medical student loan refinancing

[Editor’s Note: This is a guest post written by Jason Cabler.  Jason is a Dentist, Christian personal finance blogger, speaker, and owner of Celebrating Financial Freedom.  He teaches people how to become debt free and live a debt free life through his blog, book, and Celebrating Financial Freedom self study course. We have no financial relationship.]

I met The White Coat Investor recently at FinCon 13 (The Financial Bloggers Conference).  One of the subjects that came up as we were getting to know each other was the question of why aren’t doctors, dentists, and other white coat professionals any better than the average Joe at handling their money?  Who knows, we may be worse!  As highly paid professionals there is typically more room for error financially, so it can be much easier to ignore the basics that make for a sound financial situation.

Making a Budget Is Like Documenting a Patient’s Chart

Jason Cabler, dentist and blogger

Dr. Jason Cabler

One of the financial basics that tends to be ignored the most is the act of doing a family budget.  No, I’m not talking about that general idea in your head about how much you spend every month on certain items.  I’m also not talking about the list of bills you pay every month.  These are not budgets.  A budget is a detailed plan for directing how your money will be used.

As professionals, it’s our duty to document everything we know about our patients.  It helps us to treat them to the best of our ability, as well as keeping us out of trouble if the documentation is done well.  If we handle our charts the same way we tend to handle our budgets, we’d be in trouble very quickly!

A Budget Will Save You A TON of Money

The point is to document your income and outgo much the same as you would document things in your professional life.  This means you should be putting together a monthly zero based budget for your money.  Not an idea, not a short list, but a detailed budget that spends every dollar on paper before it’s spent in reality.  Why do you need to do that?  Because it’s too easy to spend more than you make without realizing it’s happening.  Most Americans, including us white coat types, spend more than we make because we don’t take the simple step of keeping close track of our money.  It’s not that hard, but when you make it a habit, it will literally save you tens to hundreds of thousands of dollars over your lifetime!

Establish a Simple Habit First

I believe the best way to get started with budgeting is to first establish the habit of writing everything down for 30 days.  Every time you spend any money, document it.  Write it down in a small notebook you carry in your pocket, or in the note taking app in your phone or tablet.  Once you’ve done that for 30 days you’ll have enough information to take the next step- filling out a monthly budget.  You can do that using these downloadable forms.

I prefer to write my budget out on paper, but if you prefer, you can set it up on your computer in an excel spreadsheet or use any number of budgeting apps, software, or websites that will allow you to put together a zero based budget.  All you have to do is fill out the forms and make sure that income minus outgo equals zero.  It’s really that easy… sort of.  It might be a little hard at first to tweak things and get everything to fit, because you might need to cut back in some areas.

You Won’t Get It Perfect The First Time

We docs tend to be perfectionists, so I’ll warn you now- you may not get it perfect the first few times you do it.  That’s OK, it’s not the MCAT, it’s just a budget.  Once you get used to doing it, it gets much easier and becomes automatic.

[Editor’s Note:  Budgeting resources from Jason include his budgeting forms, these posts on his website:

and his book, How to Budget- The Quick and Easy Guide to Making a Budget That Works.  It’s only 99 cents, but if you buy it through this link, I get 6 pennies.  Feel free to do your Christmas shopping while you’re there.]

What do you think?  Do you budget?  How did you design yours?  Do you use a zero-based budget?  Do you think highly-paid professionals need a budget?  Comment below!