January Month End - Money, Money, Money

 I was going to wait until Monday to wrap up January but I went online to look at my bank account today and lo and behold my Jan. 31st paycheque was already deposited so thankyou schoolboard. I also was happy that I was within a few cents of correctly guessing how much it would be. I hope that I've also guessed Feb. 15th's pay correctly too.  We'll see....

I work all night, I work all day, to pay the bills I have to pay



Ain’t it sad


And still there never seems to be a single penny left for me


That’s too bad


In my dreams I have a plan


If I got me a wealthy man


I wouldn’t have to work at all, I’d fool around and have a _________
 
Title, Artist and fill in the blank!??!  Ahhhhh, it's too EASY!!
 
I'm tired of January but here's one last look at the numbers.  I love that debt and savings are the two biggest parts of my budget by FAR! I was fortunate to be able to pay an extra $148.30 out of misc. spending on my line of credit this month for a total of $1348.30! I am going to beat that LOC into submission!!
 
The other bonus was upping my EF to $1300. I'm going to set a new goal for that one I think. $3,000 instead of $2,000. We'll see, first things first, I need to do my taxes, think about topping up my TFSA instead of my RSP this year, as I'm not looking forward to paying the whopping withdrawal taxes on my RSP $$ once I retire. TFSA makes more sense. I was at my max but took out $5000 last year when I made my PEI house purchase. What I didn't know until recently is that I can put  that $5000 back into my TFSA in the following tax year:) Yippee!!
 
Oops, noticed a mistake in my chart. I meant to divide my insurance payment between Housing and Transportation but I forgot. I pay $205 a month for home and car insurance - isn't that a horrible amount?? Most of it is for the car - having my daughter on as an occasional driver raised it by $50 per month! (And yes, I pay for it:)
 
I'm looking forward to February's challenge - a NO Spend month. I am so ready for this! I've allotted $400 for groceries, $150 for gas and have $185 for misc spending which totals $735. My goal is to squeeze at least $100 from that little budget and throw at my LOC again. I see a month of self-denial ahead (although I have a Starbucks card, a movie card, and a restaurant card, so I won't be too terribly deprived:)
 
Oh BTW - we did catch two movies yesterday - "The Rite" with Anthony Hopkins and "The King's Speech" and LOVED both of them! Colin Firth really should win an oscar for his role as King George VI - but being British I'm a little biased.
 
Happy Weekend everyone - look forward to seeing all of your month end summaries and a No Spend month!

Debt to Income Ratio - It Makes NO Sense!!

Figuring out one's income to debt ratio is a confusing business. There's the front end ratio and the back end ratio...some calculators use gross income, some are for "disposable" income etc etc.

Here's a link for calculating yours if you're interested:

http://moneycentral.msn.com/personal-finance/calculators/evaluate_your_debt_calculator/home.aspx#Results

Canadians' debt to income ratio is the highest it's ever been at 148.1%. What does this mean exactly??  What "they" would have us believe is that for every $100 we earn we pay $148 on our debt. HOWEVER...their calculations are based on "disposable income" and it doesn't state whether they are using gross income or net income and whether such things as mortgage payments are included or whether they are using just personal debt like credit cards and what, if anything, is being deducted in order to determine "disposable income"...things like insurance.

So the 148.1% is kinda ambiguous. All of those variations listed above make a huge difference in one's calculations.

For example:

• if I include my PEI mortgage payment and use my net monthly income my debt to income ratio is 35.7%
• if I don't include my PEI mortgage payment the ratio becomes 31.25%
• if I use my gross income the ratio drops to a jaw-dropping 17% (I got this low ratio using the calculator link provided above for MSN Money

So you can see what different ratios you can achieve by making an adjustment or two which REALLY makes me wonder how "they" achieved the 148.1% ratio.  If anyone can give me a concrete answer on this I am dying to know!! Can you tell I've had a LOT of time on my hands today??