I’m not sure about you, but I love a good sale. As a young professional who hates paying more for something than I could, I marvel at the chance to buy valuable items at a discount. The only thing I don’t like are the crowds at stores or the look of my bank account the weekend after I go shopping. If you are like me and would like to enjoy the sales without spending too much money, here are some Black Friday Tips to consider.
1. Plan ahead—set aside money for holiday spending. It can be easy to overspend during the holidays. Minimize the chance it will happen this year by planning ahead. Reserve some money from your last paycheck and find ways to lower your expenses on other items this month. Consider working some overtime at your job, try to make some extra money from your side hustle, and pull in cash from other revenue streams. I plan ahead for holiday expenses throughout the year by setting aside $100-$200 each month for holiday spending. I know other people who forgo retirement contributions during the month of December and instead use that money to pay for added expenses during Christmas time. There are even folks who sell some of the investments they made throughout the year and use the profits to pay for expenses. My point? Plan ahead to make sure you have the money you need for all of your holiday expenses.
2. Make a list of your expenses and expected purchases. One of the things that can hurt your finances is buying things you don’t need or didn’t expect to purchase. Try to avoid this by making a list of your expenses ahead of time. Include flights, money for gifts, and any social outings or restaurants you may go to. If you know you are going to do some holiday shopping, write down the things you plan to buy and leave a little extra room for unexpected purchases. Making a list of your expenses gives you a glimpse of how much you will spend and can help you prepare in advance for your purchases.
3. Search for deals but avoid the temptation to buy more. It can be great to find sales on the items you already plan to purchase but be careful. In the midst of looking at deals, try not to fall into the trap of buying more than you anticipated. If you know you need to buy clothes for one of your family members, avoid looking in the electronics section. If you already plan to buy a household appliance, avoid browsing the shoe section. In fact, if you already know what you need, then you may want to consider buying the items online to avoid the temptation of buying more than you anticipated at the stores in person.
4. Set a spending limit and stick to it. Sometimes we have good intentions but still fall short. One way to avoid that is to set an overall spending limit. Make a goal not spend more than a certain amount this holiday season, and stick to it. Set a spending limit each time you decide to go shopping. For example, my gift giving limit is $500 (which includes secret santa gifts, stocking stuffers, and gifts for each of my family members). Since I usually buy clothes during the holiday season, I also set an overall limit for how much money I will spend on myself. Once I reach my spending limit, I go home and avoid looking at additional sales. You should too.
5. Avoid credit card debt. It can be so easy to swipe a card and get all the things you desire. The temptation to buy something we really want can be quite strong. In fact, many people accumulate a substantial amount of credit card debt during the holiday season as a result. Don’t let this be you. Make a goal right now to avoid credit card debt. Don’t let one month of spending during the holidays derail all the progress you made toward your money goals this year. Simply put, don’t use money you don’t have to purchase things you don’t need. Avoid debt.
5 Truths Every Resident Needs To Know
July 1st is just around the corner and for those who are new to medicine or unfamiliar with residency life, July is the start of the new resident physician year. A resident physician is a doctor who graduated from medical school and is getting specialized training in his or her field of choice while still seeing patients. Residents are doctors who are still actively learning (like a student in school) while they are also working and earning money.
Besides experience, the main difference between a resident physician and a regular physician (like an attending physician who is done with his/her specialized training) is that resident physicians work a lot more and get paid a lot less. I’m still a resident myself, so as you can imagine, it’s a busy time in our lives. There are a lot of things we have to worry about, but finances shouldn’t be one of them. Here are 5 money-related truths every resident physician, and young professional with high earning potential, needs to know:
You are not guaranteed to be rich. Just because you are a doctor and will have a high salary, does NOT mean you don’t need a plan for your finances. Most people who make more money, get into more debt. Your time as a resident is not an excuse for poor money management and credit card accumulation. Many doctors’ net worth is not nearly as high as it should be considering how much they get paid. Make some financial goals for yourself now and try to avoid some common pitfalls. Learning a few finance basics as a resident can go a long way.
