Financial flexibility means that you are able to move through the month without pain from your loan and credit card payments. Your take home pay is enough to cover your payments with ease at the same time as paying down your debts.
What you will need to take the Financial Flexibility test:
Net pay amount, current credit card and LOC statements, loan payments amounts for all your loans (this includes car loans, student loans, consolidation loans - just do not include your mortgage payment if you have one), and a calculator.
Select your pay period: Monthly Bi-Weekly Weekly
Enter your net pay: $
Your monthly take home pay = $0.00
Take the total of your monthly payments on all credit cards and LOCs: $
(Visa=$27, HBC=$43, LOC=$95; Total = $165)
Take the total of your monthly payments on all other loans. Do not include your mortgage: $
Your total monthly loan payments = $0.00
Your revolving credit/personal loan service ratio =
Your place on the Flexibility Scale =
No matter where you fit it is a great place to start. That's the point - it is a starting position. You need to know it so that you can watch your flexibility improve over time. The goal is to get this number as low as possible. To decrease your ratio you either have to pay down your debt or increase your income.