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Step 9

Do you pass the debt test?

Freedom from debt is an achievable goal for every family. The first step in regaining control is to take an honest look at your existing obligations. Take the following debt test to determine if you need a plan for payoff.

The Debt Test

Yes
No
Is an increasing percentage of your income going towards paying down debts?
Yes
No
Is your savings cushion inadequate or nonexistent?
Yes
No
Are you near or at the limit of your lines of credit?
Yes
No
Can you only make the minimum payments on your revolving charge accounts?
Yes
No
Are you often late with bill payments?
Yes
No
Are you paying bills with money earmarked for something else?
Yes
No
Are you using credit to pay for items you used to buy with cash?
Yes
No
If you lost your job, would you be under immediate financial strain?
Yes
No
Are you unsure about how much you owe?
Yes
No
Are you being threatened by collectors with possible legal action?

 

A ‘yes’ to any of these questions is a sign that you may need to make debt payoff a priority. 

The following worksheet can help you get an accurate picture of your obligations.  Keep this worksheet handy, you will make a plan for payoff in a few days.

For more information, see PT Money's blog post with five great reasons to have less debt.

Debt Load Worksheet

Creditor: Account #: APR: Current Balance: Monthly Payment: Due Date:
1.
2.
3.
4.
5.
6.
7.
8.
Total