What is your DTI (Debt-to-Income Ratio)?

One thing I love about these calls is how much real, lived wisdom flows through every woman here. Towards the end of our conversation, our Powerful Creator Michelle Rodriguez dropped some gems that deserve their own spotlight. 💎

Know Your DTI (Debt-to-Income Ratio)

Michelle reminded us: financial clarity is power. One key number every wealthy woman needs to know is her DTI.

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💡 What is your DTI?

DTI stands for Debt-to-Income Ratio: a key financial metric that shows how much of your monthly income is going toward paying off debt.

DTI = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100

📊 Quick Example: If your monthly debt = $2,000 and your gross income = $6,000, then:

DTI = (2,000 ÷ 6,000) × 100 = 33.3%

This means 33.3% of your income is tied up in debt.

Valuable information when you’re creating a path toward freedom.

This includes things like:

• Mortgage or rent

• Credit cards

• Car loans

• Student loans

• Personal loans

✅ Why It Matters: Lenders use your DTI to decide if you're a low-risk borrower.

If your DTI is too high, you could get denied for credit, even if you make good money.

It impacts whether you can qualify for things like a home loan, a car lease, or even some rental applications.

On the flip side, a healthy DTI gives you leverage. It says: I manage my money well, and I’m ready for more.

Knowing your DTI helps you make smarter decisions, like when to pay off a card, refinance a loan, or delay a big purchase until your ratio improves. It’s not just a number; it’s a mirror. It shows you where your money is going and how free (or tight) your cash flow really is.

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✨So what’s a good DTI? What number should we actually aim for?

Let’s break it down, because this is where the “what the heck, is this bad?” moment usually hits 👀:

• Ideal: Below 36% — This is the sweet spot. It means you have breathing room, and lenders will typically see you as financially healthy.

  
  

• Acceptable (for a mortgage): Up to 43% — Still workable, especially if the rest of your application is strong. This is often the cutoff for mortgage approval.

  
  

• High: Over 50% — ⚠️ This is a red flag. It signals financial strain and puts you at risk of getting denied for major credit moves. Time to pause, regroup, and make a plan.

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🧮 How to Actually Calculate Your DTI

Let’s walk through it step by step so you can get your number in real time.

Step 1: Know Your Total Monthly Debt

Add up all the debt payments you make every month. This includes:

• Credit cards (minimum payments)

• Car loan

• Student loan

• Personal loans

• Mortgage or rent (yes, rent counts here too)

👉 Write down that number. That’s your total monthly debt payments.

Step 2: Know Your Gross Monthly Income

This is the amount of money you make before taxes and deductions.

💡 Gross = your full paycheck amount before anything is taken out.

If your income varies (like you’re self-employed or commission-based), take the average of your last 2–3 months to get a solid estimate.

Step 3: Plug it into the formula

DTI = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100

Run the numbers. Get the percentage. And don’t judge it. Just notice it.

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Closing:

This number isn’t about shame, it’s about power.

Your DTI doesn’t define your worth. It gives you clarity so you can create change. Whether your number is in the “ideal” zone or the “high” zone, you now have the awareness to start moving differently.

✨ Ask yourself:

• What can I simplify, consolidate, or pay off?

• Is it time to increase my income, even slightly?

• What feels heavy and what would create more peace?

Every adjustment counts. You’re not stuck, you’re becoming more financially solid, one choice at a time.

With love & power,

Amber Breanna 👑

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Disclaimer: This is not financial advice. It’s for educational and empowerment purposes only. Always consult a professional before making financial decisions.