Spend less. Save more. Minimize debt. Things can be challenging during residency so try to live below your means or at least avoid living above your means. You don’t have to have a detailed budget but creating a basic spending plan to prevent yourself from accumulating [more] debt during training might be helpful. Save money in an emergency fund so that small, unexpected expenses like a car repair, urgent trip back home, or new cell phone doesn’t derail your budget or financial goals. Vacations can serve as a much-needed break from the stress of residency, but try to pay for them in cash by saving a couple hundred dollars from each paycheck. If you can, invest some money in index mutual funds via your work retirement plan or your own Roth IRA. The goal in residency is to keep your head above water financially and avoid getting into more debt.
Have a plan for your student loans. Choosing to “deal with it later” is NOT a plan. Read about the different student loan repayment options and choose one, likely an income-driven repayment plan, so that your payments are affordable in residency. Most residency programs qualify for public service loan forgiveness so take a couple minutes out of your day and sign up for this free program so that you have an option for your student loans to be forgiven after 10 years. When choosing a student loan plan recognize that the optimal student loan plan for you as resident may change when you become an attending. That’s okay. Just figure out the best federal repayment plan for you now, likely PAYE or Re-PAYE and consider hiring a company like Student Loan Advice or Student Loan Tax Experts once you finish training so they can run the numbers for you and help you determine the best repayment plan for you as an attending.
You need Insurance. As a resident physician, there’s a good chance you have health insurance from your employer that is either free or low cost, but health insurance isn’t all the insurance you need. Every resident physician needs long-term disability insurance. You may get a small amount through your residency program but that is unlikely to provide enough coverage. Most residents and attendings will need to purchase an additional individual long-term disability insurance policy. If you have a spouse, kids, or family members that you support financially, you may also need to purchase term life insurance. If you have a side business, you may also need extra liability insurance coverage. Figure out all of the insurances you need and make sure you get them.
Think twice before you buy a house. Owning a home can be a major milestone and lifelong dream, but it may not be wise to do so in residency. You cannot just compare the monthly mortgage price to the monthly rent price and make your decision. There are additional fees and costs associated with home ownership that can be challenging to deal with as a resident. Do what is best for your family, but make sure you consider all of the pros/cons of buying a home before you make the decision to rent vs buy.
5 of My Best Financial Decisions
As a young professional, I'm finally feeling as though my finances are on track. Although I've done several things to put myself in a decent position, there are 5 things that have helped me get on the right track and may help you as well. They are:
1. Learning about money. Many young professionals were not taught the basics of personal finance and investing in school. I myself had to seek out this knowledge and even when I did, I still had questions I had to ask other people. Despite the effort I put in, taking the time to learn about money management was one of the best decisions I ever made. Once I learned the basics, I was able to quickly get out of credit card debt. Doing so, saved me hundreds of dollars in interest payments and allowed me to start investing for retirement much sooner than I would have otherwise. The decision to aggressively pay down debt and increase my investments has allowed me to become more financially stable and create the foundation needed to build wealth.
2. Picking a career that pays a high salary. Not every job pays the same, but choosing a career that compensates well has done wonders for my finances. Instead of worrying about whether or not I can pay my bills on time, I can now focus on increasing my investments. Although one shouldn’t pick a job solely for the compensation, if there are multiple jobs you like equally choosing the one that pays more can have a positive effect on your finances.
3. Buying a slightly used car instead of financing or leasing a new one. When I was a medical student, I chose to buy a slightly used reliable car instead of buying or leasing a new one. When I became a resident physician, I again chose to buy a slightly used car instead of buying or leasing a new one. This decision saved me thousands of dollars both time. Instead of having a monthly car payment of $400-600, I use that money to invest in my Roth IRA and save money for future vacations and travel.
