Total Debt Worksheet - Fiscal Agents Financial Tools

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Total Debt Worksheet

When planning for the future, the amount of debt that you have incurred is just as important as the income that you earn. When debt is unmanageable, it can prevent you from achieving your goals as well as restricting you from being able to obtain financing in the future. For many of us, debt reduction is one of the most important financial goals in our lives since it frees up funds to be used towards other goals.

The key to reducing debt is to minimize interest costs by making frequent and continuous payments. Use the Total Debt Worksheet, below, to determine the amount of debt you currently owe in order to asses how well you are managing it. This will also be a good indicator of how well equipped you are to handle additional debt.

When calculating the amount you presently owe, you should take all types of debt into consideration including credit cards, lines of credit, bank and car loans, and mortgages to name a few.

Type	Outstanding Balance	Monthly Payments	Interest Rate %
	$	$	%
	$	$	%
	$	$	%
	$	$	%
	$	$	%
	$	$	%
	$	$	%
	$	$	%
	$	$	%
	$	$	%
Total monthly payments =		$
		x 12 months =
Annual debt payments =		$

Debt capacity

When thinking about plans for the future, our present level of debt is one of the things that we normally take into consideration.. However, your current debt level may be far more important than you realize. Your present debt level is used to calculate your debt capacity which could greatly affect your ability to afford debt in the future

Debt capacity is simply defined as your ability to handle debt and is largely dependent on the amount of debt you already have. The measure of your debt capacity is known as your Total Debt Service (TDS) ratio which is used by financial institutions when considering a loan application for approval.

Your debt capacity also can provide a window to the future that helps you to determine how financially well-equipped you are to deal with situations such as unemployment, change of job or change in income.

Debt Capacity (Shaded areas totaled automatically)
Total Annual Debt Payments
Annual rent payment (if applicable)
Annual property taxes (if applicable)
Condominium fee (if applicable) (Half of annual fee)
Annual heating cost
Annual alimony payments (if applicable)
Annual lease payments (if applicable)
Total Annual Debt
Annual Gross Family Income
Total Debt Service Ratio (Annual Debt / Annual Income) x 100 =

What does your Total Debt Service (TDS) ratio mean?

As a general guide, financial institutions consider a Total Debt Service (TDS) ratio to be favourable if it is less than 40%. This however, does not mean that you will automatically be approved for a loan or financing just because your ratio is below this level. Financial institutions look at several other factors, including credit ratings, when considering loan qualifications. Your Total Debt Service ratio simply represents your ability to service, or handle, your current debt.

If you find that your ratio is above the 40% level, you should concentrate on finding ways to reduce your present level of debt. Our Tips for effective debt management contain a wealth of information on ways to regain control of your debt. Taking the time to map out your monthly expenses can also help you to identify areas in which you may be able to save money - money that can be put towards your debt reduction plan.

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