Consumers Keep Sight of Their Financial Goals Amidst Summer Spending

ORLANDO, Fla., May 5, 2001 --- Many consumers lose sight of their financial goals when tempted by vacations and summertime fun. Yet the slow days of summer are the perfect time to make a mid-year financial evaluation, according to the nation's largest credit counseling organization.

InCharge® Institute of America, Inc., counsels thousands of consumers who are in financial distress every year. Sadly, many of these consumers had no idea how dire their personal financial status was until it was almost too late to remedy, a situation known as "creeping indebtedness." Regular financial evaluations can make consumers more aware of their financial situation and help them avoid this situation.

"Many consumers are confident that they are right on track with their personal finances," says Tim Raftis, Vice President of Customer Outreach at InCharge® Institute. "Unfortunately for some of them, they may discover an entirely different situation when they undergo an objective financial evaluation."

According to Raftis, an experienced credit-counseling industry professional, a calculation of their debt-to-income ratio is one of the quickest and easiest ways for consumers to evaluate their finances. Consumers are welcome to use the free debt-to-income calculator at www.incharge.org.

Consumers without Internet access don't have to pay an accountant or financial analyst for a professional evaluation of their debt-to-income ratio. They can do it themselves just as accurately. Raftis explained how consumers could evaluate their finances in just 4 simple steps:

Add up monthly income from all sources. Be sure to include alimony/child support, interest, etc.

Add up monthly expenses, excluding rent/mortgage payments: food, clothing, car, credit card payments, etc.

Divide total monthly debt payments by total monthly income. The resulting percentage is the debt-to-income ratio.

Evaluate the result. The ideal ratio is less than 15 percent; a debt-to-income ratio above 20 percent is a financial warning sign. Because it measures a consumer's ability to pay, a debt-to-income ratio is a powerful indicator of an individual's financial stability. Keeping a watchful eye on this ratio will help consumers on their quest for financial freedom.

The InCharge® Institute of America is a non-profit 501(c)(3) corporation with Headquartered in Orlando, Florida, InCharge^® Institute of America, Inc. is a national non-profit organization specializing in personal finance education and credit counseling. The InCharge Institute family includes InCharge^® Education Foundation, which publishes YOUNG MONEY^® magazine and Military Money^™ magazine and offers basic financial management education to clients and the general public, and InCharge^® Debt Solutions, which provides professional credit counseling and financial education services. InCharge is a member of the Association of Independent Consumer Credit Counseling Agencies (AICCCA).