money basics

5 Pro Tips I'd Give My Younger Self:

5 Pro Tips I'd Give My Younger Self:

Realize this is important. Despite what we may have been told about our careers and future high incomes, how we manage our money now matters a lot more than we may think. A lot of us are falling into a danger zone of being okay with rapidly accumulating student loans, credit card debt, and never-ending car payments. That my friend, is a very VERY scary place to be.

How we spend our money today, can drastically alter our quality of life a few years from now. The last thing you want is to be in your mid-40s still complaining about the student loan debt your friends and family forgot you had, picking up extra shifts at a job you hate to avoid racking up even more credit card debt than you already have. DO BETTER.

Resident Physicians: 6 Questions To Ask Yourself Before You Spend Your First Paycheck

 

I originally published this article on Doximity’s “Op-Med" tailored for medical doctors. Check it out below:

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As resident physicians, we work a ton! Fortunately, it’s not all in vain. Unlike our life as medical students, we finally get paid! But before we spend all the money from our first checks and start treating ourselves to over-priced dinners, let’s stop and think things through. Despite the temptation to spend what we have and wait for the next check to appear, let’s set some financial goals and create a spending plan.

Since everyone’s priorities may differ, it’s important to tailor your spending plan to your own individual needs. As you think about getting your finances in order, you must first determine what’s most important to you by answering these 6 questions:  

1.Do you have an emergency fund? Those of us who are just entering the workforce may not have started saving money just yet. However, building up an emergency fund is something we all may want to prioritize sooner rather than later. If our car breaks down or a family member gets sick, money in this fund gives us the means to pay for these events without relying on a credit card or accumulating debt. Although the amount of money in this fund may vary from person to person, having anywhere from $1,000 to 3 months of expenses is a decent starting point. 

2. Do you want to be debt free as soon as possible? Some of us are debt-averse. We can’t stand the thought of having a credit card balance and loathe our student loans more than anyone could imagine. Other people are more debt-neutral. They feel that debt was a necessary expense to get to this point in their lives and are in no immediate rush to get rid of it. Regardless of which camp you’re in, it’s important to have a plan. If you are debt-averse, you may want to decrease your living expenses and allot a larger portion of your budget to paying off credit card debt. If you are more debt-neutral you may simply aim to meet the minimum payments on your student loan balance and spend your money on other things.  

3. Do you want to save money for retirement? As young adults out in the workforce, it’s important to think about retirement. No matter how invincible we feel, we likely won’t work for the rest of our lives and will need a plan in place to support ourselves during that time. Although retirement can seem a long way away, we have to start planning for this period as soon as we can. It often takes 20-30 years to accumulate enough money for retirement and as doctors who have spent the majority of our lives in school, we have some catching up to do. While some residents may prioritize paying off debt, providing for their kids, or managing expenses in a high-cost-of-living area, others of us may able to set aside 5-10% of our income for retirement. Although we may be tempted to hold off on retirement savings for a few years, the sooner we start contributing to retirement, the sooner we can allow the magic of compound interest to work in our favor and build our net worth.  

4. Do you want to have money for vacations? As resident physicians we are often over-worked and under paid. I’m in family medicine and even I average around 60 hours per week, so I can only imagine how what life is like for some of you surgeons. Since we work so many hours with so few days off, it’s important for us to take advantage of our vacation time. While laying in bed for a week may sound like heaven on earth, we may actually want to consider taking a trip away from home. In fact, it may be a good idea to prioritize putting a couple hundred bucks a month into a “vacation fund” so that we can afford to travel the world or have a relaxing vacation once or twice a year. Many of our residencies emphasize self-care, saving up for a much-needed vacation may be the perfect idea. 

