Financial Lifestyle

Becoming a doctor is a long road fraught with delayed gratification. Like, I'm 25 and just now finally starting my first real job...although working 80 hrs/week for a salary that equates to $11/hr doesn't sound that good. And I won't be an attending physician until I'm 31 (i.e. better wait awhile before signing on the dotted line for that Lexus).

Nonetheless, going from -$50k annually in tuition to +$45k-ish in salary (no big secret here -- resident salaries are set by the Federal Government and more-or-less uniform nationwide) is a big swing and I've been thinking a lot about how I'm going to spend all those Benjamins.

And don't get me started on all they ways I've been mentally spending my future earnings when I'm an attending.... The AAMC quotes average Urolgist earnings to be in the ballpark of $325-425k, which will buy Barbie a lot of pink Corvettes. (Or pay off all of my student loans, which are themselves in the 6-figures.)

So, the point of this post is, I've had money on the brain lately...but, as I go from negative-earner to positive-earner to someday primary-breadwinner, I look forward to continuing to spend smart.

I want to continue to live a 'financial lifestyle' that I can be proud of.

Financial Lifestyle? By that, I don't mean a budget exactly, but rather a balance between luxury and austerity that seems reasonable.

We believe in budgeting, money planning, and living slightly below one's means, but, beyond even that, we believe in buying things that aren't RIDICULOUS.

What is ridiculous? Well, to my mind, it's things like this:


This Waterford crystal retails for, I kid you not, $79.50 per glass. I could have as much money as Bill Gates and not justify that expenditure. Wine glasses chip in the sink, people rap forks against them to make toasts, sometimes guests accidentally-on-purpose take them home after parties... All I'm saying is, if I owned this crystal, when I entertained, I'd be wearing a velvet glove on one hand and holding a whip in the other, just to keep people in line (trust me, that's not a party any sane person wants to attend).

What I'm saying is, no matter how much money we have (or don't have) someday, I want to spend in a way that feels justifiable.

Keeping Your Financial Life Organized

Matt and I have been reading this book lately. Now, David Bach is kind of a cheesy guy, but he does explain complicated financial concepts simply and present a well-reasoned approach to using the money you make to live the life you want. Plus, he is an Incredibly Encouraging writer...seriously, that guy could motivate a pig to fly.

One thing we really liked was his section on how to organize all of your money-related files. This particularly hit home because one of us (achem, Jessica) had some trouble finding last year's tax returns when we were applying for our mortgage.

The scheme involves having big files with a variety of sub-files, and goes something like this:

Tax Returns
-8 sub-folders (one for each of the last 7 years, one for the current year)
(do 7 years because that is the duration the IRS can examine when they audit you)

Retirement Accounts
-Make sub-folders for each retirement account held by you and/or your partner (IRA, 401(k), etc)

Social Security
-Keep you most recent SS Benefits Statement in here

Investment Accounts
-Make sub-folders for each and every non-retirement investment account you have

Savings & Checking Accounts
-Self-explanatory. Make sub-folders for each account.

Household Accounts
-Make sub-folders for: House Title, Home Improvements, & Home Mortgage

Credit Cards
-You got it...sub-folder for each card with monthly statements and card terms/benefits

Other Liabilities (i.e. STUDENT LOANS, car loans, etc)
-This is a doozy for us -- keep a folder with info on each loan, repayment terms, payment verification, etc

Insurance
-Make sub-folders for: Homeowners/Renters, Health, Life, Car, Disability, etc

Family Will/Trust
-Keep a copy of your most recent will in here, along with the business card of your attorney

Children's Accounts
-We don't have kids, so we felt fine about skipping this one

Financial Planning
-Ever met with a financial planner? Done home/online financial planning? Put that in here.

Matt and I work hard for our money (these days, who doesn't), and we want to be smart about how we save (and spend)...staying organized gives us the tools to make smart money decisions.

Frugal is the New Black

Money--making it, spending it, (not) saving it--is a hot topic amongst the newlywed set.

Matt and I are lucky, in that we agree on the goal of *living slightly below our means*. We don't want to deprive ourselves of the the fruits of our labors (i.e. we work hard and feel justified spending some of our money on indulgences), but we also don't want to feel stretched paying our bills at the end of the month.

We like thinking of ourselves as frugal.

Recently, John & Sherry at Young House Love posted an amazing commentary by John's dad about being frugal, in which he said: too often frugality is incorrectly viewed as “giving up,” when the real point of frugality is “getting what you really really want.” Many times I think the main point of frugality isn’t in “not buying;” the main point of frugality- and perhaps life- is to recognize what brings you the greatest rewards and to go enthusiastically for those things.

EXACTLY!

Matt and I don't mind being 'cheap' about some things (okay, many things) if that allows us to get the things we really want. Making a big purchase still hurts a little, but the sting of spending is lessened by knowing that we can afford our big purchase thanks to our savings in other areas.

[Also, please don't think that being frugal means we don't want all kinds of things--trust me, I want Everything (what can I say...I'm really susceptible to mass marketing)--but knowing what we really, really want makes it easier to say no to the things we only sort-of want.]

How Do We Do Frugality?
-I wear my natural haircolor (but you can bet I'm sure-as-heck getting highlights when I'm an attending in 6-8 years)
-We make lunches from scratch on Sunday and carry them to work every day
-We eat almost all of our meals at home, and when we do go out, we try to do brunch or lunch...it's cheaper
-Cooking vegetarian is cheap (as well as tasty)
-We work hard to eat the food we buy before it spoils (this sometimes leads to some really creative meals)
-We sell and buy on Craigslist...get money for things you no longer need / find great deals on new(to you) stuff
-We forgo DVR and also Netflix...there's plenty to entertain us on regular cable and the Internet.
-Everyone you know has a SmartPhone? Well, I have a DumbPhone...and it works fine (I just got a new-used phone [hand-me down from Matt, whose work bought him a shiny new phone], and thought I'd hit the jackpot because it has speaker-phone)
-We don't drink that much (seriously...alcohol is expensive...and contributes unfavorably to that mid-twenties spare-tire we've been trying to avoid)
-We wear our clothes for A Long Time...like, they get turned down by GoodWill

What Are We Saving For?
-New car for JLlo
-Trip to Hawaii for friends' wedding
-Trip to Hong Kong
-Redoing our kitchen and bathrooms