Comments on: Question of the Day – What’s Your Total Debt to Income Ratio http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Sat, 21 Nov 2009 13:00:57 -0800 http://wordpress.org/?v=abc hourly 1 By: kim http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/comment-page-1/#comment-429854 kim Mon, 13 Jul 2009 01:35:18 +0000 http://allfinancialmatters.com/?p=3607#comment-429854 Isn't debt/income ratio the percentage of your income it takes to service debts monthly? In that case my ratio is 11% for my mortgage. Under 20 is usually considered good. Isn’t debt/income ratio the percentage of your income it takes to service debts monthly? In that case my ratio is 11% for my mortgage. Under 20 is usually considered good.

]]> By: Moneymonk http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/comment-page-1/#comment-429263 Moneymonk Wed, 08 Jul 2009 20:35:36 +0000 http://allfinancialmatters.com/?p=3607#comment-429263 0.18 0.18

]]> By: Liz http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/comment-page-1/#comment-428859 Liz Mon, 06 Jul 2009 12:44:57 +0000 http://allfinancialmatters.com/?p=3607#comment-428859 Canadian Capitalist, why are you allowing people to try and scam your readers? For shame! Canadian Capitalist, why are you allowing people to try and scam your readers? For shame!

]]> By: Gerard http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/comment-page-1/#comment-428845 Gerard Mon, 06 Jul 2009 10:14:12 +0000 http://allfinancialmatters.com/?p=3607#comment-428845 Mine is 0. However, I think you need to look at NET debt to income to make this more meaningful. So you would look at the debt you have less any available cash and divide that by income. In this case, probably makes more sense to look at net income as well The other thing to note is that this ratio is going to differ depending on what stage of your life... the ratio is going to be pretty high if you have just come out of college (student loans) or have bought a house... Mine is 0.
However, I think you need to look at NET debt to income to make this more meaningful. So you would look at the debt you have less any available cash and divide that by income. In this case, probably makes more sense to look at net income as well
The other thing to note is that this ratio is going to differ depending on what stage of your life… the ratio is going to be pretty high if you have just come out of college (student loans) or have bought a house…

]]> By: Don http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/comment-page-1/#comment-428767 Don Sun, 05 Jul 2009 23:18:50 +0000 http://allfinancialmatters.com/?p=3607#comment-428767 I guess I'm around 2.2, but I also wonder at the usefulness of the number. Generally speaking my finances are pretty much in order. I'm about 5 years into a 30 year mortgage (my only debt), although I am on track to have it paid off about 20 years from now (i.e. 5 years early). My general goal is to retire at age 59, and by my calculation I am essentially on track to do it. So what does 2.2 mean? Anything useful? Sure, I'd like the number to be lower, and I suppose it could be a lot lower if I stopped my retirement saving and pumped money at my mortgage. I don't know what to suggest as a replacement for debt-to-income. My net worth would have to include the value of my house and land. Counting my assets leaves me in the black though, no net debt. I guess I'm around 2.2, but I also wonder at the usefulness of the number. Generally speaking my finances are pretty much in order. I'm about 5 years into a 30 year mortgage (my only debt), although I am on track to have it paid off about 20 years from now (i.e. 5 years early).

My general goal is to retire at age 59, and by my calculation I am essentially on track to do it. So what does 2.2 mean? Anything useful? Sure, I'd like the number to be lower, and I suppose it could be a lot lower if I stopped my retirement saving and pumped money at my mortgage.

I don't know what to suggest as a replacement for debt-to-income. My net worth would have to include the value of my house and land. Counting my assets leaves me in the black though, no net debt.

]]> By: kingkobra85 http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/comment-page-1/#comment-428763 kingkobra85 Sun, 05 Jul 2009 22:37:33 +0000 http://allfinancialmatters.com/?p=3607#comment-428763 #1: January-June, if your birthday falls here send ten dollars to dee207@yahoo via paypal. If your birthday is after June, send to kingkobra85@yahoo via paypal, both with the message: HERES A 10 DOLLAR GIFT FOR YOU. After that, put your e-mail that corresponds with your paypal BUSINESS account in the place of the e-mail address u sent the money 2 and repost this to 50 different message boards and in 1 months time, you’ll have an impressive amount of money in your paypal account. –kingkobra85 #1: January-June, if your birthday falls here send ten dollars to dee207@yahoo via paypal. If your birthday is after June, send to kingkobra85@yahoo via paypal, both with the message: HERES A 10 DOLLAR GIFT FOR YOU. After that, put your e-mail that corresponds with your paypal BUSINESS account in the place of the e-mail address u sent the money 2 and repost this to 50 different message boards and in 1 months time, you’ll have an impressive amount of money in your paypal account. –kingkobra85

]]> By: David Smith http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/comment-page-1/#comment-428752 David Smith Sun, 05 Jul 2009 21:32:36 +0000 http://allfinancialmatters.com/?p=3607#comment-428752 I agree with S. B. this ratio is not a good indicator of financial health. I agree with S. B. this ratio is not a good indicator of financial health.

]]> By: KCSM http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/comment-page-1/#comment-428629 KCSM Sat, 04 Jul 2009 23:26:34 +0000 http://allfinancialmatters.com/?p=3607#comment-428629 Mine is 2.16, which is kinda funny as we have no other debt but our home and our net worth is over $200k. I have a fully funded emergency fund and save quite a bit of money each month. Our mortgage is also less than the 30% of income that banks recommend. Mine is 2.16, which is kinda funny as we have no other debt but our home and our net worth is over $200k. I have a fully funded emergency fund and save quite a bit of money each month. Our mortgage is also less than the 30% of income that banks recommend.

]]> By: MKL http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/comment-page-1/#comment-428549 MKL Sat, 04 Jul 2009 02:34:44 +0000 http://allfinancialmatters.com/?p=3607#comment-428549 Currently, it's 0. House paid for, cars paid for, no consumer debt at all. However, we're five years away from 1st Child going to college, and I will be 100% honest and say taht our original approach to saving for this (529 plan) has not done so well over the past couple of years (which should be no surprise). So I'm hoping we do not have to see this number creep up in a few years. Currently, it's 0. House paid for, cars paid for, no consumer debt at all. However, we're five years away from 1st Child going to college, and I will be 100% honest and say taht our original approach to saving for this (529 plan) has not done so well over the past couple of years (which should be no surprise). So I'm hoping we do not have to see this number creep up in a few years.

]]> By: Beth http://allfinancialmatters.com/2009/07/02/question-of-the-day-whats-your-total-debt-to-income-ratio/comment-page-1/#comment-428548 Beth Sat, 04 Jul 2009 02:29:27 +0000 http://allfinancialmatters.com/?p=3607#comment-428548 I would have thought the ratio would be higher if mortgages are involved. Right now I'm at .15, but when I buy a small place, that will be around 4! Craziness. I would have thought the ratio would be higher if mortgages are involved.

Right now I'm at .15, but when I buy a small place, that will be around 4!

Craziness.

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