[USER]

What would be the maximum amount of mortgage plus car loan that you are willing to have as a 6 figures income household specifically?

Would be comfortable having a high 6 figure debt in total and paying it off at the normal rate if you have a positive 7 figure net worth?

* We are paying it off at the normal rate since the interest rates are low (2.49% for car. 2.99% and 3% for houses). Total income is more than $240K.

* I don’t see a reason to throw every dollar at our low interest rate debt and not having cash in the bank, no retirement contributions, no investments, no money for the kids’ college, etc.

just because we must compromise on all those and put ourselves and our kids in a poverty situation basically in our high cost of living area in our expensive state in order to get rid of that debt for “a peace of mind”.

[Bryan]

Why not half and half? Whatever’s left at the end of the month split between savings and paying down the house.

I can tell you that the 7 figure net worth hits different once the house is YOURS, not the banks though

[Ande]

We enjoy making roughly 200k in income, and having no debt at all including our vehicles and house. We’re able to max both 401ks, both IRA’s, kids’ college, and cash flow most anything we want without having any debt.

I’d pay it all off if I were you and see how you like keeping all of your income when you get paid instead of giving it away in bills. If you hate being debt free then get back into debt.

It’s pretty easy as you know. Life would look a lot different for you and your family with your income if you had no debt.

Less stress, more stability, more freedom. Teach your kids to live without debt from the beginning and change your family tree!

Most people go into debt when they turn 18 and forget how life is without it after a while.

[Russell]

I’d worry more about cash flow than debt to income ratio.
Housing should never exceed 30% of your net income.

Mortgaged investment properties should be cash flow positive, but will massively increase your debt to income ratio.

Cars shouldn’t be financed if at all possible, with the potential exception of work vehicles.

[Scott]

I would say no more than 30% of your take home for your house. The amount depends on the rate. And I would only pay cash for used, on vehicles.

Borrowing money for something that goes up in value is fine as long as it’s a decent rate.

No rate justifies borrowing for something that depreciates imo. With your house I wouldn’t hurry to pay it off.

I would for the car loan.

[Allison]

Way too many variables to run this as a poll. Everyone’s age, cost of living area, plus household expenses play in here. Between my w2 and my business, I gross about 150k+ a year.

Low cost of living area. $750/mo house. $750/mo truck at 3% and truck is for the business.

It’ll be paid off in 6 months. I don’t like debt. I did stupid. I want to buy a second property/cabin but I’m terrified of more debt.

But that’s my own head space.

I see the rest of yall here with less income and 4 mortgages.

[Anca]

Part of being retired early and financially independent is also being debt free with no payments.

My husband and I can easily raise our kids on 20,500/year with no vacations, or kids’ sports, or an expensive lifestyle.

That means we can invest a lot of $$ because it’s not tied up in debt repayment

[Jule]

I’d prioritize saving 15% in retirement accounts, and save at least 6 months worth of expenses in cash.

As far as the debt, although the rates are low, it really depends on how much debt you have.

If the debt is high, more than 25% of your income, then you do need to pay it down after saving for retirement.

Only after that’s all done, then I’d save for the kids’ education.

They can work and get scholarships, you can’t get scholarships for retirement or bankruptcy in the event of a job loss, medical devastation, etc.

[Author]

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