Manage Your Money

Master the skills that can help you manage money throughout life.

Reasonable Debt Calculator

What is an appropriate amount of your income to apply toward debt?

How much debt is too much debt? Experts agree that your total non-mortgage debt shouldn't be more than 15% of your take-home pay (the amount you receive after deductions, such as taxes — rather than gross pay, which is the amount before deductions). That's because it will be difficult to pay your other bills if more than 15% of your take-home pay is being used to pay off debt. When making decisions about credit, consider your repayment amount, how much other debt you have, and how much income you'll have to pay down the debt. Obviously, having no debt is a great position to be in. However, if you must borrow or buy on credit, this calculator can use the information you enter to help you figure out the approximate 15% you don't want to exceed.

Results will update as you make your entries.

Reasonable Debt Calculator
How much do you earn? $
Is that amount your gross pay or take-home pay?  
Is that amount per year, per hour, or per paycheck?  
Results
Your approximate monthly take-home pay* $
Reasonable debt spending per month
for non-mortgage debt (15%)
$

Pro tip: If you have to purchase something on credit, it's a good idea to pay at least 20% on the item and then borrow only the 80%. This helps reduce the amount of debt and (because you'll pay less interest) the total cost of the item.

*based on a 15% effective tax rate and working 40 hours per week



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