Helpful Definitions

MORTGAGE
Mortgage amount - Original or expected balance for your mortgage.

Interest rate - Annual interest rate for this mortgage.

Term in years - The number of years over which you will repay this loan. The most common mortgage terms are 15 years and 30 years.

Monthly payment - Monthly principal and interest payment (PI).

Total payments - Total of all monthly payments over the full term of the mortgage. This total payment amount assumes that there are no prepayments of principal. $1,200.

Total interest - Total of all interest paid over the full term of the mortgage. This total interest amount assumes that there are no prepayments of principal.

Prepayment type - The frequency of prepayment. The options are none, monthly, yearly and a one-time payment.

Prepayment amount - Amount that will be prepaid on your mortgage. This amount will be applied to the mortgages principal balance, based on the prepayment type.

LOANS
Monthly - payment Monthly payment for this loan.

Interest rate - Annual interest rate for this loan. Interest is calculated monthly on the current outstanding balance of your loan at 1/12 of the annual rate.

Term - Number of months for this loan.

Loan amount - Total amount of your loan.

NET WORTH
Home - Current value of your home. This should be as close as possible to the actual market value of your home. If you have owned your home for a number of years, the current market value could be significantly higher than your original purchase price.

Other real-estate - The value of any other real-estate you may own. Include second homes, undeveloped land, rental property or any commercial buildings you may have an interest in. As with your home, use the actual market value of this real-estate.

Automobiles - This is the total value of all automobiles that you own. Do not include any leased vehicles.

Other vehicles - If you own any other vehicles, such as RVs, campers or collectibles, enter them here.

Jewelry - The value of any jewelry, gems or precious metals such as gold. If you have owned these items for a number of years they may have appreciated in price, remember to use the current market value.

Household items - The value of your household goods and items. This would include items such as furniture, home electronics, silverware, etc.

Checking and savings - The current total balance of your checking and savings accounts.

Retirement accounts - The current total balance of your retirement accounts. This should include IRAs, 401(k) savings, SEP IRAs, variable annuities and any other retirement savings you may have.

Savings bonds - If you own any Savings Bonds enter the total here.

Bonds - If you own any Treasury, municipal, or commercial bonds enter the total here.

Mutual funds - If you own any mutual funds, enter the total here. Do not include any mutual funds that are in your retirement accounts, they were already included in the "Retirement accounts" line.

Stocks - If you own any individual stocks, enter the total here. Again, do not include any stocks that are held in a retirement account.

Cash value of life insurance - Some life insurance has a cash value. This is true for Whole Life and Universal Life policies. Term Life policies, on the other hand, have no cash value. If you have life insurance with a cash value, enter the total here. Remember, this should be the cash value of the policy, not the amount paid out if you were to collect on the policy.

Cash - If you have any other cash, enter the total here.

Other - If you have any other assets of value, you can enter the total here.

Home mortgage principal - This is the current principal balance remaining on your mortgage. This is the amount that you would have to pay to own your home free and clear.

Other mortgage principal - This is the current principal balance for any other real-estate mortgages you may have. This includes mortgages on rental property, undeveloped land, commercial property or any other real-estate.

Auto loans - Total amount you currently have outstanding on your auto loans.

Student loans - Total amount, if any, that you currently owe in college or student loans. You should enter the total outstanding even if these loans are currently in deferment.

Other loans - Total amount, if any, of any other loans you may have.

Credit card debt - Your total credit card debt.

DEBT MANAGEMENT
Credit cards - Enter up to 10 credit card accounts, one on each line.

Balances - Enter up to 10 credit card accounts, one on each line.

Interest rates - The average annual percentage rate you pay. This interest rate is calculated for each of the categories of debt you have including credit cards, Auto Loans and other installment loans. For credit cards the rate you enter is used to calculate the interest on all future credit card payments. The length of time to pay off this credit card may be much greater than calculated if you enter a low promotional interest rate that is only good for a short period of time.

Auto loans - Click on the details button to enter any auto loans you may have. The details page is designed to let you enter your current monthly payment, the term (in months), the starting balance, the number of months you have left. It then calculates your outstanding balance and interest rate. You can enter up to three installment loans.

Other loans - Click on the details button to enter any additional installment loans you may have. The details page is designed to let you enter your current monthly payment, the term (in months), the starting balance, and the number of months you have left. It then calculates your outstanding balance and interest rate. You can enter up to six installment loans.

Payment - This is your initial monthly payment. For credit cards, if you checked the "use credit card minimum payments" box, your monthly payment is calculated as 2% of your current outstanding balance. With the "use credit card minimum payments" box checked, your monthly payment will decrease as your balance is paid down. This can greatly increase the length of time it takes to pay off your credit cards. Uncheck this box to enter your own monthly payment that will remain the same until your balance is paid in full.
( We calculate your minimum monthly payment as 2% of your current outstanding balance. While your actual minimum monthly payment may be slightly different, this is one of the most common methods used by credit card companies to calculate minimum payments.)

COLLEGE SAVINGS
Age of children - Current age of your children. This calculator is based on each child beginning their college education at age 18. The difference between their current age and 18 is the number of years you have to save.

Annual tuition - Current estimated cost of one year of tuition and books. This amount should be per child and be specific to the school they may be interested in attending. The cost of college for the 2001-02 school year, including tuition, room and board, books, supplies, transportation and other personal expenses, as reported by the College Board was $12,000 for one year at a four-year public college and $26,000 for one year at a four-year private college. For the purposes of this calculator all expenses are assumed to be due at the end of the year.

Room and board - Current estimated cost of one-year room and board. Like tuition and books, this amount should be per child and specific to the school they may be interested in attending. For the purposes of this calculator all expenses are assumed to be due at the end of the year.

Education cost inflation - This is the percentage that you expect educational costs to increase per year.

Current amount - The total amount you currently have saved for your child's (or children's) education.

Monthly contributions - The dollar amount you plan to save per month toward your child's (or children's) education. All amounts are assumed to be added to your account at the beginning of the month.

Rate of return - The annual percentage rate you expect to earn on your educational savings. The average annual rate of return for the U.S. stock market has been about 11%. You may wish to use a more conservative rate of return if your child is within 10 years of enrolling in school. This calculator compounds all growth annually. For the purposes of this calculator, taxation is not factored into the results. If you pay taxes on the interest, dividends or capital gains from these investments you may wish to enter your after-tax rate of return.