Home > Mom's Life > Family Finances > Understanding Finances > Calculating Your Personal Profits and Losses
|

Calculating Your Personal Profits and Losses

Take a fresh look at your overall expenses by separating the things you can reduce (utility bills) or stop (subscriptions, lattes, and so on) from the things you're stuck with (installment loans such as a mortgage, revolving loans such as credit card debt, and the like). Create a table like the above and fill in all of your expenditures. If you find that you have several loans in the "Stuck with It" category, creating a more detailed view of those items will help you to anticipate when you'll be done paying on them; this is critical information if you plan to create a budget later in this chapter.

To give yourself a better vantage point on your loan debt, create a chart or table similar to the one below. If you've never done this before, make sure you're sitting down: Seeing your debt totaled this way can be a real shocker.

Liabilities

Liability (in payoff priority order, pay highest int rates 1st) Amt Owed... Credit Limit Int. Rate Min. Pymt ...As Of Notes
Citibank MC 8,751.21 8,460.00 27.990 210.00 1/20/04 Took $2000 cash advance to pay Ron for food; higher int rate on
Amex 5,424.84 5,000.00 23.990 300.00 1/8/04 Was originally 14.99%--???
MBNA Visa 1,973.75 2,500.00 12.990 50.00 1/23/04  
MBNA WorldPoints Visa 10,240.14 10,000.00 9.990 200.00 1/12/04 Started 3/25/03 @ $8228.03--transferred Citibank to here; 5/03
Bank--overdraft protection 356.02 1,000.00   70.00 3/31/04 7/30/3: Not getting bills, address still not changed, sent fax
Total Credit Due 26,745.96          
Mortgage 135,081.31   7.250   12/30/03 30-yr loan:; started 8/13/02 @ $136,800
2nd Mortgage 34,019.70   11.375   12/30/03 15-yr loan; started 8/13/02 @ $34,200 and 11.655% int
Total Mortgage Debt 169,101.01          
TOTAL LIABILITIES 195,846.97          

When you see what you're facing, you can plan your attack. (This is a great time to consult a financial advisor.) Strategize the best way to knock down your debt (for example, in figure above, you might notice this person has chosen to pay off items with the highest interest rates first) and keep yourself on track by updating this chart every month.

What to Do When Debt is Too Deep
What do you do when your debt has become truly unmanageable? If, despite your best efforts, organizing your finances and creating a budget just aren't going to be enough, you might need to consider a more drastic measure, such as declaring bankruptcy. Information on how to file for bankruptcy is available at www.uscourts.gov/bankruptcycourts.html.

If you suspect (or know) that you would have enough money if you could just stop spending it, you might find relief with Debtors Anonymous (www.debtorsanonymous.org). This organization employs the 12-step approach popularized by Alcoholics Anonymous to help people learn to control their spending. The Web site features a quiz to determine whether you are a compulsive debtor and some resources for suggested reading.

Next: Page 3 >>

More on: Family Finances

|

Reproduced from Organize Your Personal Finances in No Time, by Debbie Stanley, by permission of Pearson Education. Copyright © 2005 by Que Publishing. Please visit Amazon to order your own copy.


highlights

Special Books for the Kids You Love
Celebrate 20 years of sharing love to the moon and back with the anniversary edition of Guess How Much I Love You, one of the world’s best-loved picture books. Plus, search our Book Finder for more great book picks. Brought to you by Candlewick Press.

Vote Now for the Children's & Teen Choice Book Awards
Voting is open now through May 3 for the Children's and Teen Choice Book Awards — the only national book awards program where the winning author, illustrator, and books of the year are selected by young readers. Encourage your child to vote for his favorites today!

Top 10 Math & Science Apps for Your Whiz Kid
Looking for the best math and science apps for kids? Check out these cool apps for all ages, which will grow your child's love of the STEM subjects (science, technology, engineering, and math).

Registered for Kindergarten — Now What?
Wondering what to do now that you've signed your child up for kindergarten? Try our award-winning Kindergarten Readiness app! This easy-to-use checklist comes with games and activities to help your child build essential skills for kindergarten. Download the Kindergarten Readiness app today!

stay connected

Sign up for our free email newsletters and receive the latest advice and information on all things parenting.

Enter your email address to sign up or manage your account.

Facebook icon Facebook icon Follow Us on Pinterest

editor’s picks