Are you broke, yet?

Dr. Bisutti knew that her loans were extensive but rationalized that she would be earning a lot to justify the debt load levels.  Sound familiar?

Dr. Bisutti will be 70 years old when she pays off her federal loans.  Her damaged credit prevents her from purchasing a home or new car.  It has also affected her personal life putting marriage off between her and her boyfriend because of debt.

BOTTOM LINE: DON’T BE LIKE DR. BISUTTI.  Educate yourself!

An old video from 2009 from Suze Orman.  Love her or hate her, she nailed this pending crisis  and this was back in 2009:

BUT, ONCE I’M EARNING I WILL BE MAKING PLENTY OF MONEY

Now this maybe true, but you need to learn personal finance.  Case in point, a buddy of mine, an Administrator of Orthopaedics, the first week on the job he botched Payroll.  The Staff and Doctors would miss their first paycheck by two days after the beginning of the week.  On day two he received calls not from the Staff, but rather from the significant others of the doctors yelling on the phone.  One in particular asked “How are we supposed to make our boat payment?” After hearing this story, it then dawned on me, just because they were physicians (hell, orthopods at that) did not mean they knew how to be financially fit.  These physicians were living paycheck to paycheck!  But they’re Doctors, right?  Making $200,000+….how can that be?

THE WORLD IS NOT FAIR.  LET’S LEVEL THE PLAYING FIELD

Look at your peers outside of healthcare.  Most of them are long done with their education.  Some have started their careers and are well on their way to financial freedom by paying off their student loans (if they even have them!).  As a student of healthcare you have an additional burden of debt, a shaky horizon with the frontier of medicine changing drastically, most of your youth consumed towards education to this craft, it is only reasonable that you are compensated fairly for this.  However, in order to become wealthy and set yourself up for financial successful, it requires time on your part and education to learn the building blocks of personal finance.

THE PLAN

In our last article on time management, we focused on building an ideal schedule.  We discussed how critical it was to form fixed times and stay within the boundaries of that schedule.  Recall from my first article, we must take a scientific approach to this, measuring and testing.  We will do the same for personal finance.

First we’re going to focus on how critical it is to focus on your objective and trying to develop a financial plan.  This will be broken down into three sections:

I.) Creating your Objective

II.) A Financial Plan (next article)

III.) Financial Plans in action (following article after next).  This is my gift to you the readers.  It will be well worth the wait.  Let’s just say access to actual budgets of Residents, Neurosurgeons, PAs and RNs, etc…

THE OBJECTIVE

This is your financial goal.  This can be short-term or long-term, it should depict what your household status is.  That is, if you are married, it should consider all moneys within the household.  Be specific and include time frames (You can include as many goals as you have).  Be sure to write it down in a document file on your desktop or somewhere where it is easily accessible and not lost.

Examples:

BAD: I want to pay off my student loans as soon as possible.

GOOD: I have $100,000 in student loans currently earning interest at 6.8% for 30 years. I want to cut that time in half, l would like to pay them off in 15 years.

BAD: I want about $2 million dollars total for retirement

GOOD: I want to have $2 Million dollars in retirement funds in the next 30 years.

BAD: I want to pay for my wedding

GOOD: I want to have $25,000 for a wedding in 4 years.

BAD: I want to make a down payment for a house

GOOD: I want to make a 20% down payment or $50,000 in 5 years.

WHAT’S YOUR OBJECTIVE(S)?

Again, remember the more specific and accurate the values and times, the better you can monitor your progress and make the journey more seamless.  Hold on to this and we will review this in our next article, a financial plan.