[Editor's Note: The following guest post was submitted by regular WCI reader and physician spouse, Ryan Trettevik. I think it is awesome to have a non-physician spouse taking the primary role in finances (although it should always be a joint responsibility) simply because they often have more time to do so compared to the high-income professional spouse. It isn't the way it is in our house, at least not since residency, but in many ways it is ideal. Ryan and I have no financial relationship.]
WCI had a blog post last spring answering a reader’s question about a financial plan for their spouse in case they died. The comments on that blog largely painted the picture of extremely uninformed and incapable wives that would screw everything up if the finances were left to them. Here are the words of a few readers: “…the thought of what she’d do if I pass away tomorrow is a top reason I’m not 100% self-managed,” “she has no interest in finances whatsoever so I’m trying to leave explicit instructions,” “the thought of dealing with money gives her chest pain and palpitations.” While these comments are in no way a representative sample of who manages the finances in couples where one spouse is a physician, they made me realize that a large portion of the information on the WCI blog, in the comments, and on the forum comes from the physician who is also the one handling the finances. As a wife of a physician, and as the one that handles our finances, I wanted to offer a different perspective. Below I highlight four main benefits of placing the bulk of the financial work in the non-physician spouse’s hands and outline how this has worked for us during my husband’s residency training.
4 Main Benefits of the Non-Physician Spouse Handling the Finances
#1 Time
A lack of time often seems to be an excuse for physicians to outsource the management of their finances at a hefty cost. Many non-physician spouses may have just as demanding, or more demanding schedules than their physician partners, but many do not. While my husband was working ridiculous hours during his surgical intern year, I was writing a dissertation, working part-time, and training for a 200-mile trail run. I still had more time than he did and definitely had more interest in making nerdy spreadsheets about our financial options. I could boil down the information I had learned from reading books, blogs, etc. to small soundbites to keep him up to speed on the decisions we needed to make and financial moves we needed to implement.
Ryan and her husband taking a break at mile 190 of that 200-mile race. They prefer discussing finances while running in the mountains.
#2 Removed from “Doctor Culture”
Another pitfall that is commonly cited in physician finance is the desire to keep up with colleagues in terms of lifestyle. The non-physician spouse is farther removed from this detrimental “doctor culture” and may be able to steer the couple’s financial decisions away from new cars, oversized homes, and other expensive purchases. Many people are able to block out this race to keep up with their peers, but for others, it might be easier to have the spouse that doesn’t see all the nice cars in the hospital parking lot driving the financial decisions. [I love this one-ed]
#3 Efficient Contribution to Family’s Wealth
For many one physician couples, the physician’s earning potential is much higher than the non-physician’s earning potential. In this case, managing the family’s finances is a way for the spouse with a lower earning potential to contribute to the family’s wealth. The amount of money we will save over the course of my husband’s career by not paying others to manage our finances and (assuming we get things mostly right) avoiding large financial mistakes likely outweighs my earning potential as a sociologist. I contribute to our family’s wealth by staying home with our son and working part-time from home, but it’s nice to know that I am contributing to our financial health in another (likely larger) way as well.
#4 Ability to Contribute to Physician Career Decisions
Physician career decisions are not all about money (at least not in our family), but if the non-physician spouse is informed regarding the family finances, they can better contribute to discussions surrounding career decisions. For example, when my husband was debating between a year of fellowship following residency, I was able to throw together a spreadsheet to show what the financial implications of that fellowship would be in terms of lost income, loan repayment issues, etc. In my quest to educate myself regarding physician finances I’ve also read books about physician contracts and learned about issues in private practice vs. academics that help me be a better sounding board as my husband wrestles with employment decisions.
How Has This Worked Out So Far For Us?
Almost four years later, my husband is nearing the end of his anesthesia residency and we have an investing statement, we maxed out each of our individual IRAs and his 403(b) each year of residency. We have a will (that we still need to get finalized), as well as additional disability and life insurance that we are confident will cover our family should the unexpected happen. We were enrolled in PSLF before receiving a generous early inheritance from a family member that we put towards my husband’s student loans. That left us with only one student loan remaining (which is interest-free during training) that we will pay off at the conclusion of fellowship year. My husband’s non-ACGME fellowship salary will be higher, so we have an aggressive plan this year to max out his 457b in addition to his 403(b), our individual IRAs, and an individual 401k for me (I have 1099 income for the work I currently do from home). We also plan to continue to contribute to the 529 we set up for our first child, start another after the arrival of our second child, and begin saving for a down payment.
