During my residency and fellowship, I moonlighted. Admittedly I lived in expensive cities – New York and DC – but even if I had been somewhere else, the reality is, trainee salaries can be limiting. I reasoned that I could either spend less or make more, and since I wasn’t very good at the former, it had to be the latter.
Now I’m an attending, and I don’t have to moonlight – but finances are still something I think about on a pretty regular basis. To be completely honest, I think that my being single has forced me to personally learn financial literacy in a way that some of my married girlfriends haven’t (because they are making decisions with someone else, or sometimes, because the someone else is making all the decisions). Saying that out loud makes me feel like a bad feminist, and the truth is, we would all be better served by understanding the basics and beyond.
Some of them are universal: get rid of debt, pay off credit card balances every month, and max out 401Ks. I also find checklists like the one from FairyGodBoss very helpful as a starting point. But the reality of a cardiologist’s salary is that I have some money left over, after my mortgage, tuition, and monthly expenses, and so I learned (and am still learning) what to do with it. A few years ago, I read in an article that women lose out from not investing, somewhere between 50K and 2 million dollars! That is a lot of money, and there is just no good reason for that to be the case.
I started with a planning session at Learnvest. Three years ago I did not have enough savings to make meeting with a financial planner, with their 1% service fees, worthwhile, but I wanted to iron out a strategy for saving. For $200, over ninety minutes, someone went through my finances with me and helped me map out an arrangement for achieving my five-year financial goals. I found it to be a worthwhile experience and would definitely recommend it to anyone who might be interested.
Then I opened a high-yield savings account (I went with Ally Bank) to start creating an emergency fund. Most folks will say that an emergency fund should have six months of take-home salary set aside. I personally found that weekly transfers of a smaller amount were more palatable than a larger monthly amount, and I do think that the step of separating this account from my regular bank account was crucial. Because I’m not checking my savings account regularly, I don’t really think of the money as mine, which means I don’t spend it. Everyone has different habits; I tend to spend money liberally when I’m flush, so this approach works well for me.
My next step was to explore retirement. This one was trickier because there is much about my lifestyle now that may or may not be true when I’m in my 60s, so obviously there was some guesswork involved. But, websites like Nerdwallet and AARP have fantastic, easy-to-use calculators that helped me figure out how much extra I should set aside now. In the beginning, seeing the stark difference between where I was headed and where I wanted to be was impactful. And it is key to start this process early so that money has time for compound interest to work its magic – compared to other professional fields where there is no residency equivalent, in medicine, many of us are already a few years late to the game.
I’ve read a lot about diversifying investments and I understand the rationale behind the concept. Putting it into practice has proven to be more difficult for me. For instance, I know that I should invest in the stock market, so last year I downloaded the RobinHood app and gave it a try. But I found that the daily rise and fall of stocks was stressful – I believe stocks are supposed to be at least a several-year investment, but I couldn’t not check mine every single day! The experience helped me understand that every option is not right for every person, and that I should look around for the slow-and-steady growth funds that I personally trust more. At the moment, I am intrigued by a website called Fundrise that does group investing for real estate. And in writing this blog post, I learned about Ellevest which also seems promising.
On a somewhat related note, I learned on a date of all places that I can start putting money in a 529 plan before I actually have kids of my own. I trusted but verified, and it appears to be true. (I also stumbled across this handy myth-breaker regarding 529 plans). Apart from the obvious point, I have found that talking about my finances, which I can do without actually sharing my bank account balance, has helped me learn about good practices and helpful resources that I might not have otherwise known. Again, there is simply no good reason I can think of to leave this topic a black box.
Once every quarter, I sit down with my Excel spreadsheet to check in and ensure that I am still on track to live the life I want. I’ve got the basics down, but there is always more to learn. And learning financial literacy is just like learning anything else – a little overwhelming at first, but now that I have the vocabulary and key concepts, I am finding it easier to understand more and ask better questions. I want to share a few tools and websites that I have found to be particularly helpful on my way – there are tons of good options, and these are the ones I like:
- White Coat Investor’s Twitter Account
- Adam Grossman, the founder of Mayport, has a (free!) weekly email that I find understandable and thought-provoking
- A friend told me about Charles Schwab’s Robo-Advisor, on my list to explore
- The Motley Fool, a website that’s apparently a good introduction to the stock market (this is a new resource for me, too)
The last thing I’ll share from my personal experience is that lifestyle creep is a real thing. I think that being aware of it is the first step to minimizing its impact. I certainly don’t always get it right, and I probably have more Jimmy Choos in my closet than I need – but because I’m managing my money, I know that a la Carrie Bradshaw, I will not end up being the woman who lived in her shoes.