Debt benchmarks

Think your finances are sound? Check how your numbers compare to these guidelines from the July issue of Consumer Reports.

How much does your monthly car payments, new credit card charges, and any other non-mortgage debt payments add up to? If it equals more than 20% of our gross monthly income you are spending too much.

Does your mortgage payment equal more than 28% of your gross monthly income? It shouldn't.

How much cash do you have saved up for emergencies like losing your job or falling seriously ill? Aim for six months.

How many months is your auto loan? Opt for one that is no more than 36 months or you may end up owing more than your car is worth.

If you are considering an adjustable rate mortgage check what the maximum amount of percentage points the interest rate can increase over the loan's lifetime. Standard is six points. Add six points to the initial interest rate and calculate the monthly payment - it is your worst nightmare. If the payment, plus taxes and insurance, exceeds 28 percent of your gross monthly income, look for another loan.