Financial wellness goes beyond having some cash in the bank. It's about effectively managing your finances and making decisions that align with your life goals.

One key factor in maintaining financial wellness is your debt-to-income ratio (DTI). This nifty little number represents the percentage of your monthly gross income that goes toward paying off your debts.

Lowering your DTI can not only improve your financial standing but also contribute to a healthy credit score. So, let's dive right into the details of the debt-to-income ratio.

What is the debt-to-income ratio?

The debt-to-income ratio is a measure that lenders use to evaluate your ability to handle monthly payments and repay borrowed money. It's calculated by dividing your total monthly debt payments by your total gross monthly income, then multiplying the result by 100 to get a percentage.

For example, if your monthly debt payments add up to $1,000 and your gross monthly income is $4,000, your DTI would be 25%.

A high DTI suggests that a significant portion of your income goes toward debt payments, leaving less room for other expenses, savings, and discretionary spending. It can also make it trickier to qualify for new credit and may impact your credit score.

How can you lower your debt-to-income ratio?

Achieving a lower DTI takes time and effort, but with the right strategies, you can make progress. Let's check out some tactics:

Budgeting and cutting back

Start by creating a budget. List your monthly income sources and expenses to get a clear picture of where your money is going. Look for areas where you can trim expenses — maybe cut back on online shopping, dine out less, or reevaluate your subscriptions. While these changes might not erase your student loan debt or give us a new real estate market, every small saving adds up!

Increasing your income

Consider taking on a side job or monetizing a hobby to supplement your primary income. And don't forget about Vital's referral rewards program! By referring more people to Vital, you can earn a greater share of referral rewards each month. It's a way to turn your influence into extra income. So why not leverage your network and boost your earnings?

Paying down debt

Focus on paying off your existing debts. You can try the "snowball method," where you tackle smaller debts first to gain a sense of accomplishment. Or opt for the "avalanche method," which prioritizes debts with the highest interest rates to minimize the total interest you pay.

Debt consolidation is another option, where you combine your debts into one with a lower interest rate for easier management.

Avoiding new debts

While it may be tempting to open new credit accounts, resist the urge. Taking on more debt can increase your DTI. Prioritize living within your means and use your existing credit responsibly. Remember, responsible spending is key to maintaining a healthy DTI.

How long does it take to lower my debt?

It's important to remember that paying down debt is a process that requires patience and perseverance. Just as it took time to accumulate the debt, it takes time to pay it off.

Understand the time factor

Debt reduction doesn't happen overnight, and expecting quick results can lead to frustration. Different types of debt — like credit card debt, student loans, and mortgages — come with their own repayment timelines. The key is to focus on maintaining consistent progress rather than seeking immediate results.

Plan strategically

Create a realistic and strategic repayment plan to stay on track. You can prioritize your debts, whether it's starting with the highest-interest debt (avalanche method) or tackling the smallest debt for a quick win (snowball method). Choose the approach that motivates you more — saving money in the long run or achieving quick wins.

Consistency is key

Consistency is the secret to successful debt repayment. Regular, timely payments, even if they're small, can make a big difference over time. By staying consistent, you can reduce your debt and demonstrate responsible financial behavior, which could improve your credit score.

Celebrate progress

Don't forget to celebrate your milestones along the way! Reaching a debt payoff goal is a significant achievement, and acknowledging it can provide a much-needed morale boost. Remember, even small victories bring you one step closer to financial freedom.

Paying down debt is a journey, not a race. With the right plan and consistent efforts, you can make this journey rewarding and enriching. So, gear up, take it one step at a time, and enjoy the ride!

Introducing Vital Card

As you embark on your financial wellness journey, Vital has got your back. Vital Card offers a unique approach to rewarding responsible spending, making it easier to manage your finances and enjoy the journey.

With each purchase using your Vital Card, you earn cash back rewards. The more responsible you are with your spending, the higher your credit health rewards. Plus, your good spending habits may even show up positively in your credit score over time.

Vital also encourages you to grow your network and increase your income through the referral rewards program. By signing up more people for Vital, you can supplement your income and — if you sign up five or 10 people within a three-month period — can even qualify for higher cash back for the following three months.

While any credit card will impact your DTI, it's still crucial to consider your financial needs and health holistically. Managing your debt, increasing your income, and budgeting all play significant roles.

What to do if your DTI is still high

Despite your best efforts, there may be situations where your debt-to-income ratio remains high. Don't worry — you're not alone. There are professional services and strategies available to help you navigate this challenge.

Credit counseling

Professional credit counselors can offer expert advice and tailored guidance based on your financial situation. They can help you create a budget, provide insights into reducing your debts, and offer strategies to avoid falling back into debt.

Debt management plan

A debt management plan (DMP) is an agreement between you and your creditors, managed by a credit counseling agency. Under a DMP, you make one monthly payment to the agency, and they distribute the money to your creditors. This simplifies your payments and can potentially reduce interest rates, making your repayment plan more manageable.

Debt settlement

In more extreme cases, you or a company you hire can negotiate with your creditors to accept a lump sum payment that's less than the total amount you owe. Debt settlement can lead to significant reductions in your overall debt, but it may have adverse effects on your credit score.


As a last resort, bankruptcy may be an option. However, declaring bankruptcy has severe long-term consequences for your credit score and can remain on your credit report for up to ten years. It's generally not recommended except in the most drastic circumstances.

Responsible sharing and spending with Vital Card

Being proactive about your financial health is essential, and maintaining a lower debt-to-income ratio is a significant part of the process. While circumstances may occasionally increase your ratio, it's always possible to bring it back under control with the right strategies and dedication.

Choosing Vital Card can reward you for responsible sharing and spending. Enjoy the benefits of cashback rewards, work on your credit score, and earn referral rewards by expanding your network. With Vital, you can track your credit health and turn the journey toward financial wellness into an enriching experience.

Remember, the road to financial health is a journey, not a destination. Keep going, stay positive, and embrace the empowering path of financial wellness with Vital.

Now, get ready for your journey — one step at a time.


Bankruptcy | United States Courts

A Debt Management Plan: Is It Right for You? | Experian

How to Manage Credit Card Debt – Debt Relief Options | Equifax

What Is Debt-to-Income Ratio? | TransUnion

Debt Snowball Strategy: How Does It Work? | Experian

Vital Card blog posts are intended for informational purposes only and should not be considered financial or any other type of advice.