2 minute read
2 minutes
Congratulations, you've landed your first job out of training and you are now making considerably more income than you ever have in your life! As a resident or fellow you likely had no problem allocating your income as it was enough to cover your obligations, but what do you do now that you have much more income to deal with on a monthly basis? While it might be tempting to go out and spend your extra income, that will do little to grow your wealth. Assuming you do intend to grow your wealth, then making use of these basic physician budgeting tips can be a great way to manage your money.
Budgeting is akin to diets for many. They sound restrictive and the assumption is that they allow you to do nothing fun in life. This assumption, however, could not be farther from the truth. The problem is when people do not make budgets that will fit with their lifestyle and what they want in life. What is intended to breed freedom, actually breeds resentment and thus the budgeting fails. The key when implementing these, or any physician budgeting tips, is to see your money as a tool and how you want to use that tool and thus making your money work for you and not the other way around.
You might think budgeting is budgeting – thus physician budgeting is no different than budgeting for anyone else. The difference with physician budgeting is that it is geared toward the reality that physicians earn higher salaries and have various ways to use that money. You also likely have high student loan bills which need to be paid off and your payments need to be managed to get them knocked out. This reality of higher income and potentially higher loan repayments creates a balance which must be maintained if you do plan on maximizing your income. Physician budgeting is unique in that it helps doctors see visually how they can lower their expenses as well as how they're growing their money so they can not only cut spending, but grow their wealth at the same time.
A budget is commonly referred to as a road map. Road maps are used when you go on a trip or vacation. You have to know where you want to go before you can even use your map. Using a physician budgeting is no different. You must ask yourself where you want to go in life and how you can use your money to help you get there. This can be a challenging exercise to go through, which is why we have created a physician budget worksheet here at OnCall Advisors which can help you formulate a plan of attack with your money. Assuming you want to grow your money and have it work for you, we can help you formulate a personalized budget that can help you begin your wealth building on the right foot.