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Income and Expense Statement
When planning to buy real estate, one should complete a planned expense statement. An expense worksheet will allow you to forecast how much you can afford for a new house. The statement can also help you to to calculate your Housing and Debt Payments Ratios.
Planned Monthly Income & Expense Statement
| Income | Monthly Pay (Gross) | $4,700 |
| Monthly Pay (Net of Taxes) | $3,050 | |
| Monthly Interest Income | $0 | |
| Monthly Other Income | $0 | |
| Total Income | $3,050 | |
| Expenses | ||
| Amount, | Subtract From Income | Left: |
| $895 | Mortgage | $2,155 |
| $210 | Property Taxes | $1,945 |
| $75 | Property Insurance | $1,870 |
| $0 | Flood Insurance (if needed) | $1,870 |
| $0 | Condo Fee (if needed) | $1,870 |
| $325 | Auto Loan | $1,545 |
| $125 | Credit Card 1 | $1,420 |
| $125 | Credit Card 2 | $1,295 |
| $0 | Alimony | $1,295 |
| $0 | Other Debt | $1,295 |
| $167 | Car Insurance | $1,128 |
| $75 | Electric | $1,053 |
| $0 | Natural Gas | $1,053 |
| $50 | Cable | $1,003 |
| $50 | Phone | $953 |
| $50 | Internet | $903 |
| $73 | Gasoline | $830 |
| $500 | Food & Other | $330 |
| $2,720 | Total Expenses | |
| Disposable Income | $330 |
NOTES:
1. If you do not own your home, substitute rent for mortgage.
2. (Blue Numbers / $4,700) = .25 (housing ratio)
3. (Blue Numbers + Green Numbers) / $4,700 = .37 (debt ratio)
4. ($3,050 - $2,720) = $330 (disposable income)
Lastly, personal savings is not taken into consideration above, and one should try and save via their employer's 401k plan or deduct some savings in the worksheet above and consider it an "expense." (That is, plan on saving something.)
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