00:00Hey, my name's Priya Malani, and I'm the founder of Stash Wealth.
00:04Recently, it feels like everyone's talking about credit scores.
00:06And while it's certainly a number to pay attention to,
00:08it's not the only measure of your financial health.
00:11Today, we're talking about DTI.
00:13It stands for debt-to-income ratio.
00:16And in a nutshell, DTI is really just how much of your income
00:19goes to paying off debt each month.
00:20So based on how much money you make,
00:22how much you're able to use to pay for life,
00:24and how much is just going right back out the door
00:26to pay for various stuff you've already bought but are still paying off.
00:29A bank looks at your DTI to determine how much debt you're managing
00:33relative to your verified monthly income.
00:35The more debt you're managing,
00:37the less inclined they are to let you borrow more.
00:39Let's say your salary is $60,000.
00:41$60,000 divided by 12 is $5,000.
00:43That's your monthly gross income.
00:45Next, add up all your monthly debt obligations.
00:47So let's say for this example, you have a $200 car payment,
00:49$1,000 going to rent, $1,200.
00:52Take your monthly total debt and divide it by your monthly gross income.
00:56$1,200 divided by $5,000, 24%.
00:59That's your DTI.
01:01We always say in finance that there's really only two main levers you can pull.
01:04You can either earn more or spend less.
01:07Obviously, earning more is a lot more fun.
01:09Keeping an eye on your DTI and getting it in check is a great way to adult.
01:14And it will be so helpful if you're thinking about buying property.
01:16The Turbo app is the only one on the market that combines DTI,
01:21credit score, and verified income,
01:24making it one of my top picks for 2018.
01:27So if you're looking to get more clarity on your numbers
01:29so that you can get your financial shit together this year,
01:31definitely check it out.
