By Francis Bayes, WCI Columnist
According to a Medscape survey of more than 15,000 physicians in 2020, about 80% are married, and only 4% have never married. Another question in the same survey asked whether the physician is married to another physician, and only 16% and 25% of male and female physicians, respectively, responded yes.
This would mean that many physicians had more income potential and/or less net worth than their spouse when they married. Various medical specialties make up more than half of almost every top 10 list of highest-paying jobs, but at the same time, 73% of medical school graduates have student loans. A current or future physician could be in a tricky situation where they bring to their marriage a negative net worth in the present though still would have a high likelihood of earning millions of dollars in their lifetime. (Readers who are in a relationship with a future attending physician should check out this thank-you letter.)
You cannot enter matrimony without saying the word, “money.” That is, you cannot avoid conversations about money when you are married. In this column, I share how my wife and I have handled finances in our nascent marriage. My wife works as a consultant, while I am an MD/Ph.D student. Every marriage is unique, so rather than specific advice, I focus on general insights from our experience.
Before I share our story, I have two big disclaimers. First, I have received economic outpatient care, which is William Danko’s term for economic gifts that parents give to their adult children. Second, my wife and I come from similar socioeconomic and cultural backgrounds, and that’s made it easier for us to initiate conversations about money and to reach resolutions.
Step 0 – Talking About Money Before Marriage
Before a couple is ready to discuss marriage, a conversation that many medical students in debt might have with their significant others (SOs) is about splitting bills and receipts. Some of my medical school friends and their SOs who work were in a quagmire because every dollar that a medical student spends costs more than the dollar out of the SO’s paycheck.
Because my MD/Ph.D program has been providing me a stipend to cover living expenses, this was not a major issue for me, but I was still open about what I couldn’t afford when my wife and I were dating. Here are my two cents. If financial responsibility is important for a medical student, then they need to let their SO know that they cannot keep up with them on discretionary spending—that is, they cannot go on that three-day vacation or eat at the new three-dollar-sign restaurant—because they are taking out $X in loans for A, B, and C. They will have to disclose their loan amount if they marry their SO anyway, so I think they should be upfront about it. If their SO cares about them, they should be understanding of their financial situation and would be wise to look at their future income instead of their loan amount or their “measly” income for the first few years after medical school.
Still, if the med student cares about the relationship, they also should not be cheap with showing their appreciation either: buy the SO a nice birthday dinner and gift!
Besides talking about spending, we had better uses for our time than talking about investing and paying off loans. My wife did not care whether my stipend was enough to save money for the long-term as long as I paid for our date-night dinners (I gladly did!). I was aware my wife had student loans, but I did not know (or care) enough about it at the time to ask for details. We only had vague ideas about each other’s financial situation, but I sought to answer these questions before one of us brought up getting married:
- Is she generous when it comes to hospitality, giving gifts to friends, family, and charity?
- Does she pay off the credit card balance in full in the absence of unforeseen circumstances?
If the answer was no to either of the questions, I would not have wanted to marry my wife because these questions reflect my values. I considered financial chemistry to be just as important as other dealbreakers. Once I was confident about the answer to these two financial and other nonfinancial questions, I trusted that our partnership would work in parenting, volunteering, or financial planning. After all, the best financial planning in marriage is the commitment to be married until death.
Read more from Francis Bayes:
Step 1 – Setting Money Goals as a Couple
When we were dating, we discussed some goals that we wanted to have as a family, but after we said our marriage vows, we wanted such abstract ideas to become a reality. We no longer could be indifferent about creating a financial plan that would help us pursue our goals. I wanted us to talk about money early so that we would think about it as seldom as possible down the road.
We merged our bank accounts, shared passwords, and created joint email and Mint accounts. Every couple is different, but for us, doing so was the easiest way to assess our financial health and remove any unnecessary friction. We learned that my wife had squirreled away cash in a low-yield savings account, while I invested most of my meager savings in index ETFs. Neither of us shamed the other, because getting married meant having a fresh start with our combined strengths. Before we reallocated our excess cash, we monitored our spending as a new couple for the first few months so that we would know how much we need in our checking account on a monthly basis and in our emergency savings account.
