| 3 - Analyze Your Debt | | | | monthly payments for each of these debts to |
| The next step is to figure out exactly how much you | | | | determine the total monthly cost of your debt. |
| owe. First, make a list of every debt you have. Not | | | | Now, you need to determine how much this debt is |
| just credit cards, everything. Credit cards, department | | | | going to cost you if you continue making the payments |
| store credit, mortgages, car payments, unpaid past-due | | | | you currently are. You can do this by completing an |
| bills, student loans -- everything. | | | | amortization table for each debt. Don’t worry, |
| You do not need to count items such as recurring bills | | | | we’re not going to make you do this yourself, |
| like electric, gas, cable, etc. These are not debt, they | | | | you can use our amortization calculator located at This |
| are recurring expenses. At any time you could shut | | | | will tell you two key pieces of data: how much each |
| these off and not owe any additional money, although | | | | debt is going to cost you, and when it will be paid off. |
| it may make life unpleasant, to say the least. | | | | Add the total cost of each loan together; this is the |
| Once you have a list of what you owe, you need to | | | | total cost of your debt. This number can be scary at |
| determine what your remaining balance is on each | | | | first, but don’t get too worried yet, this should |
| item, the current interest rate and your monthly | | | | be the last time you see this number. |
| payment for each debt. On most loans you’ll be | | | | If your total monthly debt is greater than 50% of your |
| able to find this information on your monthly bills. | | | | net monthly income, or you have found yourself in a |
| However, you may have to make some phone calls | | | | situation where you are unable to pay your bills and |
| to get this information for other debt. Add the | | | | have fallen behind by several months, I would suggest |
| remaining amount on each of these items together, this | | | | you stop here and seek the advice of a professional |
| is your total amount of debt. Also, add together your | | | | financial counselor. Otherwise, continue on. |