What is your debt/net income ratio

[tripods68]

That include mortgage, 2nd, student loans, car note, and credit cards. I'm curious who has the lowest "ZERO" debt ratio. I've only started tracking our this year. Ours is 36%. There's definitely room for improvement.

[jIM_Ohio]

1:1

I have debt, I have income.

[tripods68]

Sorry being unclear. Debt/Income ratio (percentage) is what the lender use to determine your ability to pay debt in relations to your income. 1:1 doesn't give us anything. Add your total debt payment divided by Net Income. For example, our is $2713/$7533 = 36%


BTW: Lender uses gross income but here we are using Net Income instead.

[JinCO]

We are at about 36% as well.

[jIM_Ohio]

I knew what you meant, that was my attempt at sarcastic humor (it is Friday).

around 25% of gross
around 31% of net

[ScrimpAndSave]

I'm not sure what my net worth is...I think it is around $30,000 with my old 401k, my pension, an old annuity (403b) and my savings. I owe $1,500 in cc debt which will be paid off next month. Not sure what all of that means, though! Haha!

[noppenbd]

31% of net
20% of gross

These numbers can be easily manipulated. Reduce your net number by stopping 401k contributions. Or reduce your net by transferring an amortized payment (car loan) to an interest only payment (HELOC or credit card). So they don't tell you that much.

[MonkeyMama]

& the lowest would be $0 (we got a few?)

For us, 25% net. (20% gross). Just the mortgage.

(Good point, nothing is withheld from my paycheck but social security and maybe 5% to income taxes - very low tax bracket. But since I am offered no benefits my gross is higher than it may be elsewhere. Also my spouse does not work right now, but if he did that percentage would drop like a rock. Very easily manipulated, indeed).

[JinCO]

Originally Posted by noppenbd

31% of net
20% of gross

These numbers can be easily manipulated. Reduce your net number by stopping 401k contributions. Or reduce your net by transferring an amortized payment (car loan) to an interest only payment (HELOC or credit card). So they don't tell you that much.

I agree noppenbd. I just did the math on a scenario where we didn't invest in 401Ks, and reduced the amount of debt we were paying to the minimums required and came up with 23% of net instead of 36%.

[kork13]

hahahaha ummm.... well, for me right now, it's 73% net, 76% gross. But then, I have a rather peculiar situation in which that really isn't a problem for me at all....

[red92s]

Debt = $0
Net Income = More than $0

So I guess my answer is . . . zero

[Merch]

16% gross
24% net

I max my 401 k and have health and transit deductions.

[Snave]

Originally Posted by noppenbd

31% of net
20% of gross

These numbers can be easily manipulated. Reduce your net number by stopping 401k contributions. Or reduce your net by transferring an amortized payment (car loan) to an interest only payment (HELOC or credit card). So they don't tell you that much.

Agree on this point. I max my 401K and also had 5K taken out for our Health Savings Account (having a baby so we jacked it up + increased our deductible), so that is over 20K right off the top. Even with these, we are around 22% (net). Just our home loan.

[FoolFromAZ]

30% of net if I include my wife's income. 50% of net if just mine.

25% of gross if I include my wife's income. 40% of gross if just mine.

so I depend heavily on my wife's income. We have one kid. planning to have another one in 2 yrs or so. after that my wife may stop working.

[DebbieL]

Currently I'm at 0 debt. If I do decide at some point in the future to buy a house (if prices come back down to reality here) I would like to keep it to about the 36% level.

PS - Here in Canada it doesn't make much difference tax-wise if your spouse works or doesn't. We don't get much of a break for supporting a spouse (maybe $1,000 or $1,500 per year at most), so having an out of work spouse start working is a much greater benefit here. You don't lose much of anything.

[Ima saver]

The only debt I have is my husband's newest car and I could pay that off at any moment. The payments are probably under 10% of our monthly net income.

[skydivingchic]

21% of net
11% of gross

Only debt is the mortgage.

[LivingAlmostLarge]

22% of gross
56% of net, I think we have a lot in deductions, 401k, ESPP, and auto savings. We bring home less than 50% of our income because of taxes and savings.

[disneysteve]

13% of my net, not counting my wife's income.
8.7% of my gross.

[meatloafkend]

About 29%