Comments on: How Much Debt is too Much?

By: Dollars Not Debt

Dollars Not Debt — Sun, 31 Jan 2010 04:12:39 +0000

Young people need to realize that a house is they only OK debt. Everything else should be reasonably saved up for before you can afford it. Your great grandmother paid cash, why can’t you?

By: Jake

Jake — Wed, 02 Dec 2009 22:05:44 +0000

I kind of view this as a game, trying to lower the ratios as much as possible.

There’s only two ways to do this, eliminate the debt, or increase the income.

I’ve set goals before to get to certain percentages, and when I had done everything I could to increase my income, it almost became a game to discover new ways to shave a dollar or two off my budget and put that towards paying off my debt.

By: James

James — Tue, 01 Dec 2009 17:08:08 +0000

Jill,

Great posting. What I think this illustrates is that there really isn’t any to improve your ratios except by improving your fundamentals – increasing your income and eliminating your debts.

By: LeanLifeCoach

LeanLifeCoach — Sat, 28 Nov 2009 03:04:57 +0000

I’m with the rest here wanting zero debt. It seems somewhat strange though that the best fico scores come when you have some debt on the books.

By: Rick Vaughn

Rick Vaughn — Sat, 28 Nov 2009 02:11:32 +0000

Interesting post, I know the other commentors here believe that you should have $0 debt. Well that’s great in a perfect world these ratios are definitely more of a good short term goal to shoot for. Thanks for the information.

By: Johanne

Johanne — Thu, 26 Nov 2009 09:13:50 +0000

Although the ratios are a good basis for monitoring debt, I always feel unesy each time I have debt. i think it’s OCD but I always want my debt to be zero.

By: Mrs. Money

Mrs. Money — Tue, 24 Nov 2009 19:43:16 +0000

Wow- very thorough post! Thanks for the explanations. I think ANY debt is bad, but that’s a personal opinion and I’m a little weird too.

By: Financial Samurai

Financial Samurai — Tue, 24 Nov 2009 14:21:18 +0000

Howdy Jill – Thnx for your article and GOOD LUCK on your CFP exam! Actually, I think that would make a fascinating article (the pros/cons/difficulties of getting the exam).

From my perspective, too much debt is when you simply start feeling stressed about your expenses on a monthly cash flow basis. We’re all rational, and will natural strive to pair that stress down through debt reduction.

Ratios help, but listen to your instincts.

Best,

Sam

By: Ken

Ken — Tue, 24 Nov 2009 03:28:14 +0000

My ratios at this point are within the ranges in your post. I still desire to pay off debt as soon as possible. Thanks for the percentages…everyone needs something to compare to…see where they stand.