Christian Community Mortgage Resource Network
Debt Analysis
Statistics support the facts that many Americans are utilizing credit to help maintain themselves now while doing so can keep them from moving forward in their standard of living. Here's a brief checklist and analysis chart to help you determine if you're seeing too much debt that may be holding you back:
Checklist
• Can you save 10% of your gross income? pay "Paul"?
• Does it seem you can never get ahead or get some breathing room.
• Do you have 7 credit cards or more?
• Do you only make the minimum monthly payment on all your credit cards?
• Do you borrow from "Peter" too cosign for a loan because of your credit rating?
• Do you know how much money you actually owe?
• Do you use your credit cards to borrow money to pay for other debts?
• Can you identify the difference between need and want?
• Are you depressed about your level of indebtedness?
If two or more of these apply to you, you are definitely seeing too much debt in your life. But, a plan with timelines can change all that.
Analysis Chart
To find out where you are in your finances, make a list of absolutely everything you owe per month on all credit accounts only. (Do not include your mortgage, utilities, food, etc.) It should look something like this:
| Account Name | Monthly Payment | Total Amt. Owed | Percent Interest | ||
| Visa | $135 | $4,300 | 17.9% | ||
| MasterCard | $90 | $3,200 | 19.0% | ||
| Etc. | Etc. | Etc. | Etc. | ||
| Total: | $225 | $7,500 |
A simple subtraction of what your total monthly payments are from your total net income will tell you how far you are in terms of how deeply in debt you are.
To determine your debt-to-income ratio, divide your total monthly payments by your monthly net income. This is the percentage of your take-home pay that goes to your non-mortgage debt.
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