What is a reasonable amount of debt?  By Elvis Picardo, CFA AAA
It really depends on numerous factors - what stage of life you
are at, your spending and saving habits, the stability of your
job and your career prospects, your financial obligations and so
on. But to keep it simple, let's assume that you are employed in
a stable occupation, have no extravagant habits and are
considering the purchase of property.  A good rule-of-thumb to
calculate a reasonable debt load is the 28/36 Rule. According to
this rule, households should spend no more than 28% of their
gross income on housing expenses (including mortgage payments,
home insurance, property taxes, and condo fees), and a maximum
of 36% on total debt service (i.e. housing expenses + other debt
such as car loans and credit cards).  So if you earn $50,000 per
year and follow the 28/36 Rule, your housing expenses should not
exceed $14,000 annually or about $1,167 per month. Your other
personal debt servicing payments should not exceed $4,000
annually or $333