4. Living with a roommate for most of my twenties. This decision was hard to make at first. I was in my late twenties and really valued my own personal space. However, living with a roommate gave me the ability to live in a really nice place while still saving and investing a good chunk of my income. I had to prioritize my desires. Would I rather have the place all to myself or share a place for a few years and stack money I could use to pay down debt, invest, and save for fun trips? For me, living with a roommate was worth the sacrifice. As I enter my 30s I’ll likely get my own place, but choosing to live with a roommate in my twenties helped advance my finances in ways I can’t begin to articulate.
5. Investing early into retirement accounts. One of the ways many people build wealth and become financially independent is by investing money. One of the main ways they invest money is by utilizing retirement accounts (like their job’s 401K or opening up their own Roth IRA). By utilizing retirement accounts I am able to invest money in a tax efficient, passive way and build money over time. A big advantage to starting early in my twenties instead of waiting until I was in my 30s was that I gave the money more time to grow. The earlier I invest, the more time my money has to let the magic of compound interest work, which allows my money to make even more money overtime. Plus, investing early into retirement accounts taught me how to live below my means instead of inflating my lifestyle.
5 Life Hacks to Save More Money
When I graduated from medical school and started working as a physician, my goal was to spend less, save more, and live below my means. I knew that in order for me to actually accomplish this goal I needed to take certain action steps. Here are 5 life hacks I used to help me spend less and save more.
1. Set up Automatic Savings As someone who doesn’t always have the most self-control, I knew that if I was really going to start saving more money, I had to do it when I first got payed. If I waited until the end of the month or pay period to save, there wouldn’t be anything left. Thus, I had to do it at the start. I went to the payroll section of my work website and put in parameters to send a percentage of each check to an entirely separate account that I would use to save money and build up my emergency fund. The rest of the money went to my primary checking account at another bank that I used to pay bills and spend as I saw fit. By setting up automatic savings in an entirely separate account, I was able to reach my savings goals, learn to live below my means, and spend left over money in my primary checking account without feeling guilty. For me, it was a win-win. It is likely to be one for you as well.
2. Decrease the Temptation to Spend. As someone who feels the need to “treat myself” more often than I should I had to decrease the temptation to do so. It wasn’t enough for me to say I wouldn’t spend as much. I literally had to remove temptation for me to spend. That meant deleting the text messages from clothing stores about new sales and unsubscribing from department store emails or sending those emails to an account I barely check. It meant avoiding trips to the malls or outlets and trying to pay attention during zoom meetings instead of online shopping during periods of boredom. What things can you do to decrease the temptation you have to spend money?
3. Minimize how much you eat out. If there’s one thing about me, it’s that I love to eat. I appreciate good food and like to enjoy it when I can. Although I cook a good deal at home, there is something about eating a nice meal from a restaurant that really makes my heart smile. If I wanted to save more money, I knew I had to curve this habit. Not eliminate it entirely, but at least minimize how often I ate out, because although it was enjoyable it was costing me a lot of money. I try to minimize brunches and have small gathering with my friends at one of our homes instead. Minimizing how often I eat out has saved me a great deal of money. If you also have a habit of eating out often, perhaps you should consider decreasing the frequency to save more money.
4. Wait before you buy. One of the things that has helped me save a lot of money was minimizing impulse buying. Impulse buying is when you purchase something spare-of-the-moment that you may not need and likely would not have gotten otherwise. In order to decrease this occurrence, I started implementing a new rule of “waiting before I buy.” If I see something I want to purchase that isn’t a necessity, I make myself wait a few days before I purchase it. If I still want the item after a few days, then I purchase it, but I’ve found that oftentimes I don’t need or want the item as much as I thought. Consider implementing a wait-before-you-buy rule to decrease your spending as well.
