What is your debt to income ratio

You should start off by looking at your debt to income ratio. Here is a simple formula to help you calculate yours: Let's say that your net monthly income (that's after taxes) is $2500. Your monthly debt payments are $600. Divide $600 by $2500, and you've done it. 600 ÷ 2500 = .24 (24%) So, what's your debt to income ratio?

• Look at last month's bills. Add up all the fixed monthly expenses (rent, mortgage, car payments, insurance, gas/electric, etc.)
• Check your credit card bills and add up the minimum payments required on each.
• Figure out your monthly take-home pay (net salary).
• Divide the monthly fixed expenses by monthly income.

Now, how much debt is too much? The majority of debt settlement and credit counseling companies generally agree that debt expenses should be no more than 25% of your income. A ratio of 10% or less is ideal. Actually, no debt is the best but who are we kidding.. If you are carrying a debt load of more that 25% it's time to take action. You may even want to get some type of debt help by looking into a debt settlement or credit counseling program. If you own real property, you may want to look into some type of debt consolidation loan.

If you find yourself scrambling to make ends meet or just want to learn more about your financial options,
give us a call 1-877-510-1001.