What is the 20/10 rule?

According to the 20/10 rule, Tom's total debt should fall below $10,000. Dividing Tom's annual income into 12 months, we see that his take-home pay is about $4,167 a month. Using the 20/10 rule, Tom should keep his monthly debt obligations below 10% of that number, which equals about $417 a month. When Does the 20/10 Rule Not Apply?

What is the 20-10 rule?

The 20-10 rule is a financial guideline for consumer debt management, where debt payments should not exceed 20% of annual take-home income and 10% of monthly take-home pay. The 20-10 rule calculator allows easy determination of an individual’s maximum debt amount based on income, providing clear guidance on debt limits.

What is the 20/4/10 rule?

The 20/4/10 Rule Calculator emphasizes putting down at least 20% of the car’s purchase price and financing it for no more than four years, which helps achieve these lower monthly payments. By committing to lower monthly debt payments, the 20-10 Rule allows you to manage your finances better.