

3. HOA fees:

$\frac{180}{3}=60$

4. Insurance:

$\frac{450}{6}=75$

5. Clean service:

$10hour\times6hours\times4weeks=240$

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