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Even people making six figures can find themselves drowning in debt, with the medical profession an unlikely but high-risk segment for sky-high debts. According to research from the Education Data Initiative, 74% of practicing physicians had to borrow to attend medical school, and 32% of these employed doctors still owe more than $250,000 on their student loans (1).
And it’s not just doctors who are drowning in debt: One nurse from California knows exactly what it’s like to juggle student loans and mortgages to the point that she was living paycheck to paycheck.
Naseema McElroy, 44, recently told CNBC that in 2015, she was making more than $200,000 as a labor and delivery nurse (2). She owned a luxury car and had just bought a house in the San Francisco Bay Area.
But in spite of these outward markers of success, McElroy also had a large amount of debt. She owed $580,000 on her mortgage, $185,000 in student loans and $70,000 for a condo she’d bought previously. She also owed $22,000 for a loan she’d taken on a 403(b) retirement account to purchase her new house.
McElroy said she realized that she was making “way too much money to be in this precarious financial situation (2).”
Here’s why even high earners can find themselves drowning in debt, and what you can do to dig yourself out from under your bills — and why it’s so critical for financial health.
From 2015 to 2017, McElroy took control of her finances by budgeting, making extra payments on her debt and selling her home.
All told, she eliminated almost $1 million in debt in under three years. In addition to her mortgage, student and retirement account loans and condo loan, McElroy also managed to pay off $51,000 in car payments, $29,000 in IRS debt and a $15,000 divorce settlement.
She says that her mission to become debt free made her view money intentionally. Now, she is an aggressive saver, keeps a tight budget, and she works three jobs.
Read More: I’m almost 50 years old and don’t have retirement savings. Is it too late?
By mid-2025, Americans carried an average debt of $104,755, according to credit bureau Experian (2). When broken down by type of debt, the average American debt balance on auto loans was $24,596, $6,735 on credit cards and $258,214 on mortgages.
Some people may struggle to pay down debt and manage their other household expenses, like McElroy did before she got strict about budgeting and debt repayment.
McElroy used the debt snowball method to pay down her debt, which involves isolating your smallest debt, and paying it down aggressively while making minimum payments on all your other debts. Once the first debt is paid, you roll the money over into the next largest debt until all debts are cleared. This method is popular because the sense of accomplishment can help spur you on, and a favourite pick of financial guru Dave Ramsey.
However, those with high-interest debt might want to use the avalanche method, which involves paying off the debt with the highest interest first, which can save you more money in the long run.
If you owe a substantial amount, you may also want to see if you qualify for a debt relief program to help clear a significant portion of your debt.
With Freedom Debt Relief, you can speak with a certified debt relief consultant for free, who can show you how much you can save by partnering with them.
If you’re eligible, they can negotiate settlements with your creditors until all of your enrolled debt is resolved.
Many financial experts also recommend that before you start a debt repayment plan, you save up a small emergency fund (3). Without any emergency savings, your debt repayment can easily be thrown off track if an unexpected expense comes up, like a car repair. By saving an emergency fund, you can stay on track with your debt repayment, without taking on even more debt when a surprise expense pops up.
When you have lots of debt, however, it can feel impossible to find room in your budget to direct towards savings. Stop living paycheck-to-paycheck by tracking your spending and setting a budget you can live with.
An app like Rocket Money can easily help you find breathing room in your monthly budget by flagging recurring subscriptions, upcoming bills and unusual charges, pulling in transactions from all your linked accounts.
This can help you cut unnecessary costs, and then you can manually redirect savings straight into your retirement fund. No spreadsheets, no guesswork, no stress. Small habits like this can make a big difference over time.
Rocket Money’s intuitive app offers a variety of free and premium tools. Free features include subscription tracking, bill reminders and budgeting basics, while premium features — like automated savings, net worth tracking, customizable dashboards and more — make it easier to stay on top of your retirement contributions and overall financial goals.
If you are able to take on more work to increase your income, you can also take a bigger bite out of your debt. Putting tax returns or bonuses toward debt is another way to get it paid down faster.
Even if you have a high income, like McElroy, if you have lingering or growing debt, you might struggle to save for the future, or pay for sudden expenses. Paying off nearly $1 million in debt in under three years might not be possible for everyone, but taking control of your finances by building a budget and making a debt repayment plan can give you a feeling of freedom and control that taking out another credit card never will.
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Education Data Initiative (1); CNBC (2); Experian (3); Ramsey Solutions (4)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