We’ve managed to save during residency by keeping our monthly living costs low and “budgeting” in a loose sense. Had I not stumbled on the WCI blog, we wouldn’t have known about the various retirement account options or the need for additional disability and life insurance. Besides the cost of books, we haven’t paid a dime for financial advice. (Thank you WCI!)
We still have plenty to learn and have certainly made mistakes along the way. Looking back, our biggest mistake was enrolling in PSLF and not refinancing his student loans immediately. It seems stupid now, but we didn’t realize that anesthesiologists working in a hospital are often working for a group that isn’t a non-profit even if the hospital is. That made our prediction of him working for a non-profit way off. In addition to that miscalculation, we certainly didn’t predict that an early inheritance lump sum of money would be coming our way that we could put towards loans. Finances would be so much easier if you could predict the future and had all the knowledge from the start. We’re continually working on the education side of things so that future “mistakes” aren’t due to our lack of knowledge.
Making Financial Decisions Together
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Ideally, both partners in a marriage will understand the basics of finance even if one is doing more of the implementing and educating. After listening to me summarize enough blog posts, my husband now reads the WCI blog, we jointly put together our investing statement, and we review our spending, goals, and plans together a couple times a year. This post is meant to highlight the benefits of the non-physician spouse managing the finances and encourage those that may be hesitant to do so. You don’t have to be the physician to educate yourself about physician finances and put a plan in place. I’ll leave you with a couple other sources of encouragement for those physician spouses out there: PoF recently linked to a post by DocWife. I hadn’t seen her blog before, but it’s another perspective from the physician’s spouse handling the finances. Also, it’s an older post, but if you haven’t seen WCI's wife's perspective that is a good example of how a couple benefits from working together on their finances.
What do you think? Who handles the finances in your family? Do you think financial goals would be reached quicker if the non-physician spouse was primarily responsible for the finances? Comment below!
This is a great post. I am going to send it to my wife, in fact.
I’ve always thought about this as shared responsibilities. I take care of the big picture stuff (making sure we are saving enough, and paying off enough towards loans) while my wife takes care of the conrete tasks (filing the 401k paperwork, paying the bills, helping me budget).
It would probably be a better idea for us to both be on the same page with the big picture stuff, too. That way she would know what to do if I died. Given that personal finances are such a passion of mine, she has always trusted me to take care of most of it.
Thanks for the encouragement to have this important conversation.
P.s. which fellowship did he do? I am a regional anesthesiologist.
TPP
I’m glad this post encouraged you to make sure your wife also knows the big picture stuff with your finances! He’s doing a regional fellowship. You know more than we do at this point since he’s only a couple weeks in, but so far it seems like it was a good decision.
Even though I am currently single I am totally on board with keeping your partner in on financial decisions to prevent one person knowing it all and the other left clueless if something happens to the first person.
It is an older post here on wci but I also just did a post on my blog about the importance of an investment policy statement. Just that simple act of writing down your investing philosophy as well as a record of all your financial holdings makes a transition from one person to the other a lot easier in case something does happen to the main financial person.
I may disagree some with the non physician spouse keeping lifestyle inflation in check (if you do have one you are extremely lucky) but from my experience the wives of physicians are the ones that are the cause of expensive lifestyles more than the male physician colleagues I know. I know some that work paycheck to paycheck to support the doctor wife lifestyle (some very high maintenance women which may the fault of the doc trying to get a “trophy wife”)
First of all, a 200 mile trail run??? As a fellow runner that has 1 marathon to my name, I salute you!
Thank you for this post. I am a fellow non-physician spouse that has taken on the role of CFO in the household, and my husband is glad that I have taken this on so seriously. I wholeheartedly agree with #3: I know that I have contributed significantly to our net worth (and will continue to do so) despite not making any income. It’s all about those big financial decisions. In fact, I was just featured today talking about this very concept (https://chiefmomofficer.org/2018/08/08/millionaire-moms-financial-wellness-dvm/).
