Effective Ways a Physician Can Save Money on Everyday Expenses
Malpractice insurance, licensing renewals, re-credentialing… the list of costs associated with being a physician often seems neverending — and expensive.
While you may not be able to stop the rising cost of insurance rates or avoid your state licensing requirements, saving money on some parts of everyday spending makes budgeting more manageable. In this guided article, we’ll share the most effective ways doctors have cushioned their incomes by minimizing daily expenses.
1. Pay Off Bad Debt
One of the first things financial advisors who focus on investing for physicians, like OJM Group, caution new investors about is paying off interest-bearing debt. These expenses, which fall under the “bad debt” category, include unnecessary car debt (do you really need a new luxury car every year?), unsecured personal loans with daily or high interest rates, and high APR credit cards.
Some financial experts suggest it’s not a horrible idea to have low-interest credit cards for your daily business or personal expenses as long as you pay them off monthly and keep them under control. Using credit cards for your gas or office supplies helps you accumulate perks. But letting your credit card debt rollover adds interest and becomes an expensive bill that takes years to pay off.
Take a few minutes to look at your credit cards and other bad debt bills. How can you get them off your list of expenses quickly? For some of these debts, it could be enough to add a few dollars to your minimum monthly payment. For others, consider taking out a 0% credit card or refinancing to help you pay them off faster.
2. Automate Where Possible
Creditors love to avoid the hassle of sending bills and waiting for payments. Many companies offer discounts on monthly expenses to encourage their customers to automate. Check with your utility and insurance companies to ask if they have any perks for users who automate their payments.
Even if they don’t offer discounts, automating can prevent you from forgetting to pay a bill and incurring late fees.
Automating your savings is another smart way to work toward financial independence. If you’re paid through direct deposit, have a percentage or set amount of that income automatically deposited into your savings account, and you won’t miss it. Some banks offer round-up plans that “round” your debit spending up to the next dollar and transfer it into the savings account connected to your debit card.
3. Set a Budget
You’re a responsible, professional adult who worked hard to get to your current income level. Do you really need to stick to a budget?
Well, if you want to enjoy the fruits of your labor in a more effective and valuable way, yes.
Budgeting is a financial skill that teaches you critical skills that keep more of your money where it belongs — in your pocket. More than just saving money, though, budgeting helps you recognize what expenses are important and which ones aren’t.
When you dig into the nitty gritty of where your money is going, you might get an eye-opening result. Take about half an hour to print out the last three bank statements from your checking account and your frequently used credit cards. Then, highlight each expense with different colors to denote separate categories. For instance, housing costs could be yellow, entertainment blue, and dining out pink.
Once each expense is colored, add up the categories. Where is your money going? If any category is higher than expected, look at what’s making up that expense.
Use this budgeting tool to recognize where you need to save on everyday expenses. It might be cheaper to invest in a high-quality espresso maker instead of going for your daily coffee run, or you might be able to cancel some subscriptions you don’t use and invest those funds instead.
Conclusion
Finding ways to save money is a goal for most of us, but for physicians, it can get overlooked with the higher influx of expenses. When you know where your money is going, though, you can use every pound or dollar wisely to create a more stable financial future.
With these three tips, you’ll be on the right path to putting most of your income into places where it’s best for you: investing, paying off bills, and living the quality of life you’ve worked so hard for.