Peak Debt – What Is Your Story?

Have you reached peak debt?  That’s what I consider the highest debt you’ll willingly take on during your lifetime.  Many people may not have hit peak debt yet.  Think of people who have not bought homes but plan to do so.  They will probably hit peak debt later.  But even they can look at their peak debt to date.

Our Peak Debt Story

We hit our peak debt in June 2007.  Predictably, this was when we took on the mortgage to our current home.  I figure that for many, this would when they saw their debt at its highest.  After all, for most people that buy a home, it’s the largest purchase they’ll ever make.  Since so many people do so with a mortgage, debt lines up as well.

For us, our highest debt total was comprised of the following:

  • Mortgage – $224,000 (this was 80% of the cost of our home)
  • Student Loan Debt – $31,969
  • Auto Loan – $8,647
  • Credit Cards – $0

This put our total at $264,616.  That was the highest debt we ever hit.

Where We Stand Today

I won’t go into the individual numbers, but will give some highlights:

  • We have paid off about 45% of our total debt since then
  • The auto loan was paid off within a year.  We have not taken on a new loan since.
  • We aggressively paid down student loan debt before my wife became a stay at home mom.  There is one loan remaining.  However the interest rate and payments are low enough that we’re fine with it.  The loan is set to end in early 2020.
  • Our mortgage started slowly as we originally had a 30-year mortgage.  We transitioned to a 15-year mortgage and did another re-finance.  The first took advantage of the lower rates.  The second freed up some cash flow and continued to low rate advantage.  Ideally, I’d like to have this paid off by 2029.
  • The only new debt we took on was during our re-finances.  In each case we rolled in some of the closing costs.  Other than that our debt has gone down every month.
  • We’ve never carried a credit card balance.

What Does Peak Debt Mean To You?

I’m curious what peak debt means to you.  What is your personal story?  At what age do you think peak debt should be reached?

I’m hoping that people will write their thoughts and experiences in the comments.  I expect different perspectives.  For example, owners of rental properties might continue to hit new peak debt numbers.

Readers, I’m curious as to your thoughts and experiences on peak debt.   If you have a moment, please share in the comments below.

9 thoughts on “Peak Debt – What Is Your Story?”

  1. Honestly peak debt means something different to me. While my home purchase of our first home entailed our most debt in raw numbers, we could have in theory paid for most of it in cash. So it doesn’t really feel like my highest debt point as we could pay it mostly off. It was essentially utilizing leverage to get a better return on our cash. No to me peak debt is when I had more debt then assets. The giant student loan and car payment coming out of college with no job and no assets.

    • Thanks for sharing. I think you have a point that it can be applied differently depending on your situation, but that can really apply to just about anything when it comes to money, if you really think about it.

  2. Our story is very similar to what yours was, numbers wise that is! We currently have a $35k in student loans, $15k in vehicles, and a $130k mortgage right now! It’s close to our peak debt. I’d love to pay of the vehicle, even though they depreciate, but that would be our biggest monthly debt bill other than the mortgage!

    That is so awesome you paid off the vehicle in one year and are now at 45% of your peak debt!

    My wife and I would love it if we could dwindle this debt down so she can be a stay at home mom one day too! I’ll have to dig through your blog now to see how you did it exactly! This is my first visit, but I don’t think it will be my last!

  3. For me, it was a few years ago with around $156,000 in student loans, $18,000 car loan, and around $32,000 in credit cards. Fast forward to today and its under $100,000 in the student loans that remains. It’s a slog working through it though!

  4. Haven’t bought a home, so my numbers are small, but peak debt has probably been somewhere around $40k. I never stay at peaks for too long, though. Hope to push that higher with a mortgage in a few years if I’m honest. 🙂

  5. My first year after graduating I reached debt of about $80,000. I had nearly $55,000 in student loan debt, and just bought a brand new car for about $23,500 and had bought new furniture on store credit. None of these were wise decisions, but somehow I managed to pay off the store credit and the car loan on time without any issues. I thought that this would be my peak debt. I thought that I’d never get to that point again (except for a mortgage, perhaps).
    But guess what?
    I once again find myself nearing that $80,000 in debt. I still have $43,000 in student loan debt, but now have nearly $30,000 in consumer debt on top of that. Ugh!
    The consumer debt was all accumulated while I was laid off and struggling to find full time work for over 2 years. Most of it was necessary to survive, but I still regret that I let it get that far out of hand. I sure am paying for it now (and for the next 20 years!)

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