By The Motivated MD, Guest Writer
There are times in our lives that force us to stop and reflect. If I am being completely honest, I am a very self-reflective person. Recently, I found myself thinking a lot about the roles of money and personal finance in my marriage. That may seem ridiculous to say, coming from a personal finance blogger. Of course I think about personal finance. I literally write about it every week! However, with this post, I want to approach my thoughts and reflections from a new angle.
I write a lot about personal finance as it applies to my life and profession. However, I rarely provide my readers a doorway into how this interaction plays out in my day-to-day marriage. What are we (my wife and I) putting ourselves through to solidify a strong financial future? Is it worth it? Is it too much to ask someone to live like a resident when you are making “doctor money?” Here is a financial love letter to my wife for all she puts up with.
A Moment of Reflection
Just the other night, after our kids were finally asleep, my wife, an emergency medicine physician, and I settled in to watch the series finale of Ted Lasso. We had grown to love the show, and we were eagerly waiting for a time when neither of us was working nights or on call to watch the final episode. I won’t give any spoilers here, but needless to say, it pulled at our heartstrings and asked us to reflect on the age-old question of time vs. money. What is an amount of money that is “life-changing?” Is there an amount of money that would make you re-evaluate what is important to you? Your goals? I spent that night laying in bed relentlessly going over this trade-off in my head.
The next day we found ourselves on our usual morning routine. Out to walk the dog with our daughter as she gets FOMO (fear of missing out) if she is not included. We walked and talked, addressed our daily agenda, and determined how long we needed our nanny that day. Eventually, our conversations were divulged into finances, as they often do—whether it's addressing how much is on the credit card or if we need to add more money to our emergency fund. Despite payday coming up, it just seemed like we would (again) not be able to “do it all.”
We would have to pay off the credit card entirely, but this would limit our ability to replenish the emergency fund. Furthermore, we both knew we needed to tighten the budget this month. Money would likely be tight with all the travel for graduations and family events. How is this possible? We are two freaking physicians making (academic) attending salaries, for crying out loud! How are we still in our mid-30s and having to make the same financial decisions we have since our intern year?! Inevitably, the conversation would make me seem overly frugal or mistakenly label my wife as a bit indulgent—comments that clearly do not help the situation.
More information here:
My Emergency Fund in Action
The (Self-Induced) Financial Pressure
How did we get here? Well, it is actually straightforward. We met in medical school, ultimately built a life together, and married. With the unification of our lives, so too did our debts combine. We faced a $670,000 educational debt for choosing to be physicians. With our debts fully realized, we took to recommended resources and self-education. We had to build a plan. With time, we created our financial plan, prioritized debt elimination, and started to chip away. Anytime we moonlit in residency, it either went toward affording our wedding or toward our student loans. There were endless shifts and countless nights working extra just to make a dent in our debt.
With time, we started to celebrate our progress. First, paying off $50,000, then $100,000. As my wife completed training and I entered fellowship, we could make annual payments of $100,000. It was not until 2022 that I finally completed my fellowship and could start to “carry my weight” regarding my income. With us both making physician salaries, we could finally destroy our debt, right?
We continued to keep our goal of paying $100,000 toward our student loans annually. Still, with a family of four, childcare, the cost of living in a coastal city, helping family members, and financial responsibility (emergency fund, maximizing retirement contributions, investing) . . . the financial pressures started to build. How is this possible? Our take-home pay is over $300,000. We do all the right things, after all. Just to name a few of our habits, we do the following:
- Keep an emergency fund of approximately three months of living expenses
- Max out our retirement accounts
- Invest regularly
- Plan far in advance for big purchases
- Exclusively buy used cars in cash
- Keep no other debts
- Purchased a home far below what we could afford
- Invest in index funds
- Avoid lavish or frequent vacations
- Pay massive amounts toward our debts annually
- Stick to our financial plan, which we review annually
If we are doing everything right, why does it feel like we cannot get ahead?
Really Living Like a Resident
This, my friends, is what it really means to live like a resident for 2-5 years after training. It is a bit different for my wife and me, depending on perspective. My wife completed her training in 2019, while I did not complete training until 2022. So, my wife has been living like a resident for longer (it's one of the side effects of marrying a younger physician).
See, like the grueling process of medical education and training, no one can really make you understand the realities of living like a resident until you do it. Does any altruistic college student know what lies ahead when pursuing medical school? They will not understand what they signed up for until they are in the thick of it. I feel the same way about physician finance.
Not until you formally complete training and still have the self-control to live below your means, pay off your debts, and avoid the lifestyle creep the world expects of you can you truly understand what living like a resident feels like. It is hard. Very hard. Look, neither my wife nor I will speak ill of our incredible life. We practice in our dream location near family and raise the two most beautiful kids you could ever imagine. But no one could ever describe the realities accompanying early-career debt elimination. It sucks, plain and simple.
