What to Do if You Have More Debt Than You Make in a Year – EP 295

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Debt is already overwhelming as it is but more so when it’s higher than what you make in a year. In this episode, we’re walking you through some practical steps to take, things to consider, and some truths about debt and income that will combat the lies your head might be telling you, so you can take to get on track toward becoming debt-free.

There is no good or bad debt. Debt is not the enemy— it is a part of life. If we realize that, we don’t have to live in the extremes.


  • Renovations. Want to renovate something? First, take a deep breath then open a sinking fund at a high-yield savings account like the one at CIT (currently offering 4.05% APY) on frugalfriendspodcast.com/CIT.

How to Stop Obsessing Over Your Debt, According to Experts

We love the normalization this CNBC article insinuates on having debt. Many people think about their finances– we all experience and go through them. 

What Jen + Jill have to say:

In a 2019 research that surveyed 1,007 people, about 28% said they think about the money they owe daily, 20% think about it ‘almost every day,’ and another 20% do ‘several times per week.’ You can see how much mental space finances take on most people. Jill reminds you that when we feel shameful or guilty about debt, it can cause more overwhelm and strain on our mental and emotional health than necessary. We can’t be completely self-sufficient in any aspect of life; we still need help and support. While trying to pay off your debt, don’t forget to look at your progress. 

While it is important to look at how much debt you have, it is just as important to know how much you need. Jen spent a lot of time feeling shame and guilt because she had always thought that debt was the enemy, but it wasn’t, and it should never be. We often forget the reason behind our debt, which can make us feel bad about it. 

5 Tips to Lower Your Debt-to-Income Ratio

If you have applied for a loan, mortgage, or any debt, this will be handy. Fool lists down practical tips if financially you have a higher debt-to-income ratio. 

What Jen + Jill have to say:

It’s crucial to figure out first how to calculate the debt-to-income ratio. Jen estimates that the ideal debt-to-income is about 36%, considered the “acceptable ratio.” Try lowering your interest on the debt. Jill is surprised that you can call your lender and ask for a reduction in your interest rate. 

One tip Jen & Jill finds amusing is putting cards on ice (not literally)! Lock your card, but it should not impede any recurring payments. Seek to implement a 24-hr rule when deciding to make a purchase. If you really want to save more money, try taking on a side hustle you can enjoy, but if you’re still unsure about what side hustle to take on, make sure to check out The Side Hustle Series by The Frugal Friends, you might discover what you’re looking for!

How we overcame the overwhelm of having more debt than we earn

Jill took 7 years to pay off her debt while not earning much in a year. Taking hold of her thoughts took a lot of intentionality and not letting them run wild. She had to mentally compartmentalize various things that stressed her and made her anxious about her finances.

Meanwhile, Jen overcame the overwhelm together with her husband, Travis. Teamwork makes the dream work as their partnership and support during their debt pay-off journey got them through it all. 


Bill of The Week

Thank you Amanda for sharing your bill about lowering your electric bill!

Thanks so Much for Listening!

Thanks so much for listening! Many of you know we have a private community where we do monthly money challenges and offer accountability groups. We want to congratulate one of our members for a big win:

So glad for Frugal Friends

I am on a LOT of medical payment plans. Seems like it never ends. I paid one of them off last month by submitting the final two payments, and marked off on this month's budget that it was already paid. Thanks to the podcast I've been tracking my expenses, and I'm so glad--today I noticed that I was charged again because the payment plan hadn't actually stopped autodrafting!

In the past I probably would have just seen the charge and figured I owed it. 😁

Congrats! Thanks for listening and if you want to check out our monthly challenge community head to frugalfriendspodcast.com/club to see what challenge we have coming up next.

Keep leaving us reviews on iTunes or Stitcher, and sending the screenshot to reviews@frugalfriendspodcast.com. And don’t forget to share your favorite quote from the episode by using the hashtag #FrugalFriendsNote. 😉

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