Housing Budget Answer Key
Teacher Answer Key & Solutions
Student Activity Packet: Housing Budget
UNIT: BUDGETING & MONEY MANAGEMENT • NGPF ALIGNED
Solutions Guide
Classroom Edition
Learning Objectives
• Prioritize factors when deciding where to live
• List critical considerations before signing a lease
• Determine financial readiness to purchase a home
• Factor utilities into monthly budget & roommate agreements
INTRO
Question of the Day
What percent of 18–24 year olds live with their parents?
Official Answer: Approximately 52% to 54%
Data Context (Census Bureau / Pew Research): Between 52% and 54% of young adults aged 18–24 live with one or both parents.
Primary Drivers: High rent-to-income ratios, ongoing college enrollment, student loan payments, and young adults intentionally saving for future independence.
LEARN IT
Article: How to Decide Where to Live
The article lists 7 important factors. Below is an exemplary priority ranking (1 = most important to 7 = least important) and instructional rationales:
| Factor |
Rank |
Analytical Rationale / Impact on Budget |
| Cost of Living |
1 |
Determines basic rent, food, and tax burden; keeps fixed expenses under 50% of income. |
| Job Availability |
2 |
Ensures steady employment and wage growth necessary to support independent living. |
| Crime & Safety |
3 |
Protects personal safety, lowers insurance rates, and prevents property loss. |
| Commute |
4 |
Transit, parking, and gas quickly add up; long commutes drain time and fuel budgets. |
| Desirability & Happiness |
5 |
Recreation, social opportunities, and community vibe contribute to well-being. |
| Healthcare Quality |
6 |
Proximity to urgent care and in-network facilities guards against emergency debt. |
| Quality of Education |
7 |
Lower initial priority for young renters without kids, though important for future resale. |
Question: Why did you put your highest ranked factor at the top of the list?
Exemplary Response: "I ranked Cost of Living first because if fixed housing and basic living expenses consume more than 50% of my net paycheck, I will not be able to build an emergency fund, pay off student loans, or afford unexpected costs. Financial stability makes all other lifestyle choices possible."
Unit: Budgeting & Money Management • Student Activity Packet Page 1 of 3
LEARN IT Part 2: Upfront Rental Costs & Homeownership
Answer Key
Article: How Much Does It Cost to Move Into an Apartment? (Hidden Fees)
1. Imagine you submit applications for 4 apartments before finally getting approved. Approximately how much will you pay in application fees?
Answer: ~$120 to $240 (Average: ~$200 total).
Fees typically range between $30 to $60 per applicant for screening and credit checks. 4 applications × $50 avg = $200 (strictly non-refundable).
2. What is the typical security deposit amount owed when you sign a new lease agreement?
Answer: Equal to one month's rent (1x monthly rent).
Standard deposit is 1 month's rent (or up to 1.5x–2x in competitive areas or with limited credit). Refundable after move-out if no damage occurs.
3. If you have a pet, what extra fees might you have to pay?
Answer: Three common pet charges: (1) Pet Deposit ($200–$500), (2) One-time Pet Fee ($100–$300 non-refundable), and (3) Monthly Pet Rent ($25–$50/month).
EdPuzzle: Should You Buy a House?
1. Buying a home achieves which two financial goals at the same time?
Providing a place to live, investing for the future
2. Millennials are buying fewer homes than previous generations for each reason EXCEPT...
They find apartments to be trendier and more fun
Actual causes: Large student loan debt, high down payment hurdles, and self-funding retirement.
3. How much money should you put toward your home's downpayment?
20% of the price of the home
Putting 20% down avoids Private Mortgage Insurance (PMI) and secures the lowest interest rates.
4. You should meet each of these 3 requirements before considering buying a home: (Choose three)
You qualify for good mortgage terms (strong credit score & low DTI)
You have saved a down payment AND an emergency fund (3–6 mo. intact)
You plan to stay in the home for 5 or more years (to recoup closing costs)
"Being married with children" is NOT a financial requirement.
5. How is it possible someone pays their mortgage monthly for years without reducing principal much?
In early years, most of the payments go toward interest
Mortgage amortization front-loads interest. Principal reduction accelerates gradually over time.
Unit: Budgeting & Money Management • Student Activity Packet Page 2 of 3
LEARN & APPLY Part 3: Utilities, Roommate Agreements & Exit Ticket
Answer Key
Article: Here's How to Estimate Your Utility Costs
1. Which bill usually accounts for the largest part of your monthly utility bill?
Answer: Electricity / Heating & Cooling (HVAC).
HVAC typically accounts for 45% to 50%+ of household energy consumption, driving seasonal spikes in winter and summer.
2. What is equal billing and how can it help you when creating your monthly budget?
Answer: An average payment plan that levels out seasonal spikes.
The utility company estimates your annual cost and divides it into 12 equal monthly payments (e.g., $110/mo year-round), preventing unpredictable budget shock.
3. Sam is close to signing a lease for a new apartment and wants to get a better estimate of utility costs. What is one way he can do this?
Answer: Contact local utility providers or previous tenants.
Sam can call the utility companies (electric/gas) with the unit's address to ask for the average 12-month historical monthly bill, or ask the landlord/prior tenant directly.
DO IT
Project: Budgeting with Roommates (Key Takeaways)
A written Roommate Agreement reduces financial conflict. Teacher evaluation checklist:
• Rent Allocation: Split based on bedroom square footage, private bathrooms, or parking (e.g., 55%/45%).
• Utilities & Due Dates: Specify who holds each account and set payment deadlines 5 days before the bill is due.
• Shared Supplies: Establish a shared fund or monthly rotation for household essentials (cleaning, paper goods).
• Early Move-Out Terms: Require 30–60 days notice and obligation to find a landlord-approved replacement.
EXIT TICKET
Exit Ticket: Housing Decision Matrix
Prompt: What are the 3 most important financial checks before signing a lease or buying a home?
Exemplary Exit Ticket Response:
1. The 30% Rule: Ensure total housing (rent/mortgage + utilities) does not exceed 30% of gross income.
2. Upfront Reserves: Retain a 3–6 month emergency fund after paying deposits, application fees, or down payment.
3. Timeline Assessment: If staying under 5 years, renting is superior due to transaction fees and amortization.
Unit: Budgeting & Money Management • Student Activity Packet Page 3 of 3