The Realities of Early Physician Finances
If there is one thing for you to take from this article, it is this. If you are working your hardest to start your career on the correct financial foot and carry educational debt proportional to ours, I think it should feel like this. It sucks . . . but it is also necessary if you wish to build more financial breathing room for the remainder of your medical career. I cannot tell you if it is supposed to be this difficult; maybe that is just us. Who knows? I can tell you that no one ever prepares you in medical school that one day you will be in your mid-30s and still feel like your physician income just helps you scrape by, assuming you are doing “all the right things.”
Why Is It So Hard?
So, why is it so hard? Personally, I think it is death by a thousand cuts. It is all the little things that you fail to recognize when you are grinding through medical school and residency. It is the cost of childcare, your eventual taxation bracket, the colossal debt you accrue, and how interest constantly works against you. It’s the holidays, the vacations, “planning for the future” . . . on and on and on. All these little things, both expected and unexpected, steadily chip away at your ability to make headway early on in your career.
I try to remind myself that hundreds of millions of Americans live on far less than we do. This realization works to keep me grounded—somewhat. However, it does not fully fix the fact that I have put in a decade’s worth of work after college to make an income worthy of that investment and, hopefully, a comfortable future for my family. So, why does it feel like I haven’t achieved any of this?
Does It Have to Be This Hard?
The truth is that it doesn’t have to be this hard. So much of our financial pressures are of our own devices. The math is simple. When taxes and retirement are subtracted, we take home roughly $300,000 as a dual-physician household. Then, factor in the fact that we utilize 33% of our take-home pay toward aggressive debt elimination. That leaves us with $200,000. Don’t forget about our mortgage; that’s roughly $40,000 annually. We are down to $160,000. Now, let’s subtract our W-2 employee (nanny), leaving us with $110,000.
Hold on now, we are not done yet. To locally care for a family of 4.5 (the 0.5 is a mother-in-law)—including utilities, groceries, healthcare expenses, transport/travel, gasoline, all our various forms of insurance, automobile repairs, occasional restaurant outings, children’s activities, and let’s not forget our boat (another story for another day)—we are talking another $90,000 (approximately). That leaves us with $20,000.
Of the nearly $300,000 we take home after taxes and savings, we are left with only 7%. With 7% of our take-home pay, we must find ways to cover extra or unexpected (non-emergent) expenses.
If we were not paying 33% toward our debt annually, we would have 40% discretionary income not allocated toward a fixed expense. For those not wanting to do the math, 40% of our take-home pay would be nearly $120,000. We would have $120,000 annually to do what we want when we want. This may include maxing out our children’s 529s, finally renovating our home, investing more, or traveling.
So, it doesn’t have to be this hard. We make it this hard for a reason. Why? The sooner we pay off this debt, the sooner our discretionary income goes from $20,000 to $120,000.
Given that our family is paying roughly $100,000 toward our debt annually, we will likely eliminate my wife’s debt in mid-2024. What will remain is my debt. By mid-2024, this should total nearly $200,000. I am employed through the Veterans Affairs Healthcare System, and I receive some loan reimbursem*nt through the Education Debt Reduction Program (EDRP). This is pro-rated based on my clinical FTE. As such, I will receive $150,000 in loan reimbursem*nt over five years ($30,000 annually). By this measurement, once my remaining loans reach $150,000, what remains will be reimbursed through the federal government, and I will largely see my debt as complete. In summary, my wife's debt should be gone next year, and mine should reach autopilot around that time.
We live like residents now, so we can free our income from the shackles of student debt as soon as possible.
What About Catastrophic Changes?
Those of you who have made it this far in the article may ask yourself, “Why don’t they just make some big changes and fix their finances now?” Great question. It is not for lack of consideration.
For starters, we discussed selling our home. Though we bought our home for approximately $650,000 with a fixed interest rate of 3% in 2021, some estimates say it has increased by nearly $200,000 in value. We could just sell it, pay off (almost) all our debts, and let my loan reimbursem*nt pay the rest.Or couldn’t we just sell our boat, make a quick $10,000, and stop paying nearly $4,000 in marina fees and marine gasoline each year?!
True on both accounts. We could do this. But here is our predicament: We. Are. So. Close.
We are already doing so much of what is important to us. We have already incorporated much of how we define our happiness into our lives. We live in the coastal southeast within arm’s reach of our friends and family. This is where we always wanted to settle down. We own a home that has turned out to be a phenomenal investment and that is below our budget. We are practicing at an academic institution we wanted to work for, for the state we cherish. Oh, and did I mention we are a five-minute bike ride from one of the most beautiful beaches in the world?
Yes, we could make catastrophic changes to pay our debt off faster. We could uproot our family and move to a lower-cost-of-living area away from family for the betterment of our finances. The problem is that we would actively work against what we prioritize long-term. We wanted to settle here and for our family to interact with our children regularly. Further, we wanted to stay in academics (and, honestly, to have a boat). It is our happy place. It is a shame that what we need out of life is often overshadowed by what we think we deserve.
