The Highs and Lows of Debt Elimination

This past week, I published a post updating our readership on our latest financial milestone.  It was titled Our Loan Repayment Progress in 2024.  It highlighted that we had just completed paying off my wife’s medical education debt.  We wiped out roughly $324,000 of debt within five years of her completion of fellowship in 2019.  It was arguably our most significant financial achievement to date. 

However, the purpose of that post was largely a celebration and reflection on the sheer numbers alone and how it has affected our finances and net worth. It was an enjoyable post to write, but with another week behind me, I feel there is a whole other aspect of debt elimination to reflect upon. This post is largely a more personal and emotional one, but that reflects on our relationship with finances nonetheless. This week, I wanted to share my honest reflections on the highs and lows of debt elimination.  Strap in!

The Numbers of It All

Before we descend too deep into the psychological and emotional side of paying down debt, I wanted to discuss the ‘numbers’ of our recent loan repayment progress.  I think it helps represent what many physicians in the profession are experiencing. 

My spouse and I graduated medical school with six-figure educational debts.  She graduated in 2014, and I graduated in 2016.  I completed my formal internal medicine residency in 2019 and subsequent fellowship in 2022.  My wife went on to complete an emergency medicine residency in 2017 and finally completed a two-year fellowship in 2019.  Effectively, she transitioned into an attending income in the latter half of 2019, just as I was starting a three-year fellowship.  I subsequently transitioned into my attending income during the second half of 2022. 

Like many other trainees, during our time overlapping in residency and fellowship, our incomes were low, and our clinical burdens were high.  Though we prioritized debt elimination, we could not significantly combat our interest accumulation until she completed training in 2019.  Subsequently, during my time in fellowship (2019-2022), I utilized moonlighting to help pay down our debt, and we lived substantially below our means to shunt money towards debt elimination.  Contractually, we also receive ‘at-risk’ pay quarterly, and (barring emergencies) all of that income was put towards our debt too.  We set our sights on eliminating her debt within five years of (her) training completion, and largely did that.

In practice, we were contributing $100,000 to our combined debt annually, which is approximately $8,333 a month. During my fellowship, the overwhelming majority of that was going towards her debt, but as I exited training and graduated from my ‘grace period,’ my monthly payments increased to nearly $5000 a month, and thus, only about $3,333 was going towards my wife’s debt. 

Needless to say, we were paying a lot towards our debts. Even more, if you factor in an interest rate of 3%, we paid well more than $324,000. Though we are incredibly fortunate to have a dual physician income household, it was no easy feat. Through all of this, we still had to raise children, pay a mortgage, pay childcare, replace a totaled car, and face the unexpected expenses of life. 

The Lows

Daily Life Paying Off Debt

So yeah, paying down debt was a learning curve.  It required such repetition that it became habit-forming.  It (for better or worse) required us to think about the opportunity costs (more on that in a moment) of significant expenses.  Aside from our budget, we weighed the pros and cons of expenses deviating from the norm.  We habitually discussed how much more a certain expense or experience would delay our goal of ‘debt-free in five years.’  It felt necessary, but it was exhausting. 

When discussing the role debt elimination plays in daily life for physicians adhering to this recommendation of ‘debt-free in five years (of training completion),’ two aspects should be discussed. 

The Grind

First is the daily grind.  I would argue that, for the most part, debt elimination has a way of becoming peripheral as time and habit march onward.  Once you make larger debt repayments a routine thing, it just becomes another expense.  Much like a higher car payment or a larger mortgage, you just do it; there is no use fixating on it.  This makes the day-in and day-out of debt elimination relatively insignificant. 

Where I did happen to catch myself overly fixated on our debt elimination was on the small daily expenses that often bring joy but felt unnecessary.  Though it has become a cliché example, the regular coffee breaks at our local drive-thru seemed to inappropriately irk me.  I’m spending gas on this unnecessary caffeine when I could just make it at home!  This is wasteful, unneeded, and delaying our debt repayment, I would often think to myself.  Yet somehow, I could justify owning a boat and paying marina fees monthly for a boat we seldom use. 

