What Percentage of Your Income Goes Toward Your Debt Snowball?
Our current debt snowball (the monthly payment we’re sending to our smallest debt) is $1,439.08. Once we’ve paid off our credit card, student loans and the second mortgage, we’ll be sending a monthly payment of $3,000.29 to the first mortgage.
Our monthly take-home income (after taxes, 401k contributions, insurance and FSA) is $5,422.22, assuming it’s a two pay-period month. So, our debt snowball is currently 27% of our monthly take-home income (or, 19% of our monthly gross income).
Now, this does not include payments toward other debts. If you include all our debts, 55% of our monthly take-home income goes toward debt payments (well, I guess some of it goes toward escrow). Plus, 100% of our bonus income (approx. $10,000 in 2007) goes toward our debt.
Wow, my brain hurts now.
If you’re paying off debt, what percentage of your monthly take-home income is going toward your debt snowball?