It has been my experience that most physician spouses aren’t very interested in personal finance (I get lots of glazed looks when I mention this topic). They automatically assume that their spouses know better and/or they have a “financial guy” that takes care of everything. I truly hope that more people will realize that there is a lot of value to learning the basics, and involving their spouse/SO is critical to household financial success.
I just read your link. That is wonderful. Congratulations on all of the hard work, and I love that you have a blog! It’s nice to see there are other physician spouses passionate about learning about finance and making wise fiscal decisions/investments.
Thanks- I’m glad to see the non-physician spouses pipe up here. It’s interesting how there is usually one person in the marriage that is designated the “money” person while the other is completely disinterested. As long as there’s one person that cares, that’s better than none!
Don’t be fooled, there is plenty of hiking involved in a 200 mile “run.” 🙂
Thanks for the link to that article. I could totally relate to the identity crisis you described surrounding your decision to stay home. That was, and is, a strange thing for me to navigate as well. 3 kids under 3?? I have 2 under 2 and that’s been challenging enough, but I wouldn’t have it any other way!
I’ve had the same experience you described talking to other physician spouses about finances, which is part of what motivated me to write this post. Good luck with your blog!
uh, yeah. WCI, you have lots of non-physician spouses reading your material. As the non-physician spouse, I had more time to consume personal finance material. I definitely presented “sound bites” to my spouse during residency. Let’s refinance our student loans to a lower interest rate, lets review our spending each month in a financial meeting, let’s track our networth on personal capital. Let’s go from a SEP to an i401k we can do a backdoor Roth.
Those monthly financial meetings? We also decided what to do with our gap money – the money left over after spending. Right now it’s paying off student loans, sometimes it was going towards a down payment on a house, maxing out an HSA, etc.
I grew up in a family where my dad got laid off frequently. Incredibly stressful. I know we have a shot at being wealthy, but it isn’t guaranteed. I really want to be wealthy. After reading lots of personal finance material, I know that means becoming financially independent. And that’s quantifiable.
I wholeheartedly agree with this post. I do the exact same thing. I had a great career while DH was still in medical school and residency, and I managed my own finances. When I was still in undergrad, I made some very dumb mistakes (getting into credit card debt in my 20’s our of pure irresponsibility) and had to have a family member bail me out when my credit was so poor she couldn’t even co-sign a loan for me. I was never taught anything about finance because my family didn’t know either, so they couldn’t teach me. I was fortunate enough to meet a coworker whose parents taught her the value of compound interest, saving and finances. I learned from her, invested in my 401k at 25, saved money, and became self-taught. I always negotiated the lowest interest rates, shopped around and I get the best deals (I worked in medical sales before getting my masters, so it’s in my nature to be fiscally savvy and want to get a good deal). I swore I would never get in debt again, except for the student debt I married into and low-interest debt like a mortgage.
DH had his parents helping him and living on loans for much of his 20’s, so when he finished fellowship and I had a newborn, he took over some of the finances (which I thought was a great way for him to learn), mainly the investments, and I monitored/oversaw the credit cards (used like cash for points and 45 day float). We have always talked about money and have been on the same page, but it can be difficult when one person isn’t managing all of the accounts. We also had a general budget, but we would get credit card bills and see all of the little expenses and still didn’t understand how that extra $1000 or so added up so quickly or where it went. Last year, he became concerned that we weren’t saving enough, and I took over all of the finances. Now I can tell you exactly how much we have spent on every category, if we should wait until a bonus gets paid or hold off on buying clothes or booking a trip until another month, and even though we are somewhat high income (not high compared to other specialties), we have managed to save and great deal in one year.
I am very meticulous, detailed and organized, and I actually enjoy handling the finances. I use Personal Capital, YNAB and Mint, and have saved a lot of money this past year. I have the passwords to every account, access to and copies of every policy, investment and other important financial and legal documents. If anything should happen to him, or even if things were to not work out with us in the future, I have complete control of my financial situation. We have even begun initiating important conversations with parents about their finances, elder care, end-of-life planning and other important discussions, and realizing the fiscal choices they have made or not made.
