Money Mic: I Make 6 Figures, but I’m in Financial Trouble

In our “Money Mic” series, we hand over the podium to someone with a strong opinion on a financial topic. These are their views, not ours, but we welcome your responses.

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Today, Holly Michaelson*, 28, who makes $100,000 a year, shares how she got into $14,000 in credit card debt—and what she’s doing to get her finances back on track.

Money is emotional and sensitive, so please respect that this is just one woman’s story.

A few weeks ago I spent a quiet weekend at home. While I should’ve been relaxing—cooking, reading, enjoying my beautiful apartment after a busy week of traveling for work—I was totally stressed. That’s because there was a huge pile of bills on my dining room table, and I couldn’t shake the sinking feeling that I couldn’t pay them.

Here’s the kicker: I should be able to pay these bills. I’m a pharmacist making $100,000 a year. But over the course of the last year, I’ve racked up nearly $14,000 in credit card debt. I hadn’t told a single soul about this debt until this particular Saturday night. I knew it was time to come clean to someone, so I called my mom, who came straight over.

“Ooooh, that’s not good,” she said, when I confessed exactly how much debt I was in.  But she also wasn’t totally surprised. My mom and I were in a car accident a year and a half ago, so she knew I was facing some serious medical bills. When I told her the debt was due to more than those costs, she gave me some great advice: “Tomorrow morning, go through every single one of your expenses,” she told me. “Then figure out what’s necessary and what’s not. Doing that will help you get a handle on this.”

RELATED: Your Ultimate Budget Guideline: The 50/20/30 Rule

The next day, I sat at my desk and did just that. Netflix? Goner. All those premium cable movie channels? Canceled. Two online dating accounts? Done-zo. (I’m done with online dating on a few different levels, but that’s another story.) Nights out in New York City with my girlfriends? Not for a while.

What I realized very quickly was that I was spending around $300 a month (and sometimes more) on stuff I just didn’t need. I thought I could afford a certain lifestyle given my income. I also felt like I deserved all of these extras. After all, I work my butt off. I should be able to treat myself! But what I saw when I took a detailed look at my expenses was that I was being excessive, and while giving up Netflix was a good start, I was going to need to do more to get out of debt.

  • Kimmie

    Sorry my dear but a $100K salary is NOT a high salary. Please stop saying that, you sound foolish.

    • sionainnigans

      I agree with Jamie. $100K is far above the median salary for women in the United States.

    • Moana

      Kimmie sounds foolish! Half the American population probably don’t see that much in salary.

    • C.A.

      It all depends on perspective. For some of us, $50k sounds like a near-unachievable dream!

    • gohuskies

      How clueless are you? Living 40 mins outside of NYC – it’s not a low salary…

    • margaritakel

      Kimmie dear, you sound foolish. The average wage in the US was $44,321 in 2012. So, a yearly wage that is more than double that amount is a high salary for most people.

    • ksgirl73

      Depends on where you live, here I could live very comfortably with that.

  • KU_Fan

    Kimmie – $100,000 is a high salary compared to what I’m making! Please remember not everyone may be as fortunate as you to be making a salary that makes that number seem paltry.

  • Jamie

    She absolutely does not sound foolish. 100k is a high salary compared to what most women earn. Kudos to her for opening up about how the amount of her salary led her to believe she could afford more. This happens to me all the time, even with a salary that is half that.

    • sionainnigans

      Yes! Likewise! Her story really resonated with me, especially with the justification for the charges.

    • kerphout

      Even leaving her sex out of it, 100k is a high salary. Living in Greenwich has really skewed your perspective, Kimberly.

  • Mr Nuff Said

    Sounds like a great plan to solve the problem. It also helped when she identified her problems early on about Expectations vs Reality. Many people are almost oblivious to the way things could be just because of “I grew up like this, so this is how it SHOULD be.” Great work.

  • SMLnewyork

    This is such a great article. I especially resonated with the part about realizing the connection between how you live now versus how you were raised and the expectations that brings with it. I think many of us, while we’d love to live simpler, don’t realize there are so many social pressures and subconscious tendencies that rule the way we look at, value, and spend money. The other point that hit home was that in the end, most of us just can’t do it alone. We need someone in our corner to hold us accountable, to be an objective sounding board and to keep us honest when we aren’t being honest with ourselves. Great article! Would love to see more of these insights about the connection between psychology and money. And P.S. to the comment below 100,000 is ALOT OF MONEY. Maybe not if you live in a fancy apartment or grew up with parents who made more, but my mother raised me on a teacher’s starting salary and we were happy, had a nice home and spent 3 months in Europe every summer. Not the lap of luxury, but living simple and making happiness and being grateful for what we did have a priority.

