Budgeting tips for families – frugal doctor’s wife perspective.
It turns out that to maintain my day job , which is our source of income for now, i have to pass my critical care board exam.
My wife, otherwise known as Mrs. Breathe Easy Finance or Breathe Easy Mamma (we haven’t solidified the name yet- work in progress) has decided to take over the blog for the next few weeks.
I promised not to change her voice on whatever she writes. Here, she gives insight into some of our family dynamics and how I became the no fun finance husband. She is on board now, so I am beyond excited.
In this post, she is coming from the perspective of a physician wife, I am sure most of the tips can be applied to either sex.To the financial bloggers out there, what better way to get your spouse on board than for them to write a blog post. I am hoping this would be a long term gig.
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Table of Contents
For years I waited, in agony at times for July 1, 2018. It was the date my husband would finish his fellowship. The date, the skies would open and money was going to pour down on us. I had hoped to live in a mansion and have several luxury vehicles.
However, with being married to Dr. Breathe Easy, things didn’t quite work out that way. With each year that passed, he became more entrenched in the world of finance. He preached financial independence, to just about anyone who would listen.
If you weren’t listening, that definitely did not stop him. He would go on these rants about investing, using terminologies that literally sounded like a foreign language. The more he talked about investing, the more I talked about spending.
I was resistant to setting a family budget and was turned off by the idea of renting, instead of buying a house. He would quote excerpts from financial gurus, such as Dave Ramsey. A typical conversation over dinner was discussing, the latest blog or hot topic on White Coat Investor.
I finally conceded, when he convinced me that we could secure a future for our girls if we made sacrifices and practiced financial discipline. For their sake, I was ready to live like a resident.
I’m not a financial “anything”. I’m a former bedside nurse, coming up on my first year anniversary as a stay-at-home-mom.
I have however experienced the journey of family budgeting during residency and fellowship. There are some basic essentials to family budgeting, especially for those who would like to live below their means.
Our personal goal is to live like a resident for at least the next 2 yrs, to supersize our savings/investment and paying off residual debt. More writing on that below.
12 toddler steps to financial freedom
Roth IRA trick to becoming a millionaire
Pretax VS after-tax calculations
Pay off debt
In anticipation of having our second daughter and becoming a stay-at-home mom, we focused on paying off debt.
Paying off debt, in my opinion, is the single most important factor for increasing cash for the family budget. Disclaimer: Dr. Breathe Easy may not agree! I say this because; in my husband’s final year of fellowship, we aggressively paid off my outstanding student loans and car loan.
Without the burdens of these monthly payments, cash flow increased. I was a stress free Mama, with more cash. Yup! Happy wife happy life! It was exciting to have more cash, but we decided to use it to pay more debt.
Budgeting methods
Using an excel spreadsheet or a budgeting app is the ideal method for successfully budgeting. There are countless user-friendly apps. We have tried Mint, and several others. Truthfully, none of them really worked for me. I prefer the “reverse budgeting” method. We get paid, we take out the money allocated for saving/investments and strategically use the remaining funds for rent, utilities, food, entertainment and miscellaneous. I keep tabs on our accounts and take mental notes of our transactions.
Food budgeting
Food is one of the largest parts of our family budget. Dr. BEF, is pretty relaxed on spending and budgeting, when it comes to food.
We both agree that the quality of food takes precedent over spending a few extra dollars. When we were in our 20s we ate unhealthy and our grocery bill was much cheaper. “You are what you eat.”
Eating healthy will cost more than junk or processed foods and we are ok with that. We love to feed our kids fresh fruits and vegetables, which aren’t cheap.
We minimize spending in other areas, such as cutting back on dining out, to compensate for a high grocery bill. We also stretch our money by eating leftovers.
Date nights on a budget
We try to do at least one date per month. Dates do not have to be at a 5 star upscale restaurant. When you’re living like a resident, you get creative.
We grab a drink at Starbucks, play mini golf or just go on a walk for free. We glance at our budget(account), to determine what we can afford.
There are those occasions that require, a special celebration, but date night can cost $20 or less. You do not have to literally eat up the budget! Be realistic, save and then spend.
Entertainment budgeting
UNSUBSCRIBE! Gone are the days when you can just pay for the service you want. Every product/service now requires you to subscribe.
We all sign up for those 30 day free trials, where we miss the deadline to unsubscribe and end up getting charged for the full service. Just stay clear of subscriptions.
You can only justify a subscription to Netflix and Sling, if you are using it to replace cable, which is ridiculously expensive.
Rent vs Buy – the ultimate debate
This is a touchy subject, and by far the most difficult to convince women/doctors’ wives in general. I’m in a particular group, with the wives of residents, fellows and early attendings. The question of rent or buy is asked daily. It’s usually posed by a wife whose husband is completing his program. I’m not sure where the impression that buying a house is some sort of a requirement after training came from, but it’s a phenomenon. I ask the same questions, that DBE and I discussed when we were contemplating purchasing a house. The most important question being, are you financially ready for a house? If you are debt free, you have 20% percent down payment and an emergency fund. Congratulations! You’re ready to be a home owner! If not, stand down. Pay off some debt and save, it’s a simple formula. I still send my husband pictures of beautiful houses with the sad emoji. I often make snarky comments when we visit the homes of his colleagues. Owning a home is a short term goal of ours, which we are working towards. However, we just aren’t desperate enough to add a hefty mortgage to my husband’s student loans. For more information on what needs to be in place before buying a house, see below.
Reasons not to buy a house
For now, I’m satisfied with seeing our debt shrink and our net worth increase.
Please let us know what you think. Is this series a good break from my version.
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Adebayo
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I am a pulmonary and critical care doctor by day and personal finance blogger/debt slaying ninja by night.
After paying off close to $300,000 in student loan debt in less than 6 months into my real job, I started on a mission to help others achieve the same. There is no magic to this than to strap up and get it done. Some of the ways we achieved this include side hustle, budgeting, great negotiation skills, and geographical arbitrage.
When I was growing up, common knowledge in Nigeria is that there is one thing you cannot trust anyone else with, and you guessed it – your money.
Being frugal came easily to me based on my background. However, the concept of building wealth did not solidify in my mind until when I finished medical school. I wish I knew what I know now when I was 14. Still, I don’t know enough and I am constantly learning to improve my knowledge.
My goal is to reduce financial illiteracy among young professionals. I am catering to the beginners – babies and toddlers in financial literacy.