5. Do you want to live comfortably? As young professionals who have sacrificed most of our 20s to practice medicine, we can get a bit overwhelmed. While self-care for some people may involve an expensive vacation once a year, others of us may need to find more frequent sources of enjoyment, one of which may include our home environment. Instead of saving hundreds of dollars each month to take a vacation, you may instead choose to spend that money living in a nicer place. Or, perhaps you’d rather spend that money on personal massages, monthly concerts, or fancy gym memberships. Regardless of your version of self-care, you must decide how big of a priority it is for you so that you can make room for it in your budget. 

6. Do you want to give money away to others? I know this last question may seem a bit out of place, especially for us residents barely keeping our heads above water, but let me explain. Oddly enough, many people find that they get more enjoyment out of life when they give to others rather than spend money on themselves. It’s as if the act of generosity has a boomerang effect that blesses our own lives as much it does the recipient of our gift(s). For many Christians, this may mean giving 10% of their income to the church as a tithe. For others, it may mean donating to charity, supporting a cause with which they most identify, or perhaps sharing resources with someone less fortunate. Regardless, of your method, you may find that setting aside money to give to others adds more value to your life than you expected.

What am I doing? A little bit of everything. I don’t have an emergency fund, so setting aside at least $1,000 in a savings account is a top priority for me. Since I’m enrolling in a student loan forgiveness program (aka PSLF) I am in no rush to pay them down. However, I do have some credit card debt from my days in graduate school that I plan to pay off as quickly as possible. Once that debt is gone, I’ll start putting 5-10% of my income into my job’s 403b retirement plan. While those are my financial goals for this year, I also have some financial priorities for each month. I set aside a couple hundred bucks for self-care, have a separate vacation fund, and carve out a certain amount for charitable donations. Choosing these financial priorities has made budgeting so much easier and also ensures that I maintain a decent quality of life.

 

What about you? What are some of your financial goals and monthly priorities?

 

Money Tips You Didn’t Learn In College

Money Tips You Didn’t Learn In College

Be strategic about using credit cards. While having access to credit cards can provide added “protection” during emergencies, it also can be quite dangerous. I don’t know about you, but knowing I can use a credit card to pay for almost anything I want tests my self-control in ways I could have never imagined.

5 Things To Do As A Young Professional To Set Yourself Up For Financial Success

5 Things To Do As A Young Professional To Set Yourself Up For Financial Success

Learn about finance. I get it. Finance can be boring. You don’t want to spend the free time you barely have studying a subject you don’t really like. Hopefully this site can give you some quick tips about finance so that if you merely browse the info on this site you will have some semblance of what to do. Plus, if you want even more information you can use this site to find the resources and tools you need.

You should start caring about money

You should start caring about money

I know, I know finance is “boring.” It is “not your thing” and you plan to just “hire a money person” take care of everything for you in the future.

I hear these excuses and more from my classmates, friends, and other young professionals I come across daily. In the words of famous author Robert Kiyosaki “You think just because you will have a high-income job that you don’t need to worry or learn about money, but that’s wrong. Truth is, most people who make more money just get into more debt”  

Why I started learning about money, despite my [guaranteed] doctor salary

Why I started learning about money, despite my [guaranteed] doctor salary

How could I, a person with nearly $200,000 in student loan debt, even begin to think about financial freedom, investments, or retirement plans when I had no job and was still in school?

Truth is, I had to start somewhere. I simply couldn’t afford not to. The more I waited to educate myself on money management, the longer I would spend making bad financial decisions that could dig me deeper in debt and delay my life of prosperity. Things needed to change and they needed to change now.

Money mistakes to avoid as a graduate student or young professional

Money mistakes to avoid as a graduate student or young professional

Don’t take out more loan money than you need. Figure out your monthly expenses (rent, food, transportation, gas, school expenses, incidentals, etc). Only take out in loans the amount that you need and do so at the lowest interest rate you can find. Although it’s nice to have “just in case” money, for emergencies or unexpected expenses, most of us just end of using the extra money for shopping trips or vacations. So unless you have an unprecedented amount of self-control, it is probably best to only take out what you need.