Sitting at home in quarantine, this resident (finally) decided to get his finances in order.Lazy wasn’t a word to describe most of my life, but when it came to me and my money, it would have been a kind descriptor. I was the guy who would occasionally glance at my bank statement, just to make sure I had a similar amount of money compared to the last time I checked. Personal finance? Meh, I always thought that I would get to it… just later. Well, for me, later came in the form of a residency-program-imposed quarantine during a global pandemic. I provide that background to stress that this post couldn’t seriously be viewed as a boasting session. I was nearly 30-years-old and I still hadn’t taken the reigns on my finances. [Thank goodness I was too lazy to sign up for a credit card!]
How did this lazy resident start to take charge of his personal finances?Well, it started with educational podcasts. Psshhh, like I would actually read a great book about personal finance. Way too much effort. But after listening to a few podcast episodes, I found that money could be a pretty interesting topic. I started to learn more of the lingo, like assets vs. liabilities, index funds, and the holy grail of financial independence. With my interest piqued, I decided to read a blog post or two.
This evolved into my devouring all-things physician personal finance.And I was finally ready to take action.
What do we consider money well spent?My wife and I started by asking ourselves, “What do we consider money well spent?” After some socially distanced soul searching, we were able to assemble a shortlist of core spending values in our marriage:
1. Spending time together.We realized that – whether we spend money on a dinner date or a movie night – we are ultimately aiming for more quality time together. But this doesn’t actually require us to drop Benjamin$ left and right. If we just take an extra second to think about spending time together in a cost-conscious manner, we can come up with plenty of ways that are friendly to our bottom line.
2. Feeling healthy.Now that we are no longer able to go to the gym, we’re finding other ways to keep ourselves healthy. For example, we are each getting 8 hours of sleep and we now have the opportunity to walk our dog on his favorite trail multiple times per day, letting him enjoy all the smells that we are deprived of by our facemasks. (See one of his best hair days in the photo below.) Again, this a value that relates to money, but we don’t necessarily need to go spending outside of our means to fulfill it.
3. Eating delicious food.This is admittedly a hedonistic ‘spending value’, but you’ve got to be honest with yourself. We both value delicious food and are willing to spend money on it. But the food doesn’t necessarily need to be expensive. Nor does it have to be from a restaurant. We just want it to be delicious. So, with the extra time that is now available to us, we started to cook more meals together with inexpensive ingredients that are both healthy and delicious. We get to enjoy these dishes together for a fraction of the price per bite.
4. Caring for loved ones.With social distancing, this basically comes down to increased communication with our loved ones. But thanks to the wonders of modern tech, this is easier and cheaper than ever before. We have probably spent more time on video chat in the last two months than in the last two years combined. These days, our family members no longer want us to buy them stuff, they want to enjoy more time and experiences with us.
Other Financial Lessons Learned During QuarantineOthers before us have recognized that – when money is well spent – it has less to do with the total dollar amount than how tightly correlated the spending is with your values. During quarantine, it was our turn to learn this lesson along with the other axioms of personal finance:
Earn more. Spend less. Build wealth with the difference.As a lazy resident, I’m not really going to be earning more. Sure, I could participate in paid medical surveys or become an Instacart driver, but this lazy bum isn’t looking to do more work than is absolutely necessary. So, I had to table that idea for later.
Instead, we learned how to spend less. Here are a few examples of what we did:
- For groceries, we decided on a maximal dollar amount that we were allowed to spend each month and we stuck to it, similar to the cash envelope system. This was huge for us.
- For entertainment, we canceled a streaming service. A small but significant step in the right direction. Plus, it gave me more time to do things like writing this blog post.
- For travel, we aren’t planning any big/expensive trips for the foreseeable future. We also moved to a new apartment in February, so I’m able to walk to the hospital now and my wife has a shorter commute too. Savings on gas and car maintenance will free up plenty of space in our budget.
- Beyond each of these concrete steps, we simply became more aware of our spending habits, which has drastically cut down on impulse purchasing. Supporting this behavioral change, we got an account at Mintto track our expenses, which helps us to stay within the guardrails of our budget.