The next step to determining your debt-to-income ratio is calculating your monthly income.
Start by totaling your yearly income. Add up your yearly:- Gross income
- Bonuses or overtime
- Alimony/child support
- Other income
Example
Remember, Sam spends $1,540 each month on debt payments. This is what he receives in income each year.- annual gross income = $42,000
- child support = $6,000
Let's divide his annual income by 12 for his monthly income.
$48,000 / 12 = $4,000 monthly income

