REALITY OF DEBT

You will graduate in the near future and will begin working. You negotiated the offer and will be making $$40,000$ per year. After taxes and deductions, you will bring home $70\%$ of that $$40,000($$$28,000)$ or $2,333$ per month. This is what you will have to live on each month. Rent, utilities, food, etc. must come out of the $$2,333\mathrm{.}00$ each month. These are living expenses.

But you also have debt. See the table below.

A B C D E F G

ITEM PURPOSE DEBT BALANCE INTEREST RATE MONTHLY PAYMENT MONTHS TILL PAID OFF TOTAL PAYMENTS & INTEREST

STUDENT LOAN SCHOOL $$22,0006\mathrm{.}8$ $$253\mathrm{.}00120$

CREDIT CARD MISC. $$300018\mathrm{.}9$ $$12033$

STORE

CARD CLOTHES $$150012\mathrm{.}9$ $$7523$

TOTAL

IN THE ABOVE TABLE, FILL IN TOTAL PAYMENTS & INTEREST FOR COLUMN G AND YOUR TOTALS FOR COLUMNS C$,$ E AND G

What percent is the Column E total of your $$2,333$ take home pay?$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

THINK ABOUT

WHAT IS YOUR DEBT? How do you compare to the above example? It is important to know the answers to these questions now so you can budget properly in the future. You can see from the example above that debt eats up your money and is an opportunity loss as it relates to savings. If your making debt payments that is money you could have saved.