Raymond answer

 d) Consider other expenses related to their home, can they afford living there?  

property tax: $3300/year;                           fuel for car: $5000/year

hydro, water, gas = $2600/year;                 Maintenance for house= $2000/year;

Maintenance for house= $3000/year;        day care for two children=$9000/year

Cable, TV, internet, phone = $3750/year;

Insurance for car and house = $4000/year;

 

-       Add up all the expenses for the year (3300+2600+3000+3750+4000+5000+2000+9000 = 32650)

-       Find how much they have to pay each month ($2720.83)

 

 

e) Calculate the total expenses (house related, child care, mortgage and car payments, excluding food) for the year.

 

-       Mortgage = $475/m

 

f) Consider Raymond and his wife income, can they afford the new car and the new house even they don’t have to eat.  Compare the two numbers (income and total expenses)

- income $48000/year

- only the expenses per year + cars + mortgage

- make a conclusion: can they afford to live in Far Far Away?

- should not live in Far Far Away. Too expensive, cant afford it

 

 

 

g) If you were Raymond, will you move to Far Far Away?  What are your choices to reduce expenses and/or increase income?  List two alternatives for each.

 

- two ways to increase income

- part time job during the weekend

- rent out the basement (close to $2000/m)

- online work, tutor, Youtuber, design website for others

 

 

- two ways to reduce expenses

 

-       Drive only one car. Sell the second car

-       (Insurance: 21 years male $6000/y, 21 years female $4500/y)

-       Budget, buy stuff that is on sale