You Don’t Have to be Rich to Get Out of Debt: What It Really Takes

By Jackie Beck   Updated 02/14/2022 at 3:35 pm

One of the biggest myths out there is that you need to make a lot of money in order to get out of debt. But that’s not true at all.

You don’t have to make a lot of money to get out of debt. And you definitely don’t have to be rich.

Common feelings

When you hear debt-free stories from people who make more than you do, you might think things like this (and I know I used to):

  • Well of course I could pay off debt if I made that kind of money. Duh. I’d like to see a realistic situation described for once.

  • I can’t even imagine what it would be like to bring home that much money each month. They make more in four months than I make in a year! How hard could it be to get out of debt when you make that kind of money?

  • I’ve never even had the things they “cut back on” in the first place. What am I supposed to cut?

  • Great. So there’s basically no way I can get these debts paid off since I only make $______.

The thing is, it’s not about how much you make. It’s about how much you spend and borrow.

Dispelling the high income myth

If you make $100K a year and owe $450K in debt, are you any better off debt-reduction wise than someone who makes $32K a year and has $140K in debt?

Proportionally speaking, no.

Yes, you’ll have a bigger shovel. But you’ll also have a bigger hole.

Now true, someone who makes $100K a year is going to find it a lot easier to pay off $5K than someone who makes $32K would, but it would be highly unusual for someone with a debt-minded mentality to owe so little compared to their income. It’d be much more typical for their debt to be proportionally larger too.

And yes, they’ll probably have more places that they could cut back than you do if you’re making less.

(Maybe you’re not sending your kids to sleep away camp, horseback lessons, tennis, piano, and tutoring. Maybe you’re not taking annual family vacations to 5-star resorts. And so maybe there’s no way you could cut those things out.)

But unless you are living below the poverty line, you probably DO have things you could cut. (And if you ARE living below the poverty line, your best shot at getting out of debt is finding a way to bring in even a little bit of additional income.)

How to get out of debt, no matter what your current income is

It’s not about how much you make right now, or about how much someone else makes. If you want to get out of debt, what matters is what you do with whatever amount you are making.

In other words, it’s all about the choices you decide to make, and about taking a step back and looking at your situation objectively.

Probably you need to stop borrowing money, track your spending, budget, make a plan, and then stick to it until you’re debt free. And you can do that at any income level.

You don't have to be rich to get out of debt

5 thoughts on “You Don’t Have to be Rich to Get Out of Debt: What It Really Takes

  1. Love this, Jackie! This poo-poos most all of the excuses people use for why they can’t get out of debt. We started our debt freedom journey at a 65% debt-to-income ratio. I’m not going to say it’s not slow-going, but we ARE getting out of debt. :-)

  2. I also used to think if a person made a lot more then of course they would be able to pay off their debt sooner. But I see now the more you make the more debt you are open to fall into the that trap! Thanks for this awareness!

  3. I like this. I think too often we do look for excuses or reasons other people have extraordinary circumstances. After all, most people these days carry debt loads and it’s normalized. It’s odd to pay off debt, so people automatically assume you must make a lot of money or have inheritance.

    We do make triple our city’s average household income, but we’re still middle class. We’ve been able to pay off our $14k credit card debt, buy a house, do a $16k renovation in cash, and pay off over $25k in student loans. We had to ditch a lot of excuses to make it happen.

Leave a Reply

Your email address will not be published. Required fields are marked *