What's Your Debt to Income Ratio?

I always find it interesting how people often exclude mortgages and student loans as part of their "debt." I hear people say woohoo I'm done paying off my debt and I think to myself -Really? You've paid off that mortgage you took out a year ago?

For some reason we distinguish worth while debt like a student loan or mortgage as not real debt and only count things like car loans and credit card debt as true debt (although I also know people who don't count car loans as debt either).

The hard truth is that if you owe money to an entity you are in debt. I stumbled upon a helpful article explaining how to calculate your debt to income ratio. It's actually quite easy. Add up all your monthly minimum debt payments and divide that by your monthly income and voila- your debt to income ratio.

Anything over 40% is considered not healthy. Under 30% is excellent and 30-36 is pretty good. DH and I weigh in at 43.6%- ouch!

I think it's our 2 car payments that do us in. We both got "new" cars last year and are not even close to paying them off. I was extremely uncomfortable buying 2 cars so close together but my car was on death's door and once I got a gentle used car, DH "needed" his fancy new truck. I wish that I had started my financial challenge just a few months earlier last year so I could have avoided this "mistake." I'll mark this down as a lesson learned to follow my gut.