  • KellyJ

    There is a saying ” The hardest thing is to know.” Good job in figuring out what your spending triggers are and actively addressing your debt.

  • KSoule

    That is great that you have your mom to help you through this. I’m sure a lot of people do not have that, and it must be extremely helpful to have someone counsel you when you really need it. You sound like you are doing great and thinking very well. Keep up the good work!!

  • Desiree

    Thanks for sharing. I don’t think it makes sense to put money towards your 401k when you have credit card debt though.

    • GG

      I actually disagree. She should be doing both. All financial experts advise that retirement saving should start as early as possible. If she takes years to pay down her credit card debt and ignores retirement saving, that’s years worth of 401k contributions and earnings she will not be able to make up for.

    • BeeBee

      I agree with you Desiree. She’s putting upwards of $1000 towards the debt monthly. Add on the $5000/year she’s putting towards retirement and the debt is gone in less than a year. Then she could resume retirement.

  • Edwin Chung

    It depends the cost of living on where you live. $100k salary in NYC area is different than $100k in Wyoming.

  • Christina

    We all need help and support to achieve our financial goals. If we let our guard down, the money walks right out our door. Gail Voz-Oxlade has a new program called My Money, My Choices. It is a practical tool to help each person achieve his or her personal financial goals, based on whatever financial situation is happening. Her website is mymoneymychoices.com

  • Lisa

    I am ashamed that Americans can lose all their savings and become homeless because of medical debt. I am more ashamed that insurance executives reap the benefits. My European friends are aghast that this can happen and that medical care is not a basic provision for all.

  • Mona Lisset

    Wow, thanks for sharing your story. I wish you the best as you continue to improve both with your health and your financial help. Unfortunately sometimes these are hard lessons to learn, but kudos to you for taking charge of your finances. Stay encouraged and through a party when you are finally financially free!

    • Mona Lisset

      I meant “throw” a party…

  • Jigi

    There’s something wrong with this picture. Cutting netflix is not going to do. I read this article with hope. I have a 100k salary and yet I have 150k student loans 100k back taxes. Cutting Netflix is not going to do it for me.

    • Camika Lopez

      Jigi cutting Netflix may not do much but it’s a start. maybe add taking lunch to work everyday, not going out to eat, consolidating errands to save gas (if you have a car), or using public transportation, bike. And dare I say it taking a side job? Not sure if you’re familiar with Dave Ramsey … But I live by his principles and been debt free since July 2013. Good Luck!

    • Anonymous Citizen

      I agree cutting Netflix is not going to do it, but cutting 20 bills like Netlfix may. BTW: how does one accrue 100K in back taxes? Are you not having enough withheld from your paycheck?

  • dr.bosslady

    I loved this article as I am in the same situation. I make about $110k a year, and now have $12k in cc debt. For me, I know I can pay this off in 6 mos. Much of it came as a result of a dental surgery, tax bill, and poorly budgeted wedding costs. Knowing I can pay for it doesn’t make me feel any better about. Luckily, I still have a bit of savings.

  • rubymer

    How did she ever afford a 1,500 apartment on a 40,000 salary? I was making about that and my rent was 700 and I was still struggling!

  • Joe Goff

    I hate hearing these kinds of stories and the people writing them thinking they are in such dire straights because they have a little debt…try making 12000 a year with a 34k mortgage an 15k in credit card debt then tell me how you got out of it in 4 or 5 years..id like to know, because that’s MY story and i’ve been paying on my debt for almost 9 years now and am lucky to have paid half the credit card debt off alone(also got foreclosed on)

  • Beribboned

    Doesn’t matter where you live…100K is very good even in NY!

  • idaho

    Many people with a net worth off over million NEVER made $100,000 in a year, or only occasionally do. Most however never did get upside down in debt and stared saving, investing, and compounding at young age. They also live in modest homes, drive their cars for years, take care of what they have etc.

  • Relativity

    You can’t get a real idea of salary without including benefits. As an example, a teacher making 50K who gets free college tuition for his kids, a health insurance and retirement plan with major employer contributions pre- tax and more could actually be doing better than someone making 100K but has to cover health insurance , college tuition, and retirement savings with no employer contributions or discounts. Benefits change the salary equation. How do you determine actual expenses and savings without including benefits as a component of salary?