Do You Know Your Budgeting Guidelines?

Here are the recommended debt guidelines. Creditors use this guideline when reviewing and approving your credit application.

Housing: Your housing expense (mortgage, rent, taxes, repairs, improvements, insurance and utilities) should not exceed 35% of your income.

Transportation: Monthly car payments, gas, oil, repairs, insurance, parking or public transportation should not exceed 20% of your income.

Debt Budget: Credit cards, personal loans, student loans and any other debt payments should not exceed 15% of your income.

Investments & Savings: Stocks, bonds, cash reserves, art, etc., should be at least 10% of your expenses.

All Other Expenses: Food, insurance prescriptions, doctor and dentist bills and clothing should not exceed 20% of your income.

Take some time to calculate your debt to see how your budget measures up. If you are spending more in one category than the guideline suggest, make a list of what you are buying and brainstorm ways to cut cost in that category. If you are under in one area, you may add the extra percentage to another category.