5. Invest what you spend. This is another life hack I’m planning to implement this year. It’s the art of investing the same amount you spend. For example, if you want to purchase something for $100, then you must also commit to investing $100 or putting $100 in a savings account. Thus, anything you want costs you twice as much. Doing this prevents you from buying things you may not need and also ensures that you build up your savings/investment accounts simultaneously. If you are truly committed to spending less, saving more, and living below your means, this is a life hack worth trying.
3 Main Ways the Rich get Richer (and you can too)
6 Step Money Challenge for 2020
As we embark upon this new decade, many of us are committed improving our finances. We may have vowed to stick to a budget or have a general goal to live below our means. While these are noble goals, let’s challenge ourselves to do even more. Here’s my 6 step-money challenge for 2020:
1. Buy 1 or 2 finance books to read. There are many different ways to consume information but I’m a firm believer in the benefit of books. While I enjoy blogs, books can be a one-stop-shop for the information you seek. Having books allows us to highlight certain passages and tips that make the material a consistent resource we can refer to throughout our journeys. Plus, it provides a single resource we can use to learn about a several different topics or go in depth on one particular area. There are plenty of good finance books but I think the white coat investor has a list of recommendations organized by various categories that can be useful. When I started on my personal finance journey my favorite books were Rich Dad Poor Dad, the White Coat Investor, and the Total Money Makeover. I’ve just purchased How to Think about Money and tend to refer to Ken McElroy’s The ABCs of Real Estate Investing as I’m thinking over new real estate deals. There’s always more to learn and books are a great way to do that. Pick a couple finance books to read this year.
2. Download a finance podcast. As someone who is intellectually curious and loves to be efficient during my “off” time, I consume a lot of finance information via podcast. Whether it’s the “Hippocratic Hustle” giving me insight into ways other female docs have increased their income, “Docs Outside the Box” giving me new ideas on ways to create additional revenue streams, or the “White Coat Investor” providing step-by-step instructions on how to do a backdoor Roth IRA, podcasts can be a great way to learn about various finance topics without requiring a huge sacrifice of your time. Most episodes are 30-45min or faster if you alter the playback speed. Whether you’re commuting to work, cooking dinner, or working out at the gym, there are plenty of good podcast options. As you continue along your journey of increased financial literacy, download a finance podcast and commit to listening to 1-2 episodes a week.
3. Join an in-person or online group. Along with increasing your knowledge via books and podcasts, strive to be more active as well. Whether it’s participating in a finance-focused Facebook group, joining the Bogleheads F.I.R.E. (financial independence retire early) online community, or going to real estate investor meetup groups in your city, surrounding yourself with likeminded people can be beneficial. In fact, it’s this active engagement that can propel us even further along in our journey. These groups and online communities challenge us to share our goals with others and inundate us with people traveling a similar path. They also provide a slew of contacts that can keep us motivated and accountable. As you continue along your journey, commit to joining at least one finance or investor group.
4. Create a spending plan for the next month. There couldn’t be a money challenge without a point on living below your means. While many of us would like to increase our savings and invest more, this can be quite challenging to uphold. Sustainable change involves altering our behaviors and putting boundaries in place that keep us focused on our goals. One of the best ways to do this is by creating a spending plan for the next pay period. While most of us know where large chunks of our money are spent, there still may be things that go unnoticed. The challenge for this year is to create an active spending plan that outlines which things we will purchase, and which bills will be paid on certain dates. It also includes automating our payments so that a percentage of our income automatically goes to various savings accounts or investment funds. If you haven’t already done so, create a spending plan that automates payments and “forces” you to live below your means.
5. Pay off “bad debt” early. I’m a huge proponent of paying off consumer debt, especially when the interest rate is higher than 7%. Many of us understand the importance of getting the match to our retirement plans, but once that’s done, we are unsure on what to do next. The correct answer may vary from person to person but generally speaking, once you have at least a small amount of cash for emergencies, you should prioritize paying off consumer debt like high-interest credit cards or car loans. Although investing in the stock market is another great option, the guaranteed return from paying off debt cannot go unnoticed. Plus, paying off consumer debt faster will increase our monthly cash flow and allow us to invest even more towards retirement once the debt is paid off.
