Physician Money Mistakes Part 2: My Journey to Avoiding Financial Pitfalls

The days are long, but the years are short - or so the saying goes. Many of us have faced financial challenges on our road to becoming physicians. In part one of my blog I wrote about how I had no student loan strategy, didn’t maximize retirement contributions and also invested in some things I had no clue about.  As I continue my story, we'll explore more money mistakes that I made during my journey. From budgeting woes to the power of visualization, let's dive right in!

1. Neglecting the Budget: During my residency in the heart of New York City, I encountered a common issue – not having any sort of budget. I went from $160,000 in student debt, to now earning $55,000 a year and I felt rich! However, my 350-square-foot fifth-floor walk-up apartment monthly rent was $1450 (way back in 2009), eating up almost half of my post-tax paycheck. Furthermore, to catch up with friends and decompress - in retrospect I ate out a little too much and spent money like my banker/lawyer friends. It was not a smart way of managing finances effectively (but I guess YOLO right?!). As my career progressed when I became an attending, creating a budget that accounted for all my expenses became essential for financial stability.

2. Ignoring Technological Tools: Like many of us, I initially overlooked the potential of technology tools to track my spending. In today's digital age, apps like You Need A Budget (YNAB), Quicken Simplifi, Monarch Money, and Empower (formerly known as Personal Capital) can be game-changers. They have provided me with insights into my spending patterns, and help me make informed decisions and stay on course with my financial goals. They also offer great visualization tools about net worth and retirement accounts.

3. Skipping the Financial Plan: Another mistake I made was not having a written financial plan. It became clear that outlining my financial goals, from paying off debt to saving for retirement and investing for the future, was crucial. Money is just a tool. A well-crafted financial plan served as my roadmap, guiding me towards my objectives and ensuring efficient allocation of resources.

4. Underestimating Visualization: In my journey, I learned that budgeting, tracking spending, and having a financial plan were vital, but there was another aspect I had underestimated – the power of visualization. Studies had shown that creating a vision board or journaling could be a powerful tool for manifesting financial goals. Visualizing my aspirations and reminding myself of my financial dreams helped me stay motivated and focused on achieving them.

As a physician, avoiding common money mistakes is crucial for securing your financial future. Part two of my story has shed light on more pitfalls to be aware of. Don't let budgeting, technology, planning, or visualization become stumbling blocks on your financial journey. Take proactive steps to avoid these mistakes and pave the way for a financially secure and prosperous future.