I'm Financially Strapped -- on $175,000 a Year!

Dennis Murray, MA

Disclosures

May 01, 2014

In This Article

Expenses to Watch Out For

According to Stepp, some "nonlegitimate" expenses that you should examine more closely include the following.

"Can't Miss" Investments

Because they're high-earners, physicians often get approached to invest in a hot stock or in a side business. But often these investment "opportunities" miss -- and miss badly. "Unfortunately, doctors are prime targets of unscrupulous salespeople, because they have a reputation for not understanding the business side of things," says Stepp.

Al Zdenek, too, has seen physicians get burned on these "inside" deals a number of times. "Doctors are very bright people," he says, "but they often don't take the time to fully understand and monitor the investment, or ask themselves how it fits into their overall financial plan." (For more, see Doctors' 5 Most Common Financial Blunders.)

Too Much Focus on Status Symbols?

Do you need to be driving a new luxury car every few years, when a well-maintained preowned car will do? Are you an empty-nester living in a house with space you no longer need? Do your kids really have to attend exclusive private schools? These are all questions that have the potential to save you some serious coin, which you can then redirect to pay down debt or fund your retirement.

Expensive Trips and Meals Add Up

The burnout we spoke about earlier -- a real concern for physicians -- is often soothed with pricey vacations and frequent dinners out. But before you hop in the car next time, ask yourself whether you couldn't cook more meals at home and limit the number of restaurant splurges. Apply the same restraint to vacations as well: Wouldn't a long weekend at a resort you can drive to restore you as fully as a trip to Europe?

"We could be watching our discretionary spending a lot more closely," confesses Eric Friskel, a 46-year-old pulmonary medicine/critical care specialist in Mission Hills, Kansas. "Our family of 5 eats out a lot, and we take 2 or 3 really nice vacations a year. We tend to go to high-end places and spend about $10,000 per trip. Our friends with kids travel for half that amount or less, and I'm sure we could too." And because neither partner cooks, he says, the tab for take-out and restaurant meals can easily run $400 or more a week.

Playing Banker to Other Family Members

Your status as a physician may get others to thinking that they can borrow money from you and not pay it back. That includes your adult children, who may slowly and methodically drain you of income that could be better allocated to your own debt and retirement savings. If you're inclined to loan money to someone, either put it in writing and include a modest rate of interest, or do it from the goodness of your heart with no expectation of the loan ever being repaid (which is an all-too-typical outcome).

Comments

3090D553-9492-4563-8681-AD288FA52ACE
Comments on Medscape are moderated and should be professional in tone and on topic. You must declare any conflicts of interest related to your comments and responses. Please see our Commenting Guide for further information. We reserve the right to remove posts at our sole discretion.
Post as:

processing....