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Credit Counselor

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AVG. SALARY

$48,310

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EDUCATION

Bachelor's degree

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JOB OUTLOOK

Stable

Real-Life Activities

Real-Life Math -- Solution

Your clients need to know their debt-to-income ratio. That means they need to know what percentage of their income is paid towards bills. They have to know this before they can make changes in the way they manage their finances.

To determine the debt-to-income ratio on a monthly basis, you must first determine the full amount of the debt the couple pays each month. Do this by adding all of the monthly payments.

Monthly payments = $51 + $359.47 + $239.65 + $643.17 + $12 + $28 + $30 + $125 + $80.42 + $36 + $70
Monthly payments = $1,674.71

Then determine the total monthly income of the couple. Do that by first adding the two incomes, then dividing that sum by the number of months in each year.

Total monthly income = $19,670 + $10,800 / 12
Total monthly income = $30,470 / 12
Total monthly income = $2,539.17

Now, to find the debt-to-income ratio, divide the total monthly debt by the total monthly income, then multiply by 100 to get the percentage.

Ratio = ($1,674.71 / $2,539.17) x 100
Ratio = 66 percent

About 66 percent of the couple's total income is paid out each month on debts.

"We use a lot of math," says Judith Stevens. She is an education specialist for a credit cunseling service. "But most of it can be done using a calculator. We need basic math skills. And we use them every day."


Contact

  • Email Support
  • 1-800-GO-TO-XAP (1-800-468-6927)
    From outside the U.S., please call +1 (424) 750-3900
  • North Dakota Career Resource Network
    ndcrn@nd.gov | (701) 328-9733

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