Financial Advice

Credit, Credit Score, Financial Advice

Why Your Debt-to-Income Ratio Is So Important

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A person’s credit score is not the only figure lenders look to when determining whether to approve an application for financing. Many times, lenders will also look to the applicant’s debt-to-income ratio (DTI) when making a determination to approve financing.  

A consumer’s debt-to-income ratio looks at whether the individual is bringing in enough income to meet his or her monthly bills. The actual DTI figure is computed by taking the consumer’s gross monthly income and dividing it by his or her monthly debt payments. The result is the person’s DTI.  

Coronavirus, COVID-19, Financial Advice

When You Should Use Your Emergency Fund

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Financial experts recommend that consumers put away a little money every paycheck towards an “emergency fund.”  This money is meant to cover the ‘unexpected expense,’ whether that be a car repair, medical bill, or essential home repair. With the current coronavirus (COVID-19) pandemic and many people losing their jobs, it may be time to utilize your emergency fund.

Financial Hardship

One of the most common circumstances where a person would utilize their emergency fund is in response to financial hardship. The stimulus funds offered by the CARES Act helped for a short period of time, and many landlords, mortgage holders, credit card companies and other creditors have been willing to work with individuals who are struggling to pay their bills as a result of this crisis. However, even with that help, a person may still need to take some money from their emergency savings to pay for bills that need paid. Once your income returns, then begin replenishing the money taken from savings.