UK financial coach

How Much Debt is Too Much Debt?

Simply put, if you cannot manage your debt then it is worsening and you don’t have a plan to pay it off then it’s a problem.

If you are wondering if you have too much debt, then reviewing your debt-to-income ratio can help answer your question. If that sounds too technical then you really need to read this:

What you do is to add up your monthly debt obligations (things like car loans, rent / mortgage – i.e. housing payments and credit card bills) and divide it by your monthly gross income.

Debt loads in excess of 36% of your DTI can be difficult to pay off and can make accessing credit more challenging.

This is a genius way of quickly and simply working out whether your debt is manageable.

If you can’t keep up with payments, or you’re facing stress or sleepless nights, then it’s likely time to make a plan to pay off your debt.

Did you know…..?

The average total debt per household in September 2021, including mortgages, was £62,670. Per adult this was £32,931, around 109.3% of average earnings. Source: The Money Charity 

Also in an article last year the Guardian reported an alarming headline last year Covid has exacerbated soaring problem debt levels in the UK

But you can’t blame the pandemic as even before the pandemic, the Money Advice Service estimated that 8.3 million people in the UK were over-indebted, and that 22% of UK adults had less than £100 in savings – making them highly vulnerable to a financial shock such as job loss or large unexpected bills

Don’t get me wrong we all have debt, the majority of young people who attend university start their adult life with debt and they are used to it. I have uni aged children and I have noticed that they seem almost numb and resigned to having massive debt. Maybe some of the issues start there? 

What about debt when you want to get a mortgage? 

A rule that lenders and others widely used is that your total monthly debt obligation should not exceed 36% of your gross monthly income.


There are some easy to spot signs, think of them as common warning signs of problem debt. Here’s just a few…

  • Your debt balance is not going down despite regular payments.
  • You’re living paycheck to paycheck, with no money at the end of the month.
  • You’re not contributing to an employer-sponsored retirement plan because you need the money.
  • You’re unable to build an emergency fund of at least £500 to buffer against financial shocks.
  • You’re using credit cards for cash advances.

Don’t despair – there are lots of ways you can help yourself and you can get help.

Here’s a thing – you managed to get yourself into this financial state, and together, we can manage you out of it.

If you need straight talking, accountability and real talk please get in touch.

Please get in touch by calling me on 07969 859749 or email and let’s see how I can help you

Rachel x

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