We then set SMART goals (specific, measurable, attainable, relevant, time-based) and prioritized them. My wife wants to spend as much time as possible with our future child(ren), so our most immediate goal is maximizing flexibility for her. In case she would want to work part-time or stop working altogether, we prioritize paying off her student loans so that our liabilities would not be a burden with one or one-and-a-half sources of income. We refinanced her student loans before the federal forbearance ended, and based on our current savings rate, we will have zero student loans no more than three years after I finish my medical training.
We are content with the possibility that we might achieve financial independence later than we would with two incomes. But I do not know how much I would enjoy practicing medicine 20-30 years in the future. My choice of career path also depends on whether my wife discovers a new field in which she wants to work full-time. Despite these uncertainties, if my wife and I could be better and happier parents, we believe any potential financial trade-off would be worthwhile.
Medical students, as well as residents and fellows to a lesser extent, have a clean slate on which they can sketch a financial picture for their families. They can erase and edit some parts of their sketch as they go through their training. As rigid as medical training can be, future attending physicians can add flexibility to their family’s financial plan. Do not be afraid, and take heart with the WCI’s words: “A physician income covers a multitude of mistakes.”
Step 2 – Dividing Financial Responsibilities
Each of us gravitates toward what we do better, hate less, or enjoy more than the other person. I do the laundry because I have lived in our apartment longer, while my wife likes to vacuum and dust. I eagerly clean the bathroom and the kitchen knowing my wife would handle any cockroaches that appear (dead or alive). I enjoy planning trips outside our city, but my wife manages our social calendar.
I manage our household finances because I regard it as a hobby or “second job.” I do not take my wife’s trust for granted, especially because her paycheck currently funds most of our monthly budget and retirement portfolio. If we ever need to change our financial plan, we would do it together. I do not inundate my wife with every financial transaction I make, but I ensure that she is aware of these three things: (1) we pay off our loans aggressively (see above); (2) we have an aggressive asset allocation; and (3) we automate everything (more later).
All of the above would hold true even when my paycheck is bigger than hers because our regular financial check-ups remind us that we are a team in whatever we do. I also do not want her to be clueless if something happens to me and she has to manage our household finances by herself. In addition to the regular financial check-ups and a written contingency plan, I have been recommending her to read two personal finance books that are engaging and not too technical: The Psychology of Money by Morgan Housel and I Will Teach You to Be Rich by Ramit Sethi. One day, she will read them!
Step 3 – Investing in the Relationship First
While we give and save a set percentage of our net income, our focus is on investing the remainder of our income in our relationship by automating our donations, contributions, and payments. Because we already know where our money is going and how much we can spend every month, we can (1) encourage one another to buy something that one needs, (2) eat somewhere new and interesting regardless of the cost, and (3) understand that “not now” does not mean “never.”
Here are some examples:
- When we were dating, I hated seeing my wife (then-girlfriend) buy cheap boots that would fall apart after she wore them for the winter months. Once we were married, she felt secure buying whatever was the most comfortable and stylish because she knew we could afford it.
- We enjoy trying a variety of dishes across cuisines, so we have explored both hole-in-the-wall and Michelin-starred establishments. On special occasions and vacations, we order what we want because some dishes might become cherished memories that connect us to that time and place.
- My wife wants to eventually drive a more comfortable car, but she understands that driving our current car for as long as possible helps us achieve our financial goal (she actually wouldn't mind driving a Lexus). Choosing delayed gratification is easier because we know that we are making progress and that we can reevaluate our big financial decisions when we achieve our goals and milestones.
We want the other to feel valued in the present and in the future, and our conversations about money have helped us grow in our understanding of how the ways we save and spend show that we care about our wants and needs. As I am about to finish my Ph.D and prepare to go back to my third year of medical school, my wife and I are thankful that we have gone through each step because building a good financial plan and financial habits would have been challenging while I am going through an Anki deck and UWorld questions.
No matter how inconvenient, not doing so would have been costly. If you have not, the best time to talk about money with your spouse was yesterday. The second best time is today.
Did you talk to your significant other before you were married about your respective financial history and your goals? If so, how much did it help your future relationship? If not, how much did it affect your finances? Comment below!
This is so important and such a great post. My wife and I started our financial education together (by reading the WCI book together) and that has been such a huge part of our success! We still budget together every month and talk about our finances and money together all the time. It’s a team sport. The biggest mistake is one spouse or partner feeling like they don’t know enough about money and not participating!
I read some of your comments and want to start humming ….”On The Good Ship Lollipop”…..