For the majority of people, an inheritance is gone within one year, and divorced women are notorious for winding up in debt even after generous alimony payments. I think that finance and investments can seem very complicated for some women, and is still generally focused towards and taught to boys/men in our society and in schools, so women don’t think they could understand it or they feel that it is boring. I used to feel the same way when I was younger, but thankfully that has changed. Personal finance and investing has become a strong interest of mine, and I wish that more people felt that way. If we taught it in more real-life applicable ways, or approached it as a means to freedom and controlling your own destiny, I think most people would feel much more differently about it.
Hey, it’s boring for men too!
Sorry about that. I’m not trying to be sexist, just to estimate why less women handle/have interest in finances than men. We should definitely find ways to make it more interesting or at least important for everyone.
I love seeing these comments from other non-physician spouses that handle the finances. And I agree, as someone that gets strangely excited about personal finance and wants others to benefit from basic financial knowledge, I wish there were more ways to spark an interest in folks that think it’s boring. It definitely seems like highlighting the knowledge as a path to more freedom should help.
I am the wife of a mid career Family Med doc. We have made more than our share of mistakes, but I think we are finally on track to a reasonable retirement slightly before the usual age. 2008 really threw us for a loop! Anyway, my husband has no interest in finances. He figures as long as there is more money coming in than going out then everything is fine.
I read the books, do the 401ks, calculate his pension (thank God for that) and budget for college since we didn’t put money aside early on. I am very thankful for WCI, I’ve learned so much. I tried to get him to read the book, it sits half read in his pile of half read books.
What has changed is that I don’t make unilateral decisions anymore. Even with the investments (which he really doesn’t “get” and doesn’t care about- he thinks the pension is enough)- I tell him before I rebalance and why.
I will say I need to inplement POF’s binder of instructions in case something were to happen to me. Most bills would be paid on autopay into perpetuity, but that’s not really a good thing, especially if passwords are hard to find. Progress not perfection.
That’s great that you’ve done the research and gotten everything on track. I need to make that binder too! I thought that POF post was a really good one. I’ve thought about getting all the info in one place before, but it was a good reminder and motivated me to get that done sooner rather than later.
Great thoughts. Like everything else in a marriage, should be joint decisions. I’m in the physician spouse runs the finances camp, my wife just has no interest in it. It’s just part of the chores breakdown – I cook and do the money, she cleans and does the laundry.
She would be perfectly capable without me, and I (forcibly) involve her about once a quarter in what I’m doing just so she has some idea in case something bad happens to me. Numbers just aren’t her thing. I also know another couple where the opposite is true. Whoever enjoys it and has some skill should do it since they will be more motivated and successful.
Outstanding post. I’m going to force my wife to read this. Thank you!
On making financial mistakes along the way….We all make them, but knowing that you have made them and trying to avoid larger ones in the future will keep you on the right track for the long haul!
In our house, my wife the non-doctor, takes care of all the day to day financial stuff. I take care of the investment decisions. We both have a good understanding of what is happening. We can look at a summary of the month and together make decisions for the future. It has worked out well for us.
Dr. Cory S. Fawcett
Prescription for Financial Success
Excellent post! In Canada, having a spouse handle our finances together is especially helpful. Our billing system is relatively simple since we are a single-payer (government) system. Having my wife do my billing saves about 2%/yr in agency fees. While a single payer, our payer does everything it can to make claiming more expensive codes administratively a hassle. Having a billing agent with a very strong personal vested interest in collecting makes a difference. Besides keeping money in our family by not paying someone outside, it saves us on our taxes since we cannot file as a couple. We are taxed as individuals here with a very progressive tax rate so income splitting is huge.
-LD
That’s a pretty interesting little factoid about the Canadian tax system. Rules out a bunch of tax strategies used in the US while introducing others.
