Debt to Income Ratio

An employee’s personal financial health impacts their work on the job. My experience as a former banker who focused on loans, taught me invaluable insights on managing money.

Over the years, I’ve spent a great deal of time helping employees crawl out of debt, and encouraging them to avoid it in the first place. I use a tool from my previous banking days to assist.

Knowing your Debt to Income Ratio ensures you know where you are, so you can determine where to go. Here’s how the formula works:

1. Figure your gross monthly income. (Before taxes are withheld.)
2. List all of your monthly payments. (For credit cards, do not use your minimum payment, but use 5% of your balance(s).
3. Add annual house insurance and real estate taxes together, then divide by twelve to get a monthly amount.
4. If you are purchasing a home, add your monthly mortgage to home owners insurance and real estate tax monthly figure. If renting, simply use rent plus monthly renter’s insurance. Take whichever amount applies to your situation and divide by gross monthly income. (The percentage should not exceed 24%.)
5. Now add the rest of your monthly payments to your total monthly housing payment. (Include 5% of credit card balances.) This gives you the total debt ratio per month.
6. Divide this figure by your gross monthly income. (This is your total debt to income ratio, and should not exceed 42%.)

The final analysis may sober you, but it will provide an accurate picture of your current financial situation. If you need help in this area, then seek an expert’s counsel. There are many resources available to teach you how to reduce debt. Email me if you would like guidance in this area.

If you resolve to clear your mind and emotions of the negative power of debt, your work will reflect the difference. Freedom from poor financial health allows us to give our best on the job, and we reap even more rewards.

Do you have an accurate picture of your financial situation?


Romans 13:8 (NIV)

Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law.

Anita Agers-Brooks is a Business Coach, Certified Personality Trainer, Productivity Specialist, Certified Team Training Facilitator, Marketing Specialist, national speaker, and author. She lives in Missouri with her husband Ricky.

She’s passionate about business with integrity, healthy marriage, and issues of identity. She travels the country teaching others from her personal experiences and research.

Contact her via website or email


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