Physician Disability: Why Every Physician Needs a Budget
As a rule including the word “budget” in an article, let alone the first sentence of an article, is a recipe for disaster. Few people enjoy even the thought of budgeting; fewer still actually do it. And that’s a shame. Just as making it through the rigors of medical school requires a plan of action; a process to ensure the myriad of responsibilities required for success are addressed, so too does attaining financial freedom. Developing and adhering to a budget is crucial to reaching your fiscal objectives.
The first step in developing a successful budget is taking the time to honestly evaluate a few critical factors. First among these is an accounting of income sources. How much are you currently earning right now? Not necessarily what’s expected in the future, but today. Trying to develop a successful budget based on future earnings is akin to taking one step forward and two steps back. Deal with the here and now, your budget can and should
change as your situation does.
Now stop and consider where your funds are currently going. Naturally this will include expenses such as housing, utilities, food, loan obligations and other essentials, and those should be part of the budgeting process. But don’t stop there. For example, do you make daily stops at the coffee shop? If so, how much do you generally spend? Clothing, dining out and other incidentals also need to be accounted for. And don’t be surprised with what you learn.
Invariably the development of a budget uncovers surprising revelations in regards to spending habits. Who would have thought nearly $100 a month went to lattes or caramel macchiatos?
As alluded to earlier budgets, like most everything else in life, will change and should be consistently monitored and updated. Earnings will (hopefully) improve, new and sometimes more daunting expenses will arise because of marriages, children, purchasing a home, the need for retirement savings and other life changes. Regardless of all the new and exciting transformations that occur, succeeding financially will still require developing and adhering to a comprehensive, well-conceived budget.
Every bit as important as the first, crucial step of beginning the budgeting process is to actually stick to it! Sounds elementary, and it is. But we’re all human and even those with the best of intentions can let things slip. No matter how complete and well thought out a budget is, implementing and staying within the parameters of it is the only means of improving your chances for financial freedom.