Finances behind 2 Part-Time Docs

On May 4th we got our financial life mostly in order so we could have DH (dear hubby) join me in part-time land. But none of it would have been possible had we not had Diverse Voices contributing to our decision making over the years.

 

Before I get into the finances behind this all, I want to make clear we took care of our kids’ college tuition before we made this jump. We purchased two 4 year prepaid state University plans that are super flexible: they can also pay towards private or out of state schools, should the children choose to pursue those instead. Our Fidelity credit card also continues to dump 2% back into their growing 529’s.

 

Now on to the finances behind part-time:

 

1) Educate yourself about finances, even if it’s just 5 minutes a day: I was fortunate enough to marry a money nerd. DH has studied personal finance since he was 18 and saw how much his grandparents’ financial planner was charging them. He reads about finances daily, mostly on the Bogleheads forums. DH is a genius with money. When we were still dating, he helped me get a job as a second year med student and set up a Vanguard account for me with those earnings. It was some fangled thing called a ROTH IRA.

 

2) If possible, max out every retirement avenue available: We’ve maxed out every asset-protected avenue we possibly could over the years, to the point where we have very little in non-asset protected status. As a Fellow, I took home $9 a week! DH got grief for how little my paycheck was. I apologized when the income doubled in two years.

 

3) READ THIS BOOK: We read “Your Money or Your Life’ in 2009 and immediately put our Doctor McMansion on the market—despite the real estate crash (wish Dr. Fawcett’s book Starting Your Practice Right had been available back then).   Even though we lost a lot selling that monstrosity, this was one of the best decisions ever because it freed us to leave a high state income tax/high cost of living state to move to an income tax-free state with a lower cost of living.

 

4) Live below your means: When we moved across the country, we eliminated possessions so we could pack a single POD ourselves, then lived like residents for a year. The following year we upgraded our apartment and continued to rent for nearly 3 more years (don’t underestimate the cost savings associated with renting at certain life stages).

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I cut DH’s and my sons’ hair. I had to ask one of my neighbors, a hairdresser, to teach me how to cut curly hair.

5) Pay off your debt: We obtained our M.D.’s from a State University. And we’ve paid off all our debt except one loan. DH’s remaining student loan is at a fixed 1.75% interest rate. Not knowing what this next stage of life will hold, we’ve shored up our emergency fund—our best guess is this new life stage will result in a 3/4 pay cut. We are in the process of figuring out the timing of paying off DH’s loan. DH wants to pay it ASAP after reading Dr. Fawcett’s book on Eliminating Debt.

 

6) Kill the commuting costs: We live less than a mile away from our kids’ school (Pre-K through 12th grade!) in a middle-class neighborhood. Though it seems physicians are starting to take over this area—maybe that’s why housing prices have sky rocketed here. (We live in a little tucked away community close to a major hospital that people only find out about by word of mouth.)

 

7) Drive paid-off cars: Our cars are “older” now, but I don’t care. After driving 20+ year old cars as a youngster, I think our current cars are amazing. They start when I turn the key! I don’t have to climb under any of our cars to bang a starter with a hammer or pop any clutches to get them started. That’s some serious winning in my book.

 

8) Tend to your marriage: Divorce is a nuclear bomb to finances. I can tell you with a high degree of certainty we would be divorced right now had I continued to work full time after fellowship. There’s only so many hours in a day, and something has to give—especially when you’re a Type A like me who can’t let loose the reins of running a household. (Hats off to the women who work full time, are patient with childcare/personal assitant options, and still maintain a healthy marriage—I can’t.)

 

9) Track your spending: I started to track our expenses again after a five year hiatus. This reined in our spending that had gotten out of control while I hadn’t been paying attention. Without this action, DH would still be working full time.

 

10) You’ll Be More Content Living Below Your Means if you Keep a Gratitude Journal: Last but not least, we’ve been blessed—beyond blessed. We were able to become physicians. We haven’t suffered from racial prejudices to find jobs. DH was a partner in a business for a while. We live in a state with no income taxes and a prepaid tuition plan option. I could go on, but you get the picture.

 

Slowly, DH and I are transforming our lives to fit our current priorities. And how do we live the best life we possibly can? By first taking control of our finances—only then can we command an even more precious resource: our time.

 

Next week there will be a guest post for you from DH on why FLOWERS are one of your best investments. Hope you return to read his post. In the meantime, this post goes out to you while I fly back across the Atlantic from a fantastic visit with my awesome Sister (an RN-I’m always so proud of her! Happy Nurse’s week!). I have missed my men folk terribly and can’t wait to get home, but first, I’m wondering: how are you taking steps to control your time better?

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    11 Responses

    1. Glad to see you have taken the bull by the horns and decided to move into the world of financial bliss. When you have your finances under control, life is a whole lot nicer. Thanks for the nice things you have said about my books. I’m glad they were helpful in transforming your financial life.

      Dr. Cory S. Fawcett
      Prescription for Financial Success

    2. bckrygowski says:

      Your books are VERY timely and needed in our community—thanks for taking the time to write them! 🙂

    3. AC says:

      I still remember being blown away when I visited you at your McMansion, and your DH took the book Your Money or Your LIfe off your bookshelf and brought it to me, with a lot of of huge thank you’s. My book (I had actually labeled it with my name inside) somehow had gotten lost and ended up in your place! Mystery solved! Not surprising, with the amount of stuff that moves back and forth between our clan’s members! I was amazed that he had actually read it and it helped move you along on your way to FI! It has been fun seeing the metamorphosis through the years….looking forward to more…you may be surprised ha ha! AC

      • bckrygowski says:

        lol….I am sure we will be surprised! There is a lot of change going on right now with us adjusting to his new schedule. It’s great to have him well rested again!

    4. Nathan says:

      Hi this is an awesome article! I’m curious about states you mentioned that were income tax-free with lower cost of living (any examples would be great) and what is was like after you moved initially? Was it challenging and how have you been able to maintain relationships with good friends and family that don’t live close by?

      • bckrygowski says:

        Hi Nathan, Thanks for stopping by! The answer to these questions is definitely a blog I want to write in the near future as these questions often crop up on the closed doctor FB groups. The short answers: Florida is tax free, so is Texas. Texas is very doctor friendly and they seem to pay the doctors more (at least when I talk to my peers in Texas about their salaries). Initially it was a shock after we moved as I stayed at home (I was pregnant) and we knew only two people in the new city. However, within six months my brother moved here and soon thereafter my in laws started to snow bird here. Odd how it all happened actually. Finding friends was a challenge because of the stage of life we were in, but it’s gotten a lot better since then. I maintain relationships with family/friends that I no longer live near via FB, emails, and visits. Good questions. Keep on asking—I can already tell by your site that you’ll go far!

    5. Crispy Doc says:

      BC,

      This post is a wake-up call to docs everywhere that despite a two physician debt load, a doctor house, and a lot of common mistakes (and I say this with nothing but empathy; I’m still in the slow process of reversing some of mine) you can still realign your life to your priorities.

      I wish you and your husband success in this new stage of life, with time to contemplate and appreciate the good fortune that your radical changes have brought about.

      Fondly,

      CD

      • bckrygowski says:

        CD, Thanks for stopping by and your comment. This new stage has been an adjustment! But a very good one at that! 🙂 BC

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