Even people who are financially well off can be at risk of slipping into debt, especially in a staggering economy. There are plenty of doctors, lawyers and stock brokers who are currently on debt-management plans, according to David Jones, president of the Association of Independent Consumer Credit Counseling Agencies. Some of the warning signs of excess debt include: relying on home-equity credit lines or credit cards for everyday purchases, making only minimum payments on extended lines of credit and taking cash advances from one source of credit to pay another. To help save you from a downward-spiral into debt, Consumer Reports has put together a handy list of rules for smart borrowing. Here’s one of our favorites…

36%-48%
Ideally, your total monthly debt payments shouldn’t exceed 36 percent of your gross monthly income. But, Jones says, many people go above 48 percent, which should be avoided if possible.

In a perfect world debt payments wouldn’t exceed 0% of our monthly incomes. Since our world is far from perfect, check out the rest of the rules here.

Your debt, 8 benchmarks for borrowing [Consumer Reports]
(Photo: Getty)

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