Financial Tune-Up for 2009
Greetings:
Now that the shopping is over for the holidays, it’s time to get our goals on paper. There are 5 areas we should concentrate onm for a overall healthy fiajncial state.
1. Pursue a healthy Debt to Income Ratio:
In order to qualify for a mortgage for which the lender requires a debt-to-income ratio of 28/36:
- Yearly Gross Income = $45,000 / Divided by 12 = $3,750 per month income
- $3,750 Monthly Income x .28 = $1,050 allowed for housing expense.
- $3,750 Monthly Income x .36 = $1,350 allowed for housing expense plus recurring debt or monthly revolving debt. This is a good measuring stick to see if you have healthy “DTI”
2. A Credit Score of 700 and above:
Pay on time- always pay your bills on time
Don’t max out your credit- Always keep your card balances at 30% or below your available credit limit
Time matters- if you have accounts with old an history do not close it.
Don’t open unnecessary accounts- stay away from too many credit inquires
3. Build Your Emergency Fund to $1000 as quick as possible:
- Have a garage sale
- Work Overtime
4. Decrease your monthly expense by 5%:
Call your utility company and see if you are saving the max on your electricity.
Call your cell phone company see if you can decrease your bill.
Call your cable company and see if you can decrease your bill.
Lastly see of you can cut all mag subscriptions from your budget.
5. Pay yourself first, it’s always good to pay yourself 5-10% of your gross into a savings account.
I look forward to seeing God manifest himself in your lives concerning your finances. Stay on the look out for our next Pathways class. I will see you soon.
Good Bye for now.
Elder Raines
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