Percentage of income toward mortgage/debt

[ironmaiden]

I got this from http://money.cnn.com/galleries/2008/...mag/index.html - click on the OWE icon

28%: Devote no more than this amount of your monthly pretax income to your mortgage.

75%: By age 45, limit your home loans to this portion of your home's value, says Phil Dyer, a financial adviser in Towson, Md.

36%: Spend no more than this much of your pretax income on all debts, including your mortgage and credit cards.

3 months: Set aside three months' worth of living expenses for emergencies. In tough times, six is even better.

What do you think of their advice and how are you doing by its standards?

[IntlMom]

We are doing just fine by these standards. But I think that these standards are too low.

for example: if all we did was make the minimum payment on our mortage, the payment would be 9% of our pretax income.

we are under 45, and we owe only 42% of our home's value. There is NO WAY I would want to owe 75% of it......we want to be debt free!!!

again, 9% of our income goes to (minimum) payments on our home and we have NO credit card payments!!!

3 months?!?!? We have 6 months.

btw - we NEVER would only pay our minimum house payments, and we want to be totally debt free in ONE YEAR.......we will be really close!

[Marie78]

I'm working on saving 3 months or more worth of take home income in case we need it, also known as my EF.

I apply 25% of my take home pay to my debt each month

I don't own a home, we rent and my portion is 25% of my take home pay right now.

I'm doing well by these standards. I do need to beef up my EF, which I just started working on this January 2008 .