Using Credit Wisely: Identifying Issues & Setting Limits

Prepared by:

Sissy R Osteen, Ph.D., CFP®

If you Answered “Yes” to:

1-2 questions: You may be developing financial problems.

3-5 questions: You are on the edge of Financial disaster.

5-10 questions: You are in over your head.

Your Financial Situation

Income

Expenses

Debt

Determining Income

Income Source Weekly Bi-Weekly Month Yearly Total

Salary

Tips

Soc. Sec.

Retirement

Child Support

TANF

Student Loans

Tax Refunds

Other

Determining Expenses

Housing Food Clothing Transportation Childcare Medical School Expenses Entertainment Personal Items Reserve Savings* Miscellaneous

Occasional Expenses

Past 12 Months

Home Repairs $

School Expenses

Car Maintenance

Car Insurance

Medical Expenses

Clothing

Gifts

Vacations

Property Taxes

Total $

Reserve Account

Having some meansFinancial Freedom

Having none means Catching Up and More Debt

Defining Your Debt

Lender Monthly Payment

Balance

Car Loan

Credit Cards

Bills

Loans

Is there a Debt Problem?

Income minus Expenses

= Amount Available for Paying Debts.

- =

Sometimes looks like this

- =

- =

Or this

Debt/Income Ratio

Monthly DebtMonthly Income

Debt/Income Ratio

15% or Less Usually Not a Problem

15-20% Plan Carefully

20-35% Cut Back!

Over 35% Seek Help!

What To Do If You Need Help

Stop using your credit cards.If you have money, contact your creditors and ask for lowered payments.

If you have been threatened with legal action, contact a lawyer.

Questions