Ever wondered if you're debt is too much? If that new car or home makes sense financially? Or if you have enough saved for emeregencies?
If so, we have 4 super-easy-to-calculate-rule-of-thumb metrics to share! Listen to the episode to get the specifics on each one.
Consumer Debt Ratio (aim to be under 15%)
Calculation: Non-housing debt / Gross income (annual or monthly- just make sure they match)
Front-end Housing Ratio (aim to be under 28%)
Calculation: Housing debt (PITI & HOA)/ Gross incomBack-end Ratio/ Traditional DTI (aim to be under 36%)
Calculation: All debt / Gross incomeLiquidity Ratio (aim to have 3-6 months)
Calculation: Liquid assets / monthly expenses
🤓 Be a smarter investor in 5 minutes (promise)! Enhance your investing knowledge by understanding 26 most common & confusing financial terms in plain English HERE!
Follow Tess and Gen on Instagram & DM us any questions you have!
Leave us a 5⭐️ Review & share this episode with a friend!
All recommendations and conversations presented in this podcast episode are meant to be used as a guide for general use and educational purposes only. Information is not meant to be taken as explicit financial advice.
