Engineering A Solid Future

Alton Moss and Catherine Charles are learning that a blueprint for financial success starts with common goals and full disclosure

He should use the additional savings to continue paying off his debts.

Mitchell says Moss should also apply for a home equity line of credit (even though he only has about $5,000 of equity in the condo). He should then transfer his nondeductible credit card and car loan debt to the line of credit that is tax deductible. He can write off the interest paid on the home equity loan.) Also, assuming that he is in good credit standing, he should shop around to find a low-interest rate credit card. He may be able to get a rate as low as 6% (compared to 15.5%). This would make his debt less expensive as well as allow him to pay it off faster.

Financial Snapshot: Alton Moss

HOUSEHOLD INCOME

Total

$63,000

ASSETS  
Checking

$8,000

Money Market

1,500

Stock

300

Roth IRA

2,500

401(k)

2,275

Home (appraised market value)

110,000

Total

$124,575

LIABILITIES

Credit Card

$5,500

Student Loan

5,000

Car Loan

9,000

Mortgage

106,000

Total

$125,500

Net Worth

-$925

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