What does it mean to be in debt

It’s common for people to refer to themselves or others as “in debt.”

“My brother is in debt.”

“More and more people are finding themselves in debt.”

“After my divorce, I found myself in debt.”

But what does being “in debt” mean exactly?

The vast majority of people owe someone something. In fact, I am fairly certain that I have never met an adult who owes zero debt. Auto loans, credit card debt, mortgage debt, medical debt, student loans, and personal loans are some of the most common types of debt that most people find themselves owing.

If it’s true that nearly everyone has debts to repay, then most of us are technically “in debt,” yet only some of us are described that way. The phrase “in debt” seems to be reserved for people who owe too much, but even that is hard to pinpoint. How much is too much?

Many experts believe that you are in, or are headed for, financial trouble when too much of your paycheck (36%) is being allocated toward debt payments. But I think that being in debt is more like being in love—you just know. To borrow a few words from Robert Palmer: “You can’t sleep. You can’t eat. There’s no doubt, you’re in deep.” In other words, my definition of being “in debt” is more about a feeling than a number.

What’s your definition of “in debt”?

Note: This post was included in the Carnival of Pesonal Finance #265 hosted by Funny About Money .

Kim McGrigg is the former Manager of Community and Media Relations for MMI.