Week 08 Application Activity: Debt Calculation

Name: Henry Vladimir Gutierrez Choque

Do you have any debt? ☐Yes ☒No

Part 1: Debt Inventory Chart

In your Life Skill Lesson this week, you were asked to begin collecting and prioritizing any
existing debt information you might have in preparation for this application activity. Follow the
instructions below to begin. If you currently have no debt, skip to Part 3.

1. Gather your debt information. If you currently carry any kind of debt (even if it’s just a
mortgage or car payment), you will be creating your own personal debt inventory chart. If
you have not already, please gather your debt information now.
2. Download and open the Debt Inventory template. Fill out each column for every debt.
Don’t use personal information, just come up with a nickname for each debt that you can
easily recognize (e.g., Credit Card #1, Car Payment, Student Loan, etc.).
a. Organize the debts on your chart in order of lowest balance to highest balance.
This debt will become your top focus in the next step of this assignment (Debt
Rollover Calculator).
b. Save your chart to your computer.

Part 2: Debt Rollover Calculator

In the lesson this week, you also learned the power of the debt rollover method. You have now
listed and prioritized all of your debts in order from lowest to highest balance, using your debt
inventory chart. You are now ready to see how the debt rollover method can work for you.
Please do the following:

1. Go to the Provident Living Financial Calculators website, and click on the link titled
“How soon could I pay off all my debts?” A window that looks like the picture below
should appear.
 2. Insert your own debts from your Debt Inventory template into this calculator, including
all minimum payments.
3. Review your budget and decide if there is any additional money you can contribute to the
minimum monthly payment of your priority debt (i.e., the one with the shortest payoff
period).
4. If you do have extra money to contribute, update it in the “Actual Payment” column next
to the debt you want to pay off first.
5. Scroll down to the “Assumptions” area and change the “Debt Ordering” to be “Shortest
to Longest Payoff Period.”
6. Review the graphs and take note of how quickly you can get out of debt and how much
money you could possibly save.

Part 3: Savings Plan

Now that you have prioritized your debts and experimented with the debt rollover calculator, you
will get to explore different savings options for your long-term financial goals.

Complete the following:

1. Review and consider your current or future savings/retirement savings options.

2. Using your gathered information and your own budgeting information, determine how
much you hope to contribute to your savings on a regular basis. Also, look at what the
average return on it would be using your desired investment option.

3. Plug your own information into this Savings Calculator template to see what your
savings potential is.

Part 4: Application Activity Reflection

Answer the following reflective questions about the exercises you completed above. Save this
revised document to your device.

Reflective Questions:

Debt Inventory and Rollover Calculator (if you currently have no debt, skip ahead to
answer the questions about your Savings Plan):

1. Did you fill out your debt inventory chart? ☐Yes ☐No
2. Did you organize it in order from lowest balance to highest balance? ☐Yes ☐No
3. Did you enter some of your debts from the debt inventory chart into the debt rollover
calculator? ☐Yes ☐No
4. What is the most important thing you learned as a result of this activity? (Please write 1–
2 complete sentences.)
Click or tap here to enter text.
 5. What is one specific goal you would like to set for yourself after creating your debt
inventory chart and exploring the debt rollover calculator?
Click or tap here to enter text.

Savings Plan
6. Did you try out the savings calculator template linked in Part 3 above ☒Yes ☐No
7. What is the most important thing you learned as a result of this activity? (Please write at
least 1–2 complete sentences.)
The power of saving, even with a low interest rate, is very powerful. The amount of
money I could save is amazing, and I can use this information to plan ahead for my
future.
8. What is one specific goal you would like to set for yourself after creating your own
savings plan?
It would be to continue saving money to buy a house or a car, and I can estimate how
much time this goal could take me.

Submission Instructions
Follow the instructions in your course to submit this document for grading and feedback.