A few simple calculations can tell you whether you're doing fine or staring at debt disaster. And be sure to see how your peers are handling their burdens as well.
"It's not denial. I'm just selective about the reality I accept." -- cartoonist Bill Watterson
People in debt often fool themselves about how bad things really are. They think they can afford their obligations if they're able to swing the minimum payments. Or they assume their credit card bills are about average, when in fact they owe way more than the norm.
Many carry these illusions to the brink of disaster, realizing only too late how deep a hole they've dug for themselves.
Even if the truth won't set you free immediately, it should give you the motivation to stop digging and start paying off your debt -- or to get help if you're really in over your head.
* Compare your credit
To that end, here are four money ratios you should figure out so you really know where you stand.
Leverage ratio
Leverage ratios, which measure total debt against total assets, are used in investing to evaluate relative riskiness. The higher a company's leverage ratio, the riskier that company is as an investment.
The same holds true for household finances.
Learn How To Calculate Your Leverage Ratio.
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