Would you rather have a higher income but lots of debt or lower income but no debt at all? (sell, value)

[jghorton]

Perhaps there is a correlation between $60-$70K per year and more student loan debt - and $35-$40K with less student loan debt (?)

$20-$40K more income (from now on) - can eliminate a lot of student loan debt.

Of course, many have huge student loans ... in career fields that will never pay enough to justify them.,

BTW, great job on paying off your loans so quickly. Sometimes more frugal spending habits can give one more spendable income and less debt.

[HomeIsWhere...]

Lower income but no debt at all?

Yeah, this works for me.

I have credit cards that I use judiciously and pay the balance(s) due completely when my statement(s) come in. I am very comfortable with this arrangement. I am a one income household and realize that the unthinkable can happen to the best of us, therefore I just don't go there.

[lottamoxie]

credit card debt bad.
auto finance debt bad.
student loan debt, bad but it's often the reality
mortgage debt, fine as long as you can afford it and don't pay any PMI

If you're living within your means, even if the means are a bit less than you'd like, you'll still sleep well at night.

[veg-gal]

I'd rather be in the middle income-wise, and have absolutely no debt.

Your "higher or lower income" scenarios are a little difficult to quantify. Higher income meaning a couple millions of dollars, with debt in the tens of thousands? Then I'd be OK with that and I'd pay off all my debt immediately with my income, vs. living a minimum wage with no debt.

[Submariner]

Signing a huge mortgage allowed me to get a home for my family, and a bunch of rentals. That rental income allowed me to make mortgage payments.

Without the debt I would not have had that income.

Any extra cash I had I paid as principal-only payments to buy down the mortgage. That was how I gained equity, that years later I was able to re-use to buy my farm with no mortgage.

[selhars]

Everything is relative, of course.

In certain circumstances 60-70K is NOT that much money -- at all. Period.

[eddiehaskell]

I like my low income/no debt approach which I laid out in the huge “retire in your 20s living on $20k/year” thread. It’s a pretty simple lifestyle and you don’t have to worry about getting anything paid. I really hate making payments on stuff I that after a few years I don’t enjoy or use as much.

[jacqueg]

Low income, no debt.

I once worked at a bank, and as part of my job, I could see personal loan applications. It absolutely stunned me to find out that quite a few movers and shakers in my town had a smaller net worth than I did. They were driving Acuras and wearing the latest fashions. I rode the bus and shopped at thrift stores. I liked my life better.

[eliza61nyc]

I'd much prefer the higher income. my theory is this, what is the worst that can happen to me if I default say on my credit cards??? I get bad credit? no biggie to me. but imo the more cash you have and can save the better.

IMO low income even with no debt is very limiting. you're limited on where and how you live, things like that.

If I'm making 100K and they repo my car I still have options. lol buy a cheaper car. If I'm making 25K my options are lower.

That's just how I think. I don't lose sleep over debt, I most certainly lose sleep over no money.

[Gabriella Geramia]

I'd rather have a higher income. Because when I'm done paying my debt, I'll be left with a higher income. But if I have no debt and a lower income, the same time period can pass and I'll still be left with lower income. I think higher income and lots of debt would work out better in the long run.

I think a lot of people see student debt differently and don't mind taking their time to pay it off. The average return if you invest is around 7%. Depending on what the interest on your student loans are, some people think it makes more sense to invest the money and pay off minimum debt. I personally would rather pay off all my debt so I can invest more money and watch it compound but I know people who only have a few thousand dollars in debt and don't mind taking a few years to pay it off even though they could easily pay it off in a few months.