Before making the
decision to add more debt, you need to make sure that
you:
Allocate sufficient money for your essentials.
Borrow only for items that you need and can afford.
Borrow only if you're spending less each month than
you take home.
1. Start with
your monthly take-home pay.
This is the amount you have left after taxes and other
deductions have been made.
2. Subtract the
amount you need for necessities and fixed expenses.
This includes savings, your mortgage or rent payment,
utilities, food, transportation, child care, medical
care, clothing, and recreation. Include payments made
on a quarterly, semi-annual, or annual basis, such
insurance and taxes.
3. Subtract
monthly payments for existing loans and credit cards.
4. The balance is the amount you can safely apply to
debt repayment.
Avoid thinking you can spend all this amount, since
emergencies do occur, and you may not wish to use your
regular savings account to cover small, unexpected
expenses.
Monthly Take Home $ _______________
Fixed Expenses ---- $ _______________
Loans/Credit Cards ---- $ _______________
Amount Available For Additional Debt $ _______________
continued
below...
