Murray Net Income: $3,138.78

(Less) Expenses: 2,825.00

Net Savings: $ 313.78

Sam and Janet have $300 per month they can save for a downpayment and closing costs. They have a balance of $1500 in their Bridal Registry Account. At a savings rate of $300 per month, they could add $3600 to their account giving them a total of $5100 in a year.

Their credit cards will be paid off in seven (7) months at the rate of $300 per month, which would give them an additional $300 per month for savings.

Sam’s college loan will take approximately eight (8) years to pay off at the rate of $150 per month. Sam and Janet both agreed that they should leave the college loan payment at the $150 and let it pay itself off at that normal time, because the interest rate on that loan was lower than they could earn on their money in a savings account. After taking a look at their budget, goals, and priorities, it became clear they could negotiate some of their goals and both be happy with them. They divided their goals into short-range and long-range goals.

Their goals for the next six (6) months were the following:

1) Pay cash for all purchases

2) Have their credit cards paid off in six months

3) Add $300 per month to savings

Their long-range goals:

1) Continue to pay $150 per month on Sam’s college loan and not be concerned about the time it would take to pay it off, because it was at a low interest rate.

2) When the credit cards were paid off, add that $300 per month to the savings account.

3) At the end of one (1) year, have a savings balance of $6,600.

By evaluating their income and expenses, they knew they could afford to buy their own home as long as the price was within their housing budget amount. They knew that by following their budget and meeting their goals, they could afford the down payment and closing costs for the purchase of a home.

They knew that by following their budget they could buy a home very soon.

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