• Niela Maryam Hampton

Budgeting During Times of Crisis: Part 2

Track your income and examine your debt to income ratio.

Last week we went over how to track your mandatory monthly expenses, including some great ways to keep it all organized. This week we'll cover how to track your income and assess your debt to income ratio.


Step 1: Review your income statements and pay stubs.

Find a safe space to keep track of your monthly income records. You can use a designated planner, a journal, budgeting apps like Mint or Mobills, or a budgeting spreadsheet to keep your records readily available. 


If you receive payments through checks or direct deposit:

  • You can also track your income using your pay stubs and checking account deposit records from your bank or credit union.

If you are self-employed:

  • You can also use a tax calculator to help you get the approximate amount you will owe back at the end of the year for Federal, State and Local taxes.

If you are employed and have an online portal for your job:

  • Most companies have online records of your payroll history which you can access anytime to review your statements. Log into the online portal for your place of work to see how much you’re earning monthly. 

  • If you're unsure of how to access these records, ask your Lead Employer or Payroll Department for help.

Step 2: Assess your immediate monthly debt to income ratio.

Now that you've tracked your income and expenses, take the average numbers and divide them to determine your debt to income ratio or percentage.

For example, if your average expenses are 2,000.00 a month, and you earn around 6,000.00 a month, you will divide 2,000.00 by 6,000.00 to equal 33%.

Tip: A sweet spot for the debt to income ratio is 28%. 

Step 3: Assess what's next by answering the following questions.

What's my current debt to income percentage?

What do I want it to be in order to feel secure?

What needs to happen to get me there?


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