It appears to me that the the low earner/non-working/less educated spouse is usually the one who has to “get on board.” I imagine the reason you read books together is to make sure YOUR points are clearly made. I can’t imagine reading a book on finances together with my husband. Really?
Usually a spouse that is perceived as “non-participating” is so tired of having their opinions diminished and realizes it is easier to just nod and agree.
Family finances make interesting posts, especially if you are always the spouse that is perceived as “on board.”
I’ve read a lot of his comments as well, and I don’t interpret it that way at all. I think he is genuinely being constructive. If anything it sounds like he and his wife have a good partnership. For the record, I think it is really unfair to insert assumptions into someone else’s marriage (good or bad; but especially those that are negative). I think your post is very much against the spirit of this post and his response
For the record, we all have our opinions.
The post and the comments are very demeaning.
Many times, the WCI has said to take what you can use from the posts and leave the rest behind. These are just my opinions.
Have a good day.
What’s wrong exactly with making sure your points are clearly understood by your spouse? My wife and I read books together on things that are important to us. Just because you don’t (won’t?) doesn’t mean that others shouldn’t.
Just wanted to counter that I, the female, am the money manager in our family and my partner is not terribly interested in doing more than saying “OK, OK sounds good, make it so” when I ask for his input. While I may have, as Bev refers, encouraged him not to bother questioning my recommendations much*, it is not sexism that has me ‘running the show’ to the degree to which I run it. Also he has a sense of humor I can’t always recognize so I am still fairly nervous about how he will fare if he ever needs to take over family finances- mentioning buying an airplane with life insurance proceeds etc. Trying to get him up to speed but mostly ask he get help from my more receptive family members (the kids now they’re grown and getting advice from me). His involvement in his parents’ affairs as they die/age has been more of an education to both of us than he had previously absorbed.
* This past week I said we would increase our CD investments and decrease our bond investments (since we are at the age to want to access our money, and also as bond funds are losing ground as interest rates fluctuate lately). He said “But what about bit coin and gold? Shouldn’t we put money there?!?” Uncertain if he’s pulling my leg or not, after saying “no that is not a good idea at all” a few times; and him saying “well you should look into it some more”, I finally responded “I have already, I’ve read several articles on WCI and elsewhere about why those are really bad investments for us, do you want to read them as well and see if you disagree with my conclusion? No? Okay then.”
However as a woman , and two doc family with his Army pensions our main income now, I do wonder if I might be more lenient in letting him spend money than some men are in controlling or belittling their wives’ purchases… ie he now owns $1/4M (I hope if we ever have to sell them) of sailboat and sports car, and at our wealth level (and hippie/slob lifestyle) neither of us is getting upset the other one bought designer clothes/purse/shoes or gets their hair and nails done too often.
It is an interesting question of whether you might be more lenient of your husband than some men are with their wives. I am a man (although one might have already assumed so), so I think it’s something that I will think about whenever my wife and I make a financial decision together. My wife will continue to be the primary breadwinner for a while, but regardless, I don’t think the status has affected our process so far. If anything, my wife can spend money more confidently than she did before (example 1).
There are lots of ways to skin the financial cat and I appreciate the author stating how he and his wife approached money management and goals. This reinforces the main thing is communication and aligning priorities. My husband and I were so ignorant when we started out 26 years ago, but at least we were aligned and as we learned we grew together. As time evolved, I run the financial show with his consent and preference with his input and we have “state of the X Family” meetings once a month or so and he knows where to find things.
We have allotted a miniscule portion of our portfolio “just for fun” a mutual fund in gold and some niobium stock at husband’s request.
A big advantage was my older siblings who counseled us to talk about money and starting an IRA. It pays to be the youngest of 8!
Funny how much more important it is to be on the same page than exactly which page you’re on, isn’t it?
Many problems can be avoided by taking your time and not rushing into a legally binding relationship. My spouse and I dated for over 5 years before getting married. There were no surprises, financial or otherwise.
A person can only hold the crazy in for so long before it inevitably comes out. It’s my theory that this takes about 1-2 years max. We all have a little crazy in us, and that’s okay. Then you have to spend another 1-2 years deciding whether or not it’s a crazy that you’re willing to deal with for the rest of your life.
In our culture, short engagements are the norm. Our 18 month courtship (including a 7 month engagement) was considered abnormally long. But I agree, too much can be hidden for months or even a year or two.