5 Pro Tips I'd Give My Younger Self:

1. Realize personal finance 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 which 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 to do is 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.

2. Figure out how much you spend each month. I cannot stress how much my life changed when I actually set down and tried to create a monthly budget. Regardless of how “simple” it is, I can tell you that 90% of my med school classmates didn’t have one.

   As a med student life was so stressful studying for organ systems tests, clinical rotation exams, or Step 1 of the US Medical Licensing Exam that you barely have time to wash dishes, let alone try to understand finance. Most of my us just filled out a FAFSA form each year and magically received money from the government that covered our tuition and basic living expenses. We’d pay our rent, buy the food we wanted, and then realize we’re suddenly broke when the semester was about to end and our account balance dwindled. We’d sweat it out for a month trying to make ends meet, then fill out another finance form (aka FAFSA) and “magically” more money appeared in our bank account. Rinse. Wash. Repeat.

   No one told me not to over-spend my loan money on the post-board exam vacation I felt I deserved. No one stressed the importance of resisting the urge to “treat yo’self” during happy hour or a colleague’s birthday dinner.

   I am not saying you can’t do these things, but I want to stress making a budget because I’d bet that most graduate students and young professionals have no idea how much money they are actually spending each month. I know I didn’t. I mean I knew I was broke because I kept filling out loan applications every year, but I honestly couldn’t tell you my overall loan balance. Heck, I couldn’t even tell you my debit card balance. Don’t be as naïve as I was, DO BETTER.

3. Minimize the interest rates on the loans you have. The money you borrow now will cost you much more in the future. Let that sink in. The higher the interest rate, the more money you will pay back later. When you borrow $30,000 for school, you pay back closer to $40,000 later (assuming a 7% interest rate that you pay back over 10 years). That’s $10,000 extra you’re paying just in interest.

   You can minimize this by not borrowing as much in the first place and by lowering the interest rate on the loans you currently have. If you have credit card debt, simply call your bank and ask if they can lower the interest rate on your credit card. Yes, it really is that easy.

4. Spend less! We all want to look good, feel well, and vacation like a champ. Trust me I get it. I get envious when I see the Instagram photos of my med school classmates or work colleagues taking another extravagant vacation I cannot afford. It’s hard not to let the positive balance in my bank account distract me from the big fat NEGATIVE sitting in front of my net worth.

   As a med student, the student loan money sitting in my debit account was fictitious. It tricked me into believing I was richer than I was or that I can afford things I knew I couldn’t. When I finally had to face the big fat loan balance alongside my car payment and expanding credit card debt, I realized I needed to make a change.

   I knew I didn’t have much self-discipline so I had to stay far away from the malls. I deleted the text alerts of new “sales” from my favorite clothing stores, resisted the urge to buy a new outfit for weekend outings, and started cooking more meals at home. Before I knew it, I had changed my spending habits and paid off my car.

5. Practice self-discipline and delayed gratification. For the love of God and all things man please break your expensive habits. Mine was wine and lots of it. I liked it red, aged, and expensive. It just tasted better. But man was it costing me.

   I was spending at least $15 a week on wine, which doesn’t sound like much but when spread that across 52 weeks a year that amounts to $780. I mean I was spending nearly $800 on alcohol! This was going to cost me closer to $1000 when I paid it all back, since I was buying the wine with my student loan money. What a waste.

   Every year for Lent I tried to give it up and the day Lent ended I picked back up the habit. Don’t be me. Curve your habits. Do not waste money you don’t have on things you don’t need. Granted there is a balance, but graduate school is not the time to be treating yo’self to wine and fancy dinners every other week. Face it. We aren’t rich…yet. Quit pretending you have more money than you actually do. Practice self-discipline so you can get out of debt and start building your net worth.

Tell me, what ways have you started practicing self-discipline? What things are you going to try to spend less on this month?

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:

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?