How Much is Too Much Debt?
When you charge a purchase or take out a loan, you are borrowing from two people: the lender and your future self.
Every dollar borrowed today is a dollar less to spend from your next paycheck. Knowing how much debt you can manage is crucial to avoiding problems with debt management — and it also impacts your cash flow.
Debt-to-Income Ratio Guidelines
Here are some general guidelines to assess your ratio, but keep in mind that everyone is different. You might have other factors, such as anticipated irregular income, mortgage payments, home costs or emergency reserve funds that influence how much debt you can afford to carry at a given time.