More information here:
$320,000 and Unable to Save for Retirement
What Did I Think Life Would Be Like?
I am working toward a point here, I promise.
The truth is . . . no, I did not think this was what life would look like in my mid-30s. If I could go back in time and meet myself from medical school, I don’t think there is any multiverse where he would understand the difficulties that lie ahead. The struggles that medical school and residency will entail, the increasing prevalence of physician burnout, the looming pandemic, the debt.
I would imagine my naive younger self would assume there would be some hardships but that financial security and prosperity would be just around the corner. Unfortunately for my former self, that corner will test you and your spouse's mettle.
Our profession asks much of us—maybe too much. Aside from the clinical demands placed on our shoulders, it also (often) asks us to have financial patience. To wait just a bit longer for that life you expected you would have. These financial constraints can weigh heavy on our wallets, as well as our psyche. They can metastasize into our relationships and our lives.
One of my favorite quotes from Ted Lasso comes at a time when Ted wishes to invite a previously shamed coach to return to their team. All of Ted’s colleagues do not wish to see this individual returned, but Ted believes in forgiveness and second chances. “I hope that either all of us, or none of us, are judged by the actions of our weakest moments,” he said, “but rather the strength we show when and if we’re ever given a second chance.”
I believe all physicians deserve to experience their careers without the burden of debt. Colossal student loans have a way of making us regret our decisions and question our careers. I hope we all have the strength to overcome these financial struggles so we no longer need to practice from a place of necessity.
What I Hope Life Looks Like at 40
Now that I know the harsh realities of living like a resident and debt elimination, what do I hope my life and finances look like at 40?
For starters, I hope my debt is gone. Kaput. Fin. Zero. Zilch. Other than my mortgage payment, I want no other debts. Given our savings rate and investment strategy, I suspect we will be millionaires. That does not factor in the equity we have in our home. Strictly from investments and savings, I suspect we will be millionaires. Will we live in our forever home? I don’t know. Will I allow myself to finally get that Tesla I want . . . yeah, I don’t know about that either.
I know that I will continue to focus all my time and attention on our family. We will use our finances to reinforce these values—saving a large nest egg, building appropriate educational funds for our children, allocating enough funds to ensure our family is well-traveled, and maybe even starting to talk about retirement plans.
More information here:
From Fourth Year to the Real World: An $80,000 Wedding Causes a Downward Spiral
A Financial Love Letter to My Wife
What does all this financial rambling culminate to? Well, to be honest, it isn’t (really) for you. It is for my amazing wife. I put these thoughts on paper to rid myself of the inner turmoil I keep bottled up.A turmoil that simmers day after day as I review our finances. Am I too frugal? Do I label myself frugal but fail to practice what I preach? Am I placing too much financial pressure on my family? Am I doing everything I can to protect their future? Phew, it can be overwhelming.
Without further ado, maybe it’s best to be grateful for what you have, not what you hope to achieve, like thanking your spouse for walking this journey with you.
To my dear wife,
Thank you. Thank you for loving and supporting me all these years. Since the moment our relationship blossomed, you have supported me unconditionally. I am sorry that now, as it feels like we have reached the mountaintop, we have only discovered a higher peak left to climb. I wish I knew then what I know now. I wish I could have somehow warned you what our early careers would be like. Despite making physician incomes, we do not feel like we have “made it.” Far from it, actually.
I will not apologize for the choices we have made together. We both love our careers. Our debts are a necessary evil that allow us to achieve our dreams. However, I am sorry our dreams have yet to manifest much as we expected. I hope you know, though, I remain stoic and determined to eliminate our debt. I, too, feel the overwhelming weight of our restricted finances. Though it is our creation, I still struggle with it far more often than I wish to admit.
I hope that in just a year, we will rid ourselves of the biggest financial challenge we will ever face, but I cannot guarantee that our life will change overnight. I hope to expedite that time as soon as possible so we may decide how to best use our income to build a better and brighter future for our family.
I love you more than you will ever understand. I cling tight to the notion that our best years are ahead. I know our careers have asked us to be patient. We have exemplified this patience for over a decade now. Yet, as we celebrate the end of our training, we again must carry the torch of patience just a little further now.
Finish this fight with me. Side by side, we will best this beast as we have all the others. And our bond will only grow stronger, my dear. Thank you.
I love you.
If you ever lived like a resident, what was your experience? Did you feel like you would ever reach the mountaintop? Would you do it over again, knowing now what you didn't know then? Comment below!
[Editor's Note: The Motivated MD, is a pulmonary and critical care physician practicing in academic medicine in the southeastern United States. This article was submitted and approved according to our Guest Post Policy. We have no financial relationship.]
