World Economy · Learn with evidence
A worked household budget that connects take-home pay, savings, ownership costs and cash to close.
Free guided activity · 35 minutes · Ages 16 and up
Before you start: Monthly budgeting and subtraction.
Learning goal: Separate a household housing budget from a lender’s qualification amount.
Preparation: Paper, pencil and calculator. Allow one shared screen for the linked tool, or use the printed exercise offline. Fictional figures are for practice.
Use monthly take-home income. Subtract living costs excluding housing, debt payments and savings goals. The remainder is a planning ceiling for all housing costs, not a loan payment quote or loan approval.
Open the household budget planner →Account for principal and interest, property taxes, insurance, any mortgage insurance or association fees, utilities and maintenance. Avoid counting utilities in both living and housing costs. Obtain local quotes; illustrative figures are not a lender offer.
Compare monthly ownership assumptions →Separate down payment and closing costs from the cash reserve left afterward. Test a lower income or higher insurance bill. The CFPB home loan toolkit explains how to compare loan terms and closing documents.
Test a change and print the plan →Fictional monthly household: $6,000 take-home pay, $2,100 nonhousing living costs, $500 debt payments and $700 planned saving. Proposed total housing costs are $2,400. Utilities are included in housing, not the $2,100.
How much is available for housing, and what buffer remains?
What if take-home income falls 10%?
Does cash for a down payment prove monthly affordability?
Exit ticket: Explain one result in your own words and name an assumption that could change it.
Try the worksheet first. These answers explain the reasoning, not just the result.
6,000 − 2,100 − 500 − 700 = $2,700 available. After $2,400 housing, $300 remains. This is a budget calculation, not a borrowing recommendation.
Income becomes $5,400. Available housing money falls to $2,100, creating a $300 monthly shortfall at the proposed housing cost if all other plans remain unchanged.
No. Upfront cash, closing costs, emergency reserves and recurring affordability are separate checks. A household can pass one and struggle with another.
Next week: revise one cost using a real quote or bill, then state how it changes the buffer. Keep private financial details off classroom worksheets.
For a younger learner, work through the first calculation together. For an extension, change one assumption and defend the new conclusion.
See the related optional paid teaching pack →The complete activity above is free. The linked pack is a separate resource; this activity does not change its contents.
World Economy’s original exercises apply the concepts in these sources. Reviewed September 13, 2026. This is educational background, not a live event report.