Christine just finished her first year of work following graduation, and she fee

Question

Christine just finished her first year of work following graduation, and she feels it is time she assess her financial situation. Her annual gross income is $45,000, and her income after taxes is $35,800. She has the following liabilities. What is Christine's debt safety ratio, and what does it say about Christine's financial situation? (show work please)

Auto loan:
Balance$ 6,000
Payment$ 265

Education loan:
Balance$10,000
Payment$ 250

Credit card debt:
Balance$ 1,200
Payment$ 58

Personal line of credit:
Balance$ 3,900
Payment$ 195

Home mortgage:
Balance$75,000
Payment$ 550

Explanation / Answer

Debt safety ratio = consumer credit payments / take-home pay =12*(265+250+58+195+550)/$35,800 =44.18% Your debt safety ratio should not exceed 20 percent and should preferably be around 15 percent. Christine's financial situation is weak

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