You have monthly bills of at least $1,210 and monthly take-home pay of $2,920. This is a consumer debt-to-income ratio of 41% ($1,210/$2,920) which is way above the 20% that is considered in the "danger zone." Undoubtedly, you are feeling financial stress.
There are three ways to improve this situation:
1. Take action to increase income.
2. Take action to reduce debt.
- OR -
3. Do a little of both.
Whatever you do, try not to take on any more debt. You might consider selling the truck and/or bike and replacing them with less costly vehicles and trying to transfer your existing credit card balances to cards with lower interest rates. It is also very important that you are using a budget and tracking your expenses. Having an established budget to track your expenses will allow you to identify areas where you can save money to use to reduce debt faster. Also consider doing a PowerPay analysis on www.PowerPay.org which will provide you a calendar to get out of debt faster and pay less interest. PowerPay works by taking freed up dollars from repaid debts and applying them to payments owed to remaining creditors.
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