When you look at my monthly payments towards debt compared to my income (debt-to-income ratio), you will see why my debt is very bad.
I found his handy calculator to use:
My monthly debt payments eat up 54% of my monthly gross income (pre-tax).
A “healthy” ratio is under 36%. If you are over 50% it is recommended that you get professional help to reduce your debt because you are in trouble.
And, as I will discuss later, my income just recently increased so I was dealing with this debt with even less income. That is why I will often give tips on how to live frugal because I have been living frugally for quite a while just to make sure bills were getting paid.
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Credit Card Debt
- Starting = $37,614
- Paid Off = $30,615
- Current = $6,999
- $25 ING Savings Bonus
Savings Account
- Current = $3,750
