Debt is a common and sometimes necessary part of life. Whether it’s for buying a home, or a car, or funding your education, debt can help you achieve your goals and improve your quality of life. However, debt can also be a source of stress and anxiety if it becomes too much to handle. How do you know if you have too much debt and what can you do about it?
How Much Debt is Okay?
Calculating Your Debt-to-Income Ratio (DTI)
One way to measure your debt level is to calculate your debt-to-income ratio (DTI). This is the percentage of your monthly income that goes toward paying your debt obligations, such as mortgage, car loan, credit card, student loan, etc. To calculate your DTI, simply add up all your monthly debt payments and divide t…
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