[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
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.
#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?student loan options during my husband’s intern year. I realized just how much we needed to learn, not only about his loans but also about other topics. I read the WCI book and devoured some of the other recommended readings on the site. I’ve continued to follow the blog and read books as I have time depending on the specific financial issues that come up 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
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!