Caller earning over $126,000 says he’s drowning in debt. The Ramsey Show hosts say budgeting — not bankruptcy — is the fix

If you’re earning a strong income but still feel overwhelmed by debt, you’re far from alone. One caller to The Ramsey Show (1) says he makes more than US$126,000 annually — yet felt so stuck that he wondered if bankruptcy was his only option out of his financial tailspin.

As hosts George Kamel and Jade Warshaw dug into his numbers, the problem became clear. Peter didn’t actually know how much he owed, didn’t follow a budget and had little visibility into where his money was going each month.

Once everything was laid out — forgotten credit cards, a pension loan and old balances — his debt wasn’t US$25,000 after all. It was closer to US$59,000.

That’s still a serious hole to climb out of, but Kamel and Warshaw were both blunt: Peter didn’t have a math problem, he had a spending and planning problem. But it was one that could be fixed with structure, discipline and a realistic budget.

What The Ramsey Show hosts recommend

The first step, the hosts said, was simply seeing the full picture. As Warshaw put it, once everything is written down, “at least it’s not the boogeyman and all the unknowns.” A budget is only reality on paper — and for many people, that clarity alone brings relief.

Kamel agreed.

“Once you do this budget, you’re going to figure out your main expenses,” Kamel said. “Food, utilities, housing, transportation, insurance and minimum debt payments. Anything beyond that, you’re going to get real judicious and cut out.”

Peter admitted that takeout food was draining far more of his income than realized. And it’s a common trap. Dining out, convenience spending and small daily splurges are often where high earners overspend the most money without noticing.

“Eating out — that’s got to go,” Kamel told him. Cutting back may feel uncomfortable, but it works faster than bankruptcy and costs far less than letting interest pile up month after month.

Peter had considered the idea of bankruptcy early in the call, but the hosts strongly pushed back. With his income, they said, bankruptcy would likely cause more long-term damage that far outweighs the short-term relief.

“You are the answer,” Warshaw told him. “Debt is not a shortcut. It’s not the answer."

Debt is common in Canada, especially as housing, food and transportation costs rise. According to Experian, as of Q3 2025, Canadians were carrying an average of C$22,321 in consumer debt, excluding mortgages (2). The Canadian Mortgage and Housing Corporation (CMHC) reports average mortgage debt at slightly over C$300,000 as of Q2 2025 (3).

But the hosts’ point was simple: debt itself isn’t the crisis — lack of awareness and uncontrolled spending is. Once the numbers are clear and spending is brought in line with income, even large balances can become manageable.

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How to get out of debt and avoid bankruptcy

If you’re feeling similar financial pressure, the steps Warshaw and Kamel outlined offer a clear way forward.

Set a budget

Start with your take-home income, then list your fixed costs: housing, transportation, utilities, food, insurance and minimum debt payments. Use bank and credit card statements, not memory, to see where your money is actually going. A budget isn’t restrictive: it’s a way to regain control.

Cut your spending

Identify categories that quietly creep up, such as dining out, subscriptions or impulse purchases. Cut back aggressively at first to build momentum. Even modest changes can potentially free up hundreds of dollars each month to put toward debt.

Consider consolidation only when necessary

If you’re juggling several high-interest balances, a consolidation loan can simplify payments and lower your interest costs. More serious options, such as debt relief programs, may reduce what you owe but often come with fees and damage to your credit. These solutions should be last-resort — not a substitute for ongoing overspending.

Increase your income

Cutting expenses has its limits. Extra shifts, overtime, freelance work and side hustles, or selling unused items of value can boost your progress. Even a few hundred dollars more each month can significantly shorten the time it takes to get out of debt.

Why high-income earners can still feel broke

Earning a strong income doesn’t guarantee financial freedom. As paycheques grow, fixed costs grow with them — larger homes, newer vehicles, higher insurance bills and more convenience spending. Without a clear budget, it’s easy for money to disappear before you realize where it went.

That’s why many high earners feel constant pressure, even with six-figure salaries. Usually, the issue isn’t having adequate income: It’s visibility. When spending isn’t clearly tracked and priorities aren’t set, even a good paycheque can feel like it isn’t enough.

It’s a situation exactly as Peter described. But once the numbers were laid out, the stress became manageable and the solution more obvious.

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Bottom line

Peter’s story is a reminder that a high income doesn’t protect you from financial stress if your spending is unplanned and unchecked. Debt becomes overwhelming when it’s hidden, ignored or misunderstood — not necessarily when it’s big.

Before considering drastic solutions like bankruptcy or credit recovery programs that can damage your credit, start by writing out each balance, building a realistic budget and cutting back on excessive discretionary spending. Clarity and consistency can turn even a heavy debt load into an easily solved problem.

— with files from Melanie Huddart

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

The Ramsey Show (1); Equifax (2); Canadian Mortgage and Housing Corporation (3)