Your debt-to-income ratio compares the amount of money you earn to the amount of money you owe to your creditors. It's an important indicator of your financial health and whether you have control of your spending.

To calculate your own debt-to-income ratio, tally up your predictable, recurring debts, your mortgage, car payment, insurance, etc. and divide it by your gross monthly income. If the resulting number is low, then you probably have your spending in check and your financial situation under control. If the number is high, then you probably have some work to do and need to find ways to get out of debt. Following are some steps you can take to reduce your debt load.

  • Compare your credit card interest rates and pay down the ones with the highest rate first.
  • Make more than the minimum payment on at least one account at a time.
  • Save for large purchases and shop for items on sale.
  • Pay bills on time to avoid late fees.
  • Establish an emergency fund for unexpected expenses.

Ally Bank is committed to helping you make smart decisions with your money. Take a look at all the ways we can help your money work its hardest with our Online Savings Account, Money Market Account and Ally Bank CDs—all of which can be opened and funded with any amount and no monthly maintenance fees. Learn more at or call live, 24/7 customer care at 877-247-ALLY (2559) today.

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