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04-10-2016, 09:32 PM #1
Amount of debt to be paid off in relation to income
First time poster. I cannot seem to find this answer anywhere. How much debt should I be paying off in relation to my income? I understand it's subjective to how deep one wants to cuts one's lifestyle. I just want to make sure I am on track. Currently we have paid off $25,000 in the last 12 months with an income of $70,000 a year. Any input would be greatly appreciated.
04-10-2016, 11:15 PM #2
I'd say that's a pretty good amount! I think it really depends on what your bills look like.
04-11-2016, 01:46 AM #3
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The answer is as much as you can w/o making your life so tight it sucks,while still paying your bills and meeting obligations. I am going to "assume" you have that baby E fund in place. Paying off debt in relationship to your income isnt a thing.
Veiw debt as a temp situation like getting syrup spilled all over you. At first it tastes good and then its sticky and dries awful. So shed it fast. WE got jobs,extra jobs,cashed in our whole life and got term,sold stuff and changed how we thought about money. We have no debt now for 3 years,own our home and an old van,just bought my DH a newtous 2015 car for $18,500. My DH is off work now for 3 months w/ surgery and we have a stash of cash w/ no worries.
And I do also think you are doing well dumping it.
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04-11-2016, 06:42 PM #4
04-11-2016, 09:03 PM #5
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I get where you're coming from because if you're only dedicating only 1% of your net income to debt pay-off, you might not be serious about it and if you're dedicating 99% of your net income to debt pay-off one might question why you're in debt. The answer is somewhere in the middle.
Unlike calculating how much of your income you should have in vehicles (as Dave does), debt is erased by means other than earned income. For instance, you can sell assets to erase debt. You negotiate a lower debt. You can temporarily increase income and put that toward debt. Since the goal is ZERO debt, the point is to get to the goal as quickly as you can.
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