Originally created by Katie Rebillot, D.O. for the 2016 Emergency Medicine Wellness Week
There are a few key rules to live by when it comes to becoming financially independent and oh-so-savvy.
PAY YOURSELF FIRST
You should be taking a percentage, usually 10-15%, of every paycheck and putting in the bank, whether that be in a savings account, Roth IRA, or other investment opportunity. Most companies let you do direct deposit so you don’t have the urge to go buy those Christian Louboutin’s that just went on sale for $500.
We all have student debt (well, most of us) and usually with absurd interest rates. If possible, you should try to consolidate and/or refinance to bring your monthly payment to its possible lowest amount. And don’t miss a payment. Pay loans now, Loutboutins later.
LIVE (financially) LIKE A RESIDENT
All good things in moderation. This is where a budget becomes your best friend. Whether you use Quick books, Excel spreadsheet, Mint.com, or ink well pen and ledger, you should be monitoring your cash and debt flow to optimize every paycheck you get. Plus, this is how you budget fun stuff too (like Louboutins). But seriously, part of wellness is doing things for yourself, taking vacations, having hobbies that are not medicine related, so you must budget for these expenses. For residents, we have other financial responsibilities we must meet first, and then we can have some ‘wellness’ money.
ASSEMBLE A SQUAD OF FINANCIAL GURUS
Unless you married an accountant, your money will be well spent hiring one, plus a few of her best friends: financial planner, investment banker, etc. They cost a pretty penny, but will help you maximize your money in terms of getting the most out of your tax returns, investment opportunities, mortgages, refinancing loans, and more! You’ll love them so much from all the money they are making for you, you’ll wanna buy them a pair of Louboutins. But don’t.
Here we are talking about life, disability and malpractice insurance. As residents, we should all have disability and life insurance, and malpractice insurance will be needed sooner than later. Different practices and companies offer different plans, just do your research before diving in. Because, “It’s not if you will get sued, it’s when.” So make sure you’re covered.
LOVE YOUR FUTURE
Retirement requires a ridiculous amount of capital and takes some planning in terms of what you want your retirement to look like. Whether you become a global galavanter to far parts of the world or you want to stay home and care for your grandchildren, anything you do will require savings because you will not have a steady flow of income. And if you plan to live at the same level of comfort you have accustomed yourself, savings is key. Most retirement plans have compound growth and some companies will match a certain percentage, so saving earlier is always better.
Now that you’ve become financially savvy, and have planned and scrimped and saved for all your wellness activities…go buy those Louboutins!
For even more tips
- Finances as resident part 1: http://www.podcastchart.com/podcasts/the-hippo-em-resident-call-room/episodes/finances-in-residency-part-1
- Part 2: http://podbay.fm/show/729067988/e/1429634390?autostart=1