MATH201 - Portfolio Project Kimberly Patten.docx

1 Kimberly Patten Portfolio Project MATH201 College Mathematics: Quantitative Reasoning Ms. Tate 01/20/2024

2 Introduction A budget can help you manage your money and allow you to build financial stability and security. When you create a plan to track your income and expenses, you can more easily pay your bills on time, save for major purchases, and build an emergency fund for unexpected expenses. It’s also a great way to strengthen your current and long-term financial foundation. Understanding the debt-to-income ratio is crucial when it comes to subject-to properties, and it plays a significant role in determining the financial health of both the buyer and the property itself. The debt-to-income ratio is a simple calculation that compares an individual's monthly debt obligations to their monthly income. In essence, this ratio provides insights into whether a buyer can comfortably manage their debt payments based on their income. Part 1 - Budget Basics a) Monthly Net pay Profession: Medical Coder Annual Salary: $ 58,250 Gross Monthly Pay ( rounded to the cent ): Annual salary divided by 12 Show your work! $4854.16 58250/12=4854.16 Monthly Net (take-home) Pay ( rounded to the cent ): Gross monthly pay minus 20% for income taxes, FICA taxes, and health insurance deductions Show your work! $3883.33 4854.16*.20=970.83 4854.16-970.83=3883.33 Table 2: Monthly Expenses Budgeted Category Category Details Total Budgeted Amount Percent of Total Take Home Pay (Rounded to Nearest Whole Percent)

3 – Show work Housing (Need) Rent or mortgage payment = property taxes = repairs = etc. $808.17 21% 808.17- 3883.33=0.208*100=20.8 1 Work: Food (Need) Groceries = going out to eat = small snacks (lattes, vending machine, etc.) = Formula for Child(ren) = $250.00 6% 250/3883.33=.064*100=6. 4 Insurance (Need) Life = Medical = Doctor Visits for Child(ren) = Home = Auto = $ 150 4% 150/3883.33=.0386*100= 3.86 Work: Transportatio n (Need) Car payment = Fuel = Parking = Oil change = Bus Fares = $700.00 18% 700.00/3883.33=.180*100 =18 Work: Utilities (Need) Water = Electricity = Internet = Gas = Phone = $500.00 13% 500/3883.33=.128*100=1 2.8 Work: Personal care (Want) Haircuts = Clothing = Make-up = Nails = Diapers / Clothing for Child(ren) = $100 3% 100/3883.33=.025*100=2. 5 Work: Entertainmen t (Want) Anything fun (leisure activities) = Netflix = Hulu = HBO Max = Disney Plus = Gym Membership = Subscription Boxes = Vacation = Birthday/Holiday gifts = $300 8% 300/3883.33=..0772*100= 7.72 Work: Miscellaneou s (Want) Donations = Day Care / School Expenses = Pet Expenses = Credit Card Payment = Student Loan Payment = $200 5% Work: Savings (Savings) Retirement / Savings = Emergency Fund (leftover income) = $200 $675.16 5% 3883.33- 3208.17=675.16*100 17% Work: TOTAL $3883.33 100%

4 b) Compare your Monthly Expense Ratios to the 50-30-20 Rule I. . My Needs 62% are high compared to the 50-30-20 rule. My Wants at 16% are low compared to the 30% they should be. My Savings at 22% are a little higher than the recommended 20%. II. NO, I don’t plan to make any changes. The 50-30-20 rule is only advisory and for my lifestyle it works. I don’t have much time for Entertainment, or going out, getting my nails done etc. I do however go on Vacation once a year so my Savings being high will compensate for the money, I use on my vacation yearly. Which technically is a Want, I just do it once a year. My Needs are my bills and they have to be paid so they are not adjustable at this time.

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