Plan a personal budget from before-tax income and the expenses you actually pay. Enter each line as a monthly or yearly amount, add a combined tax rate, and see whether you have leftover money or a deficit — plus debt-to-income and a category breakdown.
Formula
Every amount is converted to an annual figure, then tax and pretax savings are applied:
annual(amount) = amount × 12 if monthly, else amount
gross = salary + pension + investments + other income
after-tax income = gross × (1 − tax rate)
pretax savings = (401k/IRA + college saving) × (1 − tax rate)
total expenses = housing + transportation + other debt + living
+ healthcare + education + pretax savings
+ other savings + miscellaneous
net = after-tax income − total expenses
monthly = round(annual / 12)
Back-end DTI uses gross income in the denominator. Housing in DTI is mortgage, rent, property tax, home insurance, and HOA — not utilities or maintenance. Loan payments (auto, student, credit card, other) add to back-end DTI only.
Income items are before tax. If you know take-home pay instead, either lower the tax rate toward zero or enter net pay as salary so you do not subtract tax twice.
DTI bands
| Back-end DTI | Category |
|---|---|
| Under 35% | Good |
| 35% to under 50% | OK, with room for improvement |
| 50% or more | Very high |
Examples
Default $80,000 salary
Salary $80,000, investments $1,000, other income $2,000, and a 28% tax rate give $83,000 before tax and $59,760 after tax. Expenses (with the $10,000 401(k) counted at $7,200) total $57,640, so leftover is $2,120 a year ($177 a month). DTI is 27.71% (good); front-end DTI is 20.48%.
Rent at $4,000 a month
The same income with rent raised to $4,000 a month turns the plan into a $29,080 annual deficit ($2,423 a month). Back-end DTI jumps to 65.30% (very high).