GRAND RAPIDS, Mich (WOTV)- One of the most given reasons for divorce is financial difficulty. Having a healthy debt to income ratio is important to keep finances from derailing your relationship.Debt load and debt to income ration are terms explaining the amount of debt you owe versus the amount of income you have. Most professionals advise you keep personal debt to no more than 15% of your annual income. This does not include mortgage debt, but does include credit cards, auto loans, school loans and money owed to third parties.
It is easy to figure out your debt to income ratio. Simply add all of your non-housing monthly payments (not including mortgage payment, taxes and home insurance). Take your annual gross income and divide by 12. The resulting comparison is your debt to income ratio. For example, if your monthly income is $2000. and your monthly expenses are $500, your debt to income ratio is 25%.
If you own a home and have mortgage and housing expenses, professionals advise you do not carry more than 36% of your total gross monthly income in debt. This means all of your debts including mortgage payments, insurance and taxes included.
Keeping a lid on your personal debt takes one area of strain off of your marriage. You don’t want to take on new payments if your debt load is already approaching the maximum advisable and put so much financial strain on your relationship that it puts your marriage in jeopardy