Overview
Elizabeth has been rebuilding her credit from a previous bankruptcy in 2005. As a result, her car loan and most of her credit cards carry high interest rates. She has a total of six credit cards, four of which have balances at interest rates as high as 23.99 percent. On three of the cards, the balances are $500 or less, but one card carries a $1,500 balance at 14.9 percent. She must be particularly careful to resist the lure of credit cards as she had accumulated $60,000 in credit card debt before filing bankruptcy.
The balance sheet, assets and liabilities
Elizabeth keeps close track of household income and expenses, with monthly household expenses averaging $3,700. Her current emergency savings of $2,800 is spread between two high-yield savings accounts, and she contributes a total of $230 per month to these accounts. She also has $1,300 in T. Rowe Price Spectrum Growth fund, a fund of funds focusing on large company stocks, and is contributing an additional $50 per month to that.
 |
This report was prepared by Bankrate
Senior Financial Analyst Greg
McBride, CFA. |
 |
|
