This document provides steps to calculate how much you can afford for housing costs each month and annually. It instructs you to take your monthly income, subtract fixed debts like loans and bills, subtract estimated costs for food, savings and entertainment. The remaining total is how much you can afford for monthly housing. Multiply this by 12 to get an annual amount and by the number of years for a loan term, like 30 years, to determine the price of a home you can afford.

1. Take Monthly Income
SUBTRACT SET DEBTS
SUBTRACT FOOD COSTS
SUBTRACT SAVINGS
SUBTRACT ENTERTAINMENT COSTS
$
$
$
$
$
TOTAL:
take how much you make a month
without taxes.
subtract car, phone, loan payments.
everyone will have different debts.
Subtract what you pay for in food each
month. Find this out by averaging your last
three months of food costs.
Subtract how much money you put
into savings each month.
Subtract your average
entertainment costs for each month.
This total represents how much money you
couldaffordforhousingcostseachmonth.
x 12
This total represents how much money you
could afford for housing costs each year.
multiplythisnumberbythenumberofyears
you want to have a loan for (15 years, 30
years). This is the price of a home you can
afford.
x 30
how much can you
spend on a home?