Christian Debt Recovery

Good Debt To Credit Ratio

March 10th, 2011 |

Author: Gavin

What the recommended Debt to Income ratio – Reduce Debt Reduce Stress

Debt to Income Ratio remains on the rise. Statistics Canada report (June 21, 2011) says the ratio of household debt to disposable income in the quarter rose to 149.47 per cent. That means Canadians owe $1.49 for every after-tax dollar they earn.

“The haves will hold their own. The have-nots will be in peril” said Rock Lefebvre, CGACanada’s vice-president of research and standards. This translates to, if you are in Debt! that means, you are in serious and immediate financial danger.

The Report says households “can’t fully resist the lure of interest rates at persistently rock-bottom levels.” quoted by Bank of Montreal economists Douglas Porter and Sal Guatieri.

If you are keeping an eye on the economy, watching interest rate and keeping your head to the ground; this may be more than just a same rattle and shaking that you hear in the news. This might be the warnings of a financial Tsunami heading our way. From a personal point of view that translate to putting your assets, saving, long term retirement funds or even child education in danger.

This contributed to widening the gap between the haves and have-nots. Carrying Debt is one source of stress. Little Debt is like carrying little weight, makes you feel good, look good and under control, what might be called acceptable debt to income ratio or what some might say it is the recommended debt to income ratio. It is when you carry this Debt for a longer period of time and your income not longer able to support that extra Financial burden that the danger bell start to ring.

Think of what do I need to take control over my Debt?

The first step is to assess your financial situation.
- Income, expenses, Debts, Credit Card Debt, Saving, Assets
If you are in a Debt situation, quantify the level of Debt that you are at and how much can you personally tolerate.
Immediately look at ways to
- how to reduce expenses especially the recurring one.
- if you can only pay the minimum on Credit Card Balances, then get immediate help reduce credit card debt
- start thinking immediately “how can i reduce my credit card debt”?
Use any tool, spreadsheet or method to keep on top of Debts.

Check out other articles about Personal Debt Management or download the Free Debt Tracking Tips and worksheet.

About the Author

Z. Bouri is a Financial counselor at Debt Payoff Canada inn the Toronto GTA area.

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