Yes. It is interesting for sure. Two parents working here have more take-home pay than if one stays home to enable the other to work more. There was a start to allow some limited income splitting for all Canadians on the first $50K earned with the previous government, but the current government scrapped it. Their explanation was that only rich people can afford to have a parent stay home. Doctors still had a way around it with our corporations, but that got largely shut down this year. It was deemed unfair that we could income-split while the average person could not. It is unfortunate. I personally think families should be able to decide what works best for them without tax interference, but it is political. As business owners, we do at least still have some options with hiring family and strategizing ways around it gives something for guys like me to talk about.
Great post! I love it. Being a physician spouse myself I completely agree, especially points #1 and #4.
My wife never had any time during residency to do anything other than work, sleep, and play with the kids for the limited time she had with them. I took over most household duties, including the finances. Now that she’s out of residency, the finances are jointly discussed, but frankly, I’m usually the one that “turns the crank” and logs into the websites to put everything into action.
For us, though, I’d say my wife is the more frugal one. She’s 1st generation from an immigrant family and is exceptionally practical. Helps keep me in check as my family loves retail therapy.
Nevertheless, glad to see a spouse’s viewpoint! Great post!
Spending is Retail Therapy……That is great!………Gordon
my wife knows zilch and is not interested
what can I do to motivate her
we are both retired she is 67
I’m not entirely sure of your situation, but the question becomes: what is she going to do when you pass?
Is there a child that can help her with the finances? If not, then perhaps that might be motivation enough to start becoming involved.
Also, I recommend starting slow. Don’t share all the gory details immediately — first start with one institution, say banking. Then next week do the credit cards, then the next week the investment accounts, etc.
Hope this helps!
Although my husband managed our finances the first half of our marriage, I assumed the responsibility as his practice continued to grow. Frankly, it made more sense as I have a better understanding of our day-to-day financial needs; medical bills, grocery budgets, kid-related expenses, vacation planning, and so on. Instead of out-sourcing to a financial planner, he out-sources to someone who is intimately familiar with our family’s needs, wants and goals. Me!
As such, I take the job seriously and do my best to research and understand the issues so that – together – we are able to make informed decisions.
Interesting points. My husband, the non-physician, managed the investments and I did the day to day bills and such early in our marriage, but he mostly outsourced to a financial “advisor”. I became interested in the fees, returns, etc and realized how much we were doing wrong once I was an attending. Since I have more interest in it, and have a bit of a control freak side to my personality, I now manage the finances. We do have financial meetings and I help direct him in his Roth conversions, IRA allocations, etc, but he doesn’t have as much interest in it. We can both log into mint and see all of the account balances, transactions, etc, but I seem to be the only one who does this regularly.
I find it very satisfying to manage our financial investments, planning, banking, etc, and he seems content to have me do it. I do think, however, that the household manager spouse (in our case my husband) should be more involved as s/he is typically the one doing more of the spending (signing up for soccer leagues, buying groceries and clothes, etc). At this point, though, I would have a hard time giving up that role.
Love this post. I am the non-physician spouse, and also handle the finances in our household. I’m not exactly stay-at-home, being a tenure-track professor myself, but I still have more time for it. Also, and I think this is the most important part, more interest in it. My wife would prefer not to have anything to do with managing our finances. I make a point of involving her at least by telling her of the big things that we are doing. However, she recently told me I should only tell her that we are doing “OK” or “not well,” because if I tell her we are doing well, she fears she will spend more.
Absolutely critical, though, is we agree on our overall financial goals and lifestyle. We talk about this more frequently, and I then try to use the money we both make to reach our goals and enable (or keep us to) our lifestyle.
That’s great that she only wants to know if you’re “OK” or “not well.” Playing mental tricks can certainly help keep lifestyle inflation in check!
As another non-physician spouse handling the finances, I LOVE this post! I’ve always been the one to manage the finances, but I read the WCI book when he graduated med school and that pushed me to get some things done (get disability/life, start watching those student loans) and start paying more attention to what we are going to do with our money. We still make all the “big” decisions together, but I’m the one actually making/watching the budget, going through the hellacious IBR verification, etc. Last year I found a (fee only) financial planner and we are in even better shape now (I probably could have done it on my own but I found her guidance helpful for us both and I don’t have any interest in managing investments at this point in my life).