Penny Wise and Pound Foolish

The second aspect affecting the daily life of debt elimination is being overly rigid in my budgeting practice. 

This was the most taxing part of debt elimination. I would get so worked up on small, often meaningless expenses that were just a few dollars a day. What I failed to realize is that these small and insignificant coffee breaks were inexpensive and one of the seldom opportunities I had to spend time for myself or with my wife. Even just thirty minutes running down the road to grab a drink and catch up with her was arguably the most meaningful and enjoyable part of my day. 

Unfortunately, in the thick of debt elimination, I often failed to recognize this or complained about it time after time. It is honestly sad that it took five years and hundreds of thousands of dollars to recognize that these little experiences were often the most appreciated, and viewing those moments as more than just expenses is crucial to happiness. 

Our Emotional Relationship With Debt

My example above alludes to something much larger when it comes to our relationship with debt. For each of us in the throes of debt elimination, there is commonly an underappreciated emotional aspect that we must address. 

I think the truth is that I was largely frustrated at intangibles.  My anger was never directed at any one individual other than myself.  I was angry that I hadn’t educated myself sooner on the implications of taking out such colossal debt.  I think these negative emotions were fueled by my realization of how much interest had worked against me as my self-education in personal finance started to take effect.  Thank God I learned what I did and intervened immediately, but so much damage was already done, and so much emotion was already invested. 

Opportunity Costs

Though our incomes as physicians offer us many prospects, there are real opportunity costs associated with prioritizing debt elimination. I think this, too, takes an emotional toll on many who work to climb out of debt. 

For starters, our incomes are low as trainees (residency and fellowship).  This understanding makes it even harder to prioritize your debt while working over 80 hours a week and scraping by.  A resident’s ability to put money away is difficult, and the amount they can reasonably afford is small.  Often, despite contributions towards debt, interest still takes effect, and your total reimbursement amount continues to grow.  It can feel like you are tossing money into the abyss.  While our non-healthcare colleagues or debt-free friends are spending their money, we feel like we are throwing ours away.

Further, as we come into higher earnings, we feel hamstrung as a significant portion of our income targets debt elimination.  True, this forces us to learn sound financial habits, like avoiding debt and living below our means; it also exaggerates this feeling of delayed gratification, a feeling that (if left unchecked) will boil over into anger and resentment. 

With each passing month (and year) that significant contributions are made, you cannot help but think about what else that money could have been used for.  The house needs upgrades. Our car is on its last legs. Is our retirement on track? We haven’t saved enough for our children’s education. We never take vacations anymore! I can hear my inner monologue unraveling…

There are real opportunity costs associated with debt elimination. I do not think most physicians struggle with not affording luxury items immediately after training completion. Most well-educated individuals understand that luxuries are not necessities. However, for many fixated on intelligent investments and sound financial planning, putting so much money towards debt can be unnerving while other financial goals remain unaddressed.

Not everyone needs to pay off their loans in five years. For many, this process can be drawn out. For others, the hopes of Public Service Loan Forgiveness (PSLF) remain on the horizon, and the dream of debt forgiveness inches ever closer. However, there are real concerns about this approach as well. 

Debt Difficulties in Our Current Political Environment

Like many other physician finance content creators, I have always advocated for pursuing PSLF above all else.  Not because I am head-over-heels for the program, but because common sense would dictate that if the federal government is willing to forgive hundreds of thousands of dollars of debt simply by making small certified payments while already working your chosen career, then who would not choose this?

The joke of this, of course, is that I did not pursue PSLF.  There are several reasons for this decision, but largely, our interest was high, and my wife initially pursued a career at an institution that did not qualify for PSLF.  As such, we refinanced as often as we could to get a more competitive rate.  However, as time has passed and our political climate has changed, I have grown concerned about the tradition of pushing PSLF.  And I am not the only one.

