How much Debt is too much

How much debt is too much? Well, it depends on many things. If you make 7 figures and have 7 figure debt it will seem like a lot to someone who makes 5 figures. I prefer to use a ratio as opposed to a figure. If you owe more than 100% of you annual income then you have too much debt.

Debt management comes down to the individual. If you are shoulder high in debt then you need to make plans to free up disposable income with your existing expenses before seeking additional income. Once you have freed disposable income you can accurately assess how you want to reduce your debt.

If you can remember a time where you used to receive offers left and right for credit cards or other financing invitations than chances are you have too much debt. It is important to treat your debt like a kid, when left unattended it can become troublesome. Debt in this economy can still be managed. You have to be willing to take calculated risks in order to free up income or put yourself on a better path free from debt.

A good way of knowing you have too much debt you have trouble taking out a loan to make a financial investment. If you are having trouble financing an investment such as a house or business chances are you have too much debt. A good rule of thumb is too keep debt under 30%. You don’t have to eliminate all debt because no debt is means you no longer can build credit.

The best way to gauge if you have too much debt is when you ask yourself how much debt is too much? The best way to get out of debt is to stop incurring new debt and cutback on what you have. Fairly assessing yourself and creating a plan is a huge step towards getting out of debt. If you stumble be sure to seek professional advice.

Debt is no joke. Plan to get ahead and stay ahead. Good luck!