We’ve been together since high school, so I’ve been along for the training ride since the beginning. We’re almost to the end and we are both excited that we have a plan to hit the ground running on the right financial foot. And personally, I am proud that even though I now stay at home with our kids, I’m doing quite a bit towards our financial future.
And yes, it is a good thing that the person looking up all those dreamy homes on the MLS is the one who has an idea of what we can actually afford to spend when the time comes 🙂
Everyone has their own version of marriage and the division of labor and resources. This post describes the benefits of the version that my spouse and I have, so I loved the insight. I’ve been reading WCI and PofF for a while. I learn so much and much of it is applicable to our situation. I appreciate that these kinds of posts come up (non-working/ non-physician spouse). The blogs, guests and forum all seem to convey a respect for the non-physician spouse.
There are times when I am in a conversation with someone who can’t wrap their head around the fact that my spouse has worked hard to have a financially successful career and yet, I’m the one who manages his earnings. The role that has had the greatest impact for our bottom line is that of gatekeeper to make sure we pay ourselves first and not waste this financial opportunity. For example, limiting our first house budget to $300,000 even though we could have afforded much more, systematically investing money in taxable accounts while taking full advantage of tax advantaged retirement accounts. Our division of labor helps take out the “I deserve this” mentality of the Doctor culture as stated in the blog.
So here’s a shout out to all the non-working , working, non-physician or dual physician partnerships out there making hard decisions on how to spend money, pay bills and supporting the goals of his or her family. Absolute trust in partnership is required to make it work for us. We are in the middle years of the career and if we stopped saving money today, we would still have a pretty sweet retirement thanks to diligent early savings, getting in early on the 10 year bull market and compound interest. Next year we will start the 10 year run (or more) of having a child in college and the ride continues and gets more complicated and I will still be looking at WCI and POF for guidance. (and the great moderators of the forum).
I’m enjoying all these perspectives from other non-physician spouses, thanks for sharing how it’s worked for you! I agree that the WCI community is respectful of all of us non-physicians. I don’t think we’re allowed to join the PoF facebook group, though. If that’s true, we might have to petition for them to let us in there. 🙂
Great article. But I have to quibble with #2, Removed from Doctor Culture.
The solution to keeping up with the Jones is not having the lower income spouse handle the finances. The solution is to grow up.
We have friends who live far more lavish lives than we do. I have no idea whether they have more money. None of my business and not interesting. We have friends who spend less than we do. Again, I don’t know their incomes and don’t care. As best I can tell, they are no more trying to “keep up” with us than we are trying to keep up with the big spenders.
How much my friends spend simply does not have anything to do with what we spend. There is nothing to keep up with and no yearning to buy something expensive because I know someone who has one. I know someone buys those fancy cars and houses. Why would it matter whether I know someone who does?
Logically, it doesn’t. Emotionally, I thought I had a pretty nice house until my neighbor/friend did a massive upgrade on his. Now, my psyche says, “You live in a dump compared to that, why don’t you do an upgrade too?” He has the same problem when he looks at my boat. Our solution for now? We have drinks on his back deck and surf behind my boat.
No physicians in our family, but I always paid the bills and made family investments and allowed my husband to concentrate on his employment. Since he retired, I happily gave him the bills to pay and my avocation in retirement has been to continue with stock and bond allocations plus a little real estate. We have been retired 20 years.
Non-physician partner here — finances can be scary for anyone, but it’s just a matter of commitment and exposure. My physician partner did not manage things too poorly before we were together, but he had a lot of blind spots (including the belief that now that he was making “doctor” money he didn’t need to budget).
I work in business and built out a few financial projections to show him how his current rate of savings was not appropriate given the goals he’d expressed to me (nothing earthshaking: retiring, having a kid/daycare/college). He makes 2.5x what I do and yet I saved the same dollar amount/year he had. The raw numbers were shocking to him but now he’s totally onboard, we’ve got plans in place, using YNAB to monitor spending, and are still enjoying life. Don’t be judgemental of your spouse, it’ll just make them want to do it less — make it a partnership. Communicate. Set goals together — and make sure they reflect the both of you.
And yes, I’m sure there are plenty of spouses/partners out there who can’t build out financial models (yet) — no worries. That doesn’t mean they can’t be a part of everything. Little by little.