Some people go through a lot just to save $20. Others are willing to drop a few hundred bucks just to make life easier. The strategy in the financial game is actually to maximize your earnings with appropriate effort while judiciously managing expenses. There are some people who are willing to spend 30 minutes a year haggling with their internet company to reduce the bill to save $200. That’s a post-tax return of $400 an hour, which is a rate that would be difficult to match elsewhere. One would be foolhardy not to go for it, right? For some of us, that rate isn’t worth the induced hypertension going through an endless phone tree and dealing with a salesperson whose dialogue matches that of your most difficult (read: annoying) patient.
Is a $200 savings worth 30 minutes of effort, a twenty millimeters of mercury rise in your systolic blood pressure, and potentially an 8% increased risk of a myocardial infarction in ten years? This is a savings dilemma indeed.
An example involving an earnings dilemma includes deciding whether to pack your family up to the Yukon to become the territory’s only cardiologist? (Apologies to those living in the Yukon or if the aforementioned statement cannot be verified). A mid-seven-figure annual earnings would be guaranteed, but you’d be running the cath, EP, and diagnostics labs too. Don’t forget that you will be at the same latitude as Siberia. Oh, by the way, you will get run over by some elk at year five of your stint. Be sure to resign before then if you expect to live beyond that.
All morbid points aside, the earning and spending journey has obstacles, some expected, some not.
Some of the potential financial hiccups that doctors encounter include:
- Not making partnership in a practice, resulting in job hunting with relocation.
- Anesthesia group losing the hospital contract and dissolving.
- Child turns out to have some chronic medical illnesses that will blow your medical bills out of the water.
Combined household and family emergency
Case in point: Let’s take a look at how easily one can burn through a good deal of money in a short amount of time, all without trying.
Thursday, 5:47am: There is no more hot water in the house. Maybe only one component to the heater stopped working, but you can’t be bothered—it’s a big operating room day today. Plumber bill: $1300
Friday, 2:22am: You get a call that your family member across the country is deathly ill. Your PA will see your postops, and you buy a one-way cross-country ticket. Airfare: $900.
Saturday, 7:30am: Morning joe with muffin: $8
Saturday, 11:20am: Hospital lunch: $18
Saturday, 2:12pm: Afternoon espresso: $4
Sunday, 12:18am: Family member expires.
Sunday, 03:10am: Order a casket from Costco: $1088
Sunday, 9:00am: Hospital breakfast: $13
Sunday, 11:20am: Cab to airport. $66
Sunday, 2:00pm: Flight back home, purchased one-way: $859.
Total damage: $4243
You cannot avoid the unavoidable
Fortunately most doctors aren’t going to go broke with an emergency expense. The amount spent in this example might consume a paycheck or two (much less for some too). The principle, however, is that one cannot predict whether these situations will happen. These jabs to the wallet hurt, but they will hurt more if you didn’t have control of your finances beforehand. Sometimes if you run into a string of these unexpected events, they can start stinging.
So take control of your finances. Don’t allow these unexpected events take over your life. If this means making that call to your Internet provider annual plus other money hacks, so be it. If it means taking a few additional shifts in the ER, not getting that Maserati, or just acknowledging that your food will taste just fine without a kitchen renovation, so be it.