Knowing how much debt is important to you when you’re looking to figure out how much you’re going to have to pay off each month. There are plenty of calculators out there that can help you with evaluating your debt. But before we use that calculator, we want to figure out what numbers we’re going to need to know.
Your monthly income – Before we even start, we need to know how much money you’re bringing in. This is going to be your take home pay and not the money before taxes. For instance, if you bring home $3,000 as a family, then this is your take home.
Looking at housing expenses- Our housing expenses are going to be our most expensive bill probably. So whether you rent or own your own, let’s mark down exactly how much we’re paying each month. This is going to be your mortgage bill or rent only. Whatever you pay is what we are going to use here. We are going to use this number because this is a bill we are going to pay no matter what each month.
Your other monthly payments – Now, we are going to look at your other monthly payments that you’re going to pay each month no matter what. I know we can get rid of some of these but some of the bills you’re going to want to include on this list are –
- Heat
- Electric
- Health Insurance
- Car Payment
- Insurance (home, car, life)
- Cell Phone
- Cable TV / Internet
- Entertainment
There are plenty of more out there like gym memberships, online video games, etc. Look at what you pay month after month. This will show you where your money is going.
Your debts – Now this is where the fun starts. Now we are going to look at the debts that you currently hold. Anything from credit card debts to student loans. This is the debt that you want to get rid of. Things like your cell phone bill, etc, shouldn’t be here.
Now that you know what numbers you”ll need, you’ll want to try out a debt evaluation calculator on MSN. Something like this will give you a better idea on how your debt looks compared to most. It also gives you a better idea on where you stand with bill payments, etc.
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