First Date: Getting to Know You.

In preparation for your first date - get yourself a pad and pencil, or open up a spreadsheet like Microsoft EXCEL, or if you use money management software such as Intuit’s Quicken or Microsoft Money – turn on your computer and open up your application.

Grab your files, your shoe boxes, or whatever your financial storage units are, and settle in for a re-acquaintance session.


Pull ALL your income statements: List the following:
- Monthly payroll income
- Bonuses
- Self-employment income
- Endorsements
- Royalty revenue
- Expected reimbursements
- Commissions
- Winnings
- Interest Income
- Dividend Income
- Rental revenue
- Any other income you may be receiving

OK, looking pretty good, you have a very attractive package, now if it could only stay that way, but we do have to take a look at all the detractors – first, what do you owe?

Pull ALL your loan files – Some of them may be:
- Student loans
- Home equity loans
- Mortgage loans
- Insurance loans
- 401K loans
- Personal loans
- Auto loans
- Tax debt
- Any other loan obligations

For each of your loans - you’ll need to know the following information - so set up the headings for each column:

- initial amount of your loan
- current loan balance
- date the loan was initiated
- the interest rate you are paying on that loan
- the length of the loan
- Your interest compounding method – is it daily or monthly
- Contact phone number
- Website address

Next, do you have credit card debt?

Pull ALL your credit card account files

For each of your credit card accounts - you’ll need to know the following information – again set up the headings for each column:

- Available credit
- Credit card balance
- Minimum payment
- APR – annual percentage rate
- Penalties and conditions that apply to your cards
- Expiration date of any interest rate promotions
- Contact phone number
- Website address

OK – so this all was pretty easy – in fact, maybe the hardest part was corralling all this information into one space. Now that you have this part of your money organized (in the same place) you have a better chance of keeping on top if it.

It is critical to document EVERY loan, credit card or other debt obligation that you have with the correct balances and interest rates. That includes the obligations of your spouse or partner. Often we may forget temporarily, obligations like student loans or debt that are paid via credit card (to get those miles) on a monthly basis. Take a second pass, to make sure that all the obligations are on paper.

This step will require maintenance – on future dates, as new debts are created, this documentation must be updated.

At this point you have listed and totaled your income, and your debt obligations. Now you can use those two numbers to calculate an important measurement – Your Debt to Income ratio.   

On your next date, you will get to know your expenses, fixed and variable.

Email this information to friends and drop me a comment while you are at it.