Money Matters

Re: What do you consider A LOT of debt?

OceanRunner — Wed, 13 Aug 2008 14:47:12 GMT

I don't really count mortgage debt or student loans as they fit comfortably within your budget... honestly, I don't think a $300K mortgage is that crazy, but then I'm in HCOL world as well. However, I think any CC debt is A LOT. It would make me so uncomfortable to carry a balance.

Re: What do you consider A LOT of debt?

Leeba25 — Wed, 13 Aug 2008 14:20:45 GMT

kmslwsmrs:
The savings, well, although I wish that we had it, our parents (and I'm sure that we're going to get flamed for this one, but to each their own) moreso wanted us to purchase a house and then be able to turn to them if we needed anything, than continue living in our condo and having a decent amount of extra money.

I also would not be comfortable with my parents making my financial decisions. Maybe you meant that they were offering that, and YOU decided you'd rather have it that way .... but the way you wrote it, you're saying that THEY'D rather have you buy the house.

Re: What do you consider A LOT of debt?

Leeba25 — Wed, 13 Aug 2008 14:18:36 GMT

Honestly, either of those situations would make me sick to my stomach. And I live in NJ too, so I understand HCOL.

Re: What do you consider A LOT of debt?

SoonToBeMsP — Wed, 13 Aug 2008 14:02:24 GMT

I think it's relative, for sure. I feel like between our mortgage, car payments, and SLs we have a lot- but using that calculator we are well under the 36%. And that is with *no* CC debt.

If we had any CC debt, that would be too much for me. As it is, I can't wait to get rid of the darn car and SLs!!

Re: What do you consider A LOT of debt?

kmslwsmrs — Wed, 13 Aug 2008 01:04:24 GMT

Guess I should have mentioned that we do live in NJ and if you can find a house under $300k for me in this area, I'd move in a second. I appreciate all the honest answers...I do consider us in a significant amout of debt, but definately not living outside of our means. If something happened, we'd be able to cover it with investments, and luckily we have parents that are more than willing to help out. Every area is different, and we live in a very HCOL area. The savings, well, although I wish that we had it, our parents (and I'm sure that we're going to get flamed for this one, but to each their own) moreso wanted us to purchase a house and then be able to turn to them if we needed anything, than continue living in our condo and having a decent amount of extra money. We do contribute a decent amount to retirement each month and pay toward our CC debt aggressively, and it will be paid off with a teaching stipend come January. Although we have very little wiggle room when it comes to extra funds, we are living a pretty normal, non-impulse life. Again, thanks for all the responses!

Re: What do you consider A LOT of debt?

sweetiebird726 — Wed, 13 Aug 2008 00:45:18 GMT

hit post before I was done... oops!

I would personally consider that a lot of debt, but I personally would prefer to have no unsecured debt at all (read: no cc debt, and no car loans). I checked out the debt-to-income calculator up in another reply, and I think that should help you decide if you have too much debt or not at this point.

Re: What do you consider A LOT of debt?

GreekyPie — Wed, 13 Aug 2008 00:44:02 GMT

Probably anything over $5,000. But I don't include a mortgage in that number - to me, that kind of debt is unavoidable, so it doesn't really count.

Re: What do you consider A LOT of debt?

sweetiebird726 — Wed, 13 Aug 2008 00:41:00 GMT

Wow, and I thought we had a lot of debt. We just got married, bring home about $75K between the two of us, don't have a mortgage yet, but are looking to get one around $175K-ish within a year. Between the two of us we have somewhere between $35 and $40K in student loans, and $8K in cc debt. We also have one car loan for $9K.

Here we were nervous that we were in a bad situation - but we're at least saving about $500 a month towards the house down payment, PLUS my DH is putting money into the 401K each month (my job doesn't offer that, it's a crap nonprofit).

My suggestion - pay down the cc debt, and start SAVING!! Try to do both at the same time, even if it's tight! You can always come up with a specific budget each month that you have to stick to. DH and I did that the minute we merged our bank accounts so we knew exactly what we were spending and what we needed to cut back on to meet our financial goals.

Re: What do you consider A LOT of debt?

Anne Boleyn — Wed, 13 Aug 2008 00:14:00 GMT

I think that its all relative. My husband and I make the same income as the OP, but we have much less debt. However, we have a car loan, and some people believe that we have too much debt since we have the car loan.

Re: What do you consider A LOT of debt?

juliagulia322 — Wed, 13 Aug 2008 00:09:32 GMT

I just wanted to say that it definetly is relative. PP have mentioned that the mortgage is high but depending on where you live depends on the mortgage. I live in NJ and it is hard to find a decent house for less than that and I'm not talking about anything huge I'm saying a two bedroom cape. I guess people are comfortable with a certain amount of debt. I know what mh and I are comfortable with and as long as we are still able to save for retirement I'm fine.

Re: What do you consider A LOT of debt?

ForForever — Wed, 13 Aug 2008 00:02:59 GMT

Kore!:

lilbit07:
while i think 40k is an obscene amount of CC debt, i also wouldn't be comfortable with the mortgage you have on your income. our income is comparable to yours, and i'd never have a mortgage that large. i also wouldn't be comfortable not being able to save anything.

Ditto. I can't imagine having a mortgage that high on $100k/yr, PLUS $75k in student loans, no savings, and a leased car.

Ditto. I consider both those situations to be a lot of debt.

Re: What do you consider A LOT of debt?

MakeLemonade — Tue, 12 Aug 2008 23:59:58 GMT

It varies with income but I think if you have half over your annual income or more in unsecured debt, that would be A LOT of debt.

I wouldn't don't count secured debt.

Re: What do you consider A LOT of debt?

Kore! — Tue, 12 Aug 2008 23:56:54 GMT

lilbit07:
while i think 40k is an obscene amount of CC debt, i also wouldn't be comfortable with the mortgage you have on your income. our income is comparable to yours, and i'd never have a mortgage that large. i also wouldn't be comfortable not being able to save anything.

Ditto. I can't imagine having a mortgage that high on $100k/yr, PLUS $75k in student loans, no savings, and a leased car.

Re: What do you consider A LOT of debt?

LizzieB — Tue, 12 Aug 2008 23:50:23 GMT

It's all relative, but IMHO you both have a lot of debt, especially on your incomes.

Re: What do you consider A LOT of debt?

Olive21 — Tue, 12 Aug 2008 23:49:36 GMT

I totally think it depends on the type of debt, and individual circumstances. Out here in LA someone could just have a mortgage as debt, but that mortgage could be mind boggling to someone in a LCOL area. Personally, I am up to my eyeballs in student loan debt, and I think it's a lot, but I was talking to a coworker who has double what I have and he thinks I have it easy. It's all relative.