What is 'acceptable' debt now?

nellis10

I think most people who are on hee now would class £0 as acceptable debt excuding mortgages (or in some cases including mortgages). At the moment I have 4 debts:

Mortgage - 184000
Car Loan - ~4800
Business Loan (for DH's takeover) - ~4000
Credit Card - 3000

Now of all those debts only the CC do I consider unacceptable caused through under-budgeting on my part. BUT my aim is to tackle every one of those debts eventually. Now dh will probably pay back the business loan very soon so I am not concerned with that. The Mortgage is a joint one and we are paying that at the moment, but not overpaying it. The CC and the Car Loan are my two killers (not that I cannot afford them, but that I don't want them!!), hence I am back on MSE to give me the veritable Kick in the Pants I needed to look at my finances again!

linniestorm

I'm sure the moneyweek lady merryn somerset webb once said if you're using more than 20% of your income to service your debt, you're in trouble! So there's probably some fancy calculation whereby if you assume that's paying the minimum payment you could extrapolate what the total debt would be, don't know that that's a 'norm' though! Probably just a tipping point calculator!!

Personally speaking (and I think it probably is a personal thing seeing as we all have different incomes and circumstances) my acceptable level of debt is now £0, though obviously that wasn't always the case!

Kavanne

I don't know but for some odd reason there are many people out there who don't count their overdraft as debt!!! lol

firepoppy

I would find one month's income owed as debt acceptable to me (not including a mortgage or student loans). I think the norm with me and my friends is £2000 or £3000 (not including student loans. I think no debts are the ideal. I don't think 2the norm" and "acceptable" and "ideal" are interchangeable as they all mean different things to me.

Gemmzie

Personally....
* Mortgage - Not more than 80% of the property value and not more than 50% of your monthly income.
* Student debt - If it's new style and progressed your career and your overdrafts are cleared - fine.
* Credit cards - Fine if you clear them at the end of the month and use a cashback one or for stoozing
* Car finance - If you need a car and it's a sensible repayment and low interest rate, fine. NEVER okay for a new car - they are a complete rip-off!

Don't hate me!

in2deep_2

I would love to have only 20K in debt..!!!!:eek: