How much total debt should I have?

To be safe financially, the monthly payments on all your debt should be less than 36% of your monthly gross income.

What steps can I take to increase my available funds so that I may invest?

The most important step to increasing your funds available for investing is to understand your true financial picture by taking into account your income from all sources, your complete debt picture (including all loans, credit cards, and other obligations), under-

When is taking on debt a good idea?

Increasing your debt may be beneficial if the loaned capital is put to good use, as in purchasing real property (that may be valuable or increase in value over time), by obtaining an educational loan that may increase your earning power in the future, and by using a home equity loan to improve your home to increase its resale value at some future time. Additionally, if you take on low-interest debt for such valuable activities, you free up your cash reserves to do other things such as investing. In the case of mortgage loans, the interest you pay on that loan is deductible against your reported income when you file your tax return each year.

standing your daily or monthly expenses, paying special attention to areas where you can eliminate or reduce these expenses, and directing this money to investments that earn a return.

What are the next steps to increase my available funds so that I may invest?

You should pay off all higher-interest rate debts first, since those debts use so much of your income. You should stop using credit cards in favor of cash, and be sure to pay off the balance of what you used on a credit card in full each month, so that you do not take on any more debt. And never pay only the minimum amount that credit cards request, as this will keep you in the debt cycle for a very long time.

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