6. Give more to charity. Although we each have different priorities and plans for our money, one of the things I challenge you to do this year is think outside of yourself and give more. Even though it can be tempting to delay helping others until we have met all of our own individual goals, I challenge you to find ways to give in the midst of this journey. Oftentimes, we find the most happiness when we find ways to assist others. Giving has helped me stay grounded in the midst of success and allowed me to help others in a way that has increased my own quality of life in ways I never imagined. In 2020, I challenge you to find ways to give more. Doing so may impact your own life more than you may realize.
Tell me, what are some ways you will challenge yourself to improve your finances this year?
5-Step Money Challenge for the Holiday Week
1. Pick one charity or organization to donate to as a family. The holiday season includes a lot of celebrations but it also a time we give. Whether it’s putting a little extra in the church offering or giving our spare change to the solicitors outside of our local grocery stores, many of us express our generosity around the winter holidays. Why not take it a step further this year? Together, with your family members or close friends, pick a charity, organization, or church to give an extra offering to this holiday season. Doing so not only makes us less selfish but it allows us to enhance the lives of someone else.
2. Have a limit on how much you plan to spend during your next restaurant outing and stick to it. While sticking to a budget for an entire month can be a bit challenging, why not take baby steps towards this goal during the holiday season? We can do this by thinking about our next restaurant or social outing and coming up with a budget of how much we want to spend. Then stick to it. For example, if you plan to go to dinner with friends then look at the menu ahead of time, determine how much you plan to spend, and make a concerted effort not to go over that amount when you actually get there. Whether it’s a restaurant or some event in our city, try to use self-control by sticking to a budget, not matter how large or small it may be.
3. Vow to do 3 things that don’t cost any money. Because of the holiday season many of us get additional time to spend with the people we love. While we may be tempted to go out to dinner and do various things around the city, we must be conscientious of how much we’re actually spending. Part 3 of this challenge is doing 3 things during the holidays that don’t cost you an additional money. You could watch a Christmas movie on TV, listen to a holiday album, or bake cookies with ingredients you have at home. You could also video call family members that aren’t with you in person, decorate a Christmas tree with your kids, or play a fun board game with your family. Regardless of what you choose, pick 3 things to do that don’t cost you any extra money.
4. Purchase at least one meaningful gift for someone you care about. Along with donating money to others, another part of the holiday season is showing appreciation to the people we care about. While we may be tempted to purchase new designer items or expensive electronics, this year deviate from the norm. Think of one inexpensive, but meaningful gift you can give to someone you love. Maybe it’s a book they’d like, a bottle of wine they’d love, tickets to a show or concert they’ll enjoy, or a framed photo of one of your favorite memories.
5. Pledge to learn a little more about personal finance. Along with giving to others and spending time bonding with those we love, as money savvy young professionals we should take this challenge a step further. This holiday week, why not pledge to learn a little more about personal finance as well? We may not have time to read an entire book or go make a budget for the entire year, but we can still start small. We can pledge to spend at least 1 hour increasing our financial literacy. For example, we could listen to a podcast episode on how to best pay off our debt or read a couple chapters in a book on different ways to save money for retirement. We could even skim a few blogs on different ways to get involved in real estate investing or learn how to lower our tax rate in the upcoming year. Whatever the topic or the method, we should vow to spend a little time this holiday season learning more about personal finance and different ways to build wealth.
Tell me, are you willing to try to 5 step holiday money challenge?
