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Give Your Debts a Financial Health Check
A debt-to-income ratio is a measure of financial stability calculated by dividing monthly minimum debt payments by monthly gross income. This calculation gives a straightforward depiction of your financial position. Typically, the lower your ratio, the better handle you have on debt. Determining your debt:
  1. Collect your most recent credit billing statements for current balances
  2. Outline your total monthly bills using two columns: bill type (such as car loan, mortgage/rent payments, and so on) and monthly payment. Do not include bills such as taxes and utilities in this list.
  3. Add up the total for all of the monthly payments listed.
  4. Calculate your monthly before-tax income. If you receive a paycheck every other week, as opposed to twice a month, your monthly gross income is your before-tax income from one paycheck times 2.17.
  5. Your monthly debt-to-income ratio is calculated by dividing your monthly debt payments by your monthly income. For example, someone...
A Personal Debt Assessment: Your Financial Life Preserver

Do you feel like you're drowning in debt? Trust your instincts.

The national average credit card debt per household is $7,180. About 46% of households carry a balance on credit cards from month to month. Our reliance on plastic and other forms of credit makes life difficult for families struggling to make ends meet. Even if you're still in shallow water, a personal debt assessment may be just the financial life preserver you need to keep your debt from spiraling out of control. How do you know if you need a debt assessment? Ask yourself whether you're experiencing these warning signs: * Do you frequently pay bills late? * Do you pay only the minimum due on your credit cards? * Do you use credit for necessities like groceries? * Have you ever used one credit card to pay off another? * Do you find yourself paying off holiday debt for...
Four Money Mistakes Every Couple Should Avoid
Money can wreck a relationship. In fact, how they spend, save, and account for money is one of the leading sources of friction between couples. In virtually every study, money ranks as the first or second most argued-about topic for twosomes of all types. Try to avoid these four common mistakes:
  • Extremism. Work on changing your ways if you're on either end of the spectrum from shopaholic to cheapskate. It's a lot easier to have a meeting of the minds when both partners practice moderation.
  • Secrecy. Don't hide your spending from your partner. Once you lose your partner's trust, it'll be an uphill battle to win it back.
  • Assigning blame. If both partners stay involved, one can't blame the other for the household's money troubles.
  • Using money as a weapon. Spending to get back at your partner won't solve your relationship issues, it will just make you unhappy and broke.
Ultimately,...