A Growing Concern

For now, I still believe that PSLF should be the first option considered and pursued for graduating medical students.  But with the recent SAVE repayment plan litigation, forced forbearance on some individual loans, and the growing financial anxiety that comes with election uncertainty, I think the decision to pursue PSLF is more complicated now than ever. 

The current administration has greatly emphasized debt forgiveness and appears to be utilizing every avenue possible to forgive the most debt.  However, I also fear that labeling this as ‘good’ is equally as tricky.  Of course, debt forgiveness is helpful for those enrolled in the program, but answering if it is ‘good’ is a much more difficult question.

The United States is carrying more debt than ever, and the rate at which it accumulates debt has accelerated.  Medical education costs are rising, and so are the costs of homes (amongst other large expenses).  With so many high-income earners (i.e., individuals who realistically can repay their debts) deferring debt repayment to prioritize other expenses, living with the expectation that an entity will swoop in and forgive their debts remains… concerning. 

I am not saying that debt forgiveness is right or wrong.  If there is an opportunity to avoid spending life-changing amounts of money, you should pursue it!  But having a generation of physicians expecting their collective tens of billions of dollars of debt to be forgiven while the government fights to combat a growing deficit remains a high stakes gambit.  I fear that the odds fall out of the physician’s favor as our political divide widens.   

The Highs

A Feeling Like No Other

There is an upside, however.  I will emphatically remind physicians that their incomes allow them to pay their debts.  Further, their incomes allow them to make financial mistakes and recover.  The feeling is genuinely incredible now that we have eradicated my wife’s debt, and mine resides on autopilot.  Few things in this world are comparable from a financial perspective.  I imagine this sensation of relief and joy is the same experienced by those who have their loans forgiven.  It finally feels like there is a future for my earnings. I feel like I can release a breath I have held for almost a decade.

Now, I can rebuild my financial security blanket, tackle other important goals, and not fret about unexpected or unnecessary expenses.  Though I wish this realization had manifested sooner, I revel in the times when I can grab coffee with my wife and just drive.  You can enjoy these moments well before you pay off your debt. Still, something about freeing up discretionary income and recognizing the achievement of your financial habits just hits differently. 

Teamwork Makes the Dream Work

Debt elimination, if you are in a relationship, is 100% a team effort.  I feel my relationship with my wife was strengthened through our shared pursuit of it.  Aside from achieving a massive accomplishment together, the ebb and flow of enthusiasm was better balanced between the two of us.  As life goes on, my enthusiasm or drive to pay off debt would wax and wane, as would my wife’s.  However, it was incredible how in my moments of weakness, she would remind me of all we are working towards, and I would do the same for her. 

These actions acknowledged that we both were invested and willing to shoulder more weight periodically when the moment called for it.  I consider this a ‘high.’  Life will throw many obstacles at your relationship; debt is one of many.  Learning the necessary skills to adapt and support one another when the going gets tough is just a skill to continue to polish. 

Take Home Points

Debt elimination is much more than just perseverance and finance.  It is about the alleviation of anxiety.  It is about acknowledging the complicated emotional relationship we have with money.  Physicians (and other healthcare professionals alike) are exposed to personal finance in a very broken way.  Fortunately, these individuals are also consistently some of the most driven and intelligent people our society creates.  As such, with the right financial self-education and exposure, debt elimination is an opportunity to prove and execute the habits you have worked so hard to nurture.  This is important as these are the same habits that will lead to your future success far after your debt is a thing of the past.  As always…

Stay motivated!

The Motivated M.D.

I hope you enjoyed this article The Highs and Lows of Debt Elimination. If you did, please share it with others using the ‘share’ buttons located on the left-hand sidebar (on desktop) or below this article. It would also be very helpful if you would follow us on social media! Instagram and X (Twitter) accounts can be found using the right-handed sidebar (on desktop) or below (on mobile devices). Thank you!

What do you see as challenges to paying down debt? What wins have you experienced? In the comments below, let us know about The Highs and Lows of Debt Elimination. We love to hear from you.

Standard Disclaimer: None of the information on this website is meant as individualized financial or medical advice.  These posts may contain affiliate links.