Affordable gifts for co-workers and associates
It’s that time of the year. Along with warmer clothes and holiday decorations, the Christmas season also calls for gifts. It’s the time of year where we buy things for others to show our gratitude for all they’ve done throughout the year. While we may be excited to purchase gifts for our family members and close friends, we may feel obligated to pick up a few things for our co-workers as well. Whether it’s a “Secret Santa” or organized “Gift Exchange,” you may be at a loss of what to actually buy that won’t break your bank. Aside from mugs that break before Christmas arrives, socks we lose the match to before the year even ends, or candles full of awkward scents we’d never want in our home, we may need some new ideas on affordable gifts for co-workers and associates. Checkout some ideas below:
1. A book they wouldn’t think to get for themselves. Everything isn’t for everyone. BUT…if your co-workers are like mine, they might enjoy a good book every now and then. Whether it’s a non-fiction piece that inspires them to be a greater, a novel that allows them to escape into another world, or Do-It-Yourself guides that turn them into better cooks or workout specialists, there is something for everyone. The key with gifting a book is to understand what that person would enjoy and buy them something they’d like but wouldn’t think to purchase for themselves. If your co-workers like NBA basketball, a book about Lebron James or Michael Jordan might be great. If they love movies, getting them a book written by their favorite actress or comedian might be good.
2. Wine they would enjoy. If your co-workers are anything like mine, they enjoy a nice glass of wine every so often. Although wine is a staple “dinner-party gift,” giving it away during the holidays is usually well-received. The key to buying a good bottle of wine is getting something that you yourself have tried and know is good. It’s not enough to buy any Chardonnay or Merlot, you have to get a wine type they’d like from a brand you trust. In my personal budget-friendly opinion, wine bottles under $8 are hit or miss and many wine bottles over $30 are over-rated. However, I can always find a good bottle for $10-15. If your co-workers tend to like sweeter wines, try a Riesling over a Moscato, it’s still relatively sweet and bubbly so it may be something they’d like but haven’t had before. If your co-workers like red wine, try giving them a “red blend.” It’s a combination of 3-4 classic red wine types that provide a rich flavor and a tasty finish. If all else fails, find a sales associate, tell them the type of wine you want, and ask him/her what the most popular bottle in your target price range is. 9 times out of 10 they will lead you down the path of success.
3. Custom cards with handwritten notes. While gifts can be great, it is often the thought and meaning behind the gift that counts even more. Many of my physician colleagues aren’t exactly hurting for money and can buy themselves whatever they like so I try to stay away from super expensive gifts and instead get them something more meaningful. In fact, my brother and I try to give out hand-written cards. I’ll buy a pack of blank cards with a cute stock photo or picture of my family, then write hand-written words of appreciation, detailing how special they are to me. While this may sound a bit cumbersome, they are well-received. We all love to be thanked and valued, these words of expression can mean more than you’d imagine.
4. Framed memories of happy times. I love to give photos. With things being so digital nowadays, many people have pictures on their phones but very few have actual prints. One of the things you can do is go to the photo booth at Target or Walmart, or even the local drug store and print out one of the photos on your phone. Then buy a cute picture frame and gift them a framed memory of some happy time you two shared. As my grandmother always said, giving someone a photo with a frame is not only proper etiquette but it virtually ensures that the photo will be displayed someone in their home or office. In other words, it has a more lasting effect. Plus, it’s pretty affordable. You can get a decent photo print and an 8x10 frame for under $15.
5. Intriguing desserts that delight the palate. One of my other affordable go-to-gifts for the holiday season is dessert! If you’re a great baker than put your skills to good use, but…if you’re like me in that you usually purchase pre-made mixes, hold that thought. Instead of baking something from a box, or giving someone pre-made cookies from the grocery store, why not give them a dessert they wouldn’t think to get for themselves. Use Yelp or Google to find some of the best bakeries and chocolatiers in your city. Purchase an assortment of some of the most popular items and have them put it in a little gift basket with holiday themed wrapping and some hot chocolate mixes. We all love sweet desserts around the holidays.
Tell me, what are some other affordable gifts you give for co-workers and associates?