Debt: Are you really affording it?

WARNING: The information on this post may shock you so be sure to have a glass of water on hand and an oxygen tank on hand.

Just because you pay your minimum debt payments on time every month, doesn't necessarily mean that you can afford it. Continuing to go about the same daily habits without revamping your budget, you'll pay those minimum payments for decades and the debt you pay will never seem to go away.

With your calculator, figure out all the money you pay towards your minimum monthly debt and divide it by 15. The answer is the money you actually need to maintain a good and healthy debt ratio.

For this example this is the debt of 1 family member not a combined household

Your Variables are: DEBT = $926.00 DEBT RATIO=15% X=?

X = $926.00/0.15 = $6173.33

So, a monthly income of $6173.33 is what you need to make to maintain a comfortable living lifestyle, never having to rob Peter to pay Paul. You'll be able to save for retirement, provide for your family, and even go on a vacation once an a while. Life would be great!

But let's get back to life, and back to reality. It's time to crack down on this....I know you've been considering it but debt repayment requires a plan and in writing. I'm talking about making shopping lists and comparing pricing, avoiding name brand products, cutting down on variable spending, scrapping the debit cards and credit cards and living on cash. Following a specific plan and setting goals that you can live by and working together on debt repayment is the best way. If communication is difficult with your other half, then work on you first and set an example. You will thank and treat yourself in the end when it's all over ;) Not to mention, you'll become very talented in finding great ways to stretch your dollar!