Financial Flexibility – Don’t Spend It All at Once | White Coat Investor

By Alaina Trivax, WCI Columnist

“Good for you! You work hard, and you deserve that new ____.”

Have you ever heard that? Maybe after purchasing a car or house or following a big vacation? Or maybe you’ve thought that yourself: I’m getting this because I DO deserve it.

I’m not in medicine myself; instead, I work as a middle school teacher. My husband, Brandon, is a partner in a PM&R private practice. We have two young boys and a dog, and we’re still squeezing into our 1,100 square-foot home from his residency years. We had some preliminary conversations with our realtor recently about selling our current home and looking for something a little bigger. I loved working with this guy seven years ago. At the time, we knew very little about long-term financial planning—we more-or-less impulse-bought a house after our rental situation fell through.

It was not an ideal strategy for home buying!

More recently, when that same realtor emphasized how much we “deserve” an upgrade to a bigger house with more space for our growing family, I’ve got to admit that it was a bit of a red flag.

The Medical and Financial Journey

Like many WCI readers, we have a written financial plan. Ours includes a goal of maxing out our retirement accounts and paying down our debts, with a significant emphasis on paying off the student loans as aggressively as possible. During my husband’s training years, this didn’t leave much money for fun or frivolous spending. Overall, we did fine, but we certainly got used to watching our spending closely.

Now, though, we’ve finally got some financial freedom. Since my husband became an attending and, more recently, earned partnership in his private practice, our income has more than tripled from his training years. A lot of the money has been allocated for student loans, but we’re also saving some for a little fun spending.

As the saying goes, money doesn’t buy happiness. Absolutely true. But it can buy time, convenience, quality, and a whole lot of things and experiences. We’ve reflected on balancing our financial priorities with our desire to enjoy spending.

Our financial plan still stands—and still includes some big goals. We’ve identified a few areas where we want to increase our spending to enjoy life a little more. We’ll keep paying the student loan minimums every month, but spending on these priorities might mean there will be certain months during which we don’t make an extra student loan payment. The hardest thing about this choice is knowing that it’s also delaying our goal of moving to a larger home. We’ve decided to be OK with it, though. We certainly feel like we deserve a house with more space and a bigger yard, but we can’t have it all at the same time. We’re in the final stretch with these student loans anyway, and we are on track to pay them off within 4 1/2 years of Brandon starting his attending job.

More information here:

We Quit Paying Extra on Our Student Loans (and Why It Feels Dangerous)

With Our Expanding Family, We’ve Had to Break Our Financial Plan – Twice

Travel and Family Experiences

Over mid-winter break, Brandon and I traveled to an all-inclusive resort in Cancun for a vacation with our two boys, my mom, and my aunt. Getting out of the Michigan winter for a week and enjoying some sunshine was beyond wonderful. We appreciated the extra hands for our first “big trip” with the boys as we spent a few days living our best lives—splashing in the pool, eating mid-day ice cream cones, and enjoying the time together. We could cash-flow our portion of the trip as the expenses were spaced across a few months—plane tickets in the fall and hotel costs upon arriving at the resort. Honestly, having the ability to cash flow a trip we couldn’t have afforded just a few years ago was pretty cool.

Over the winter, I also booked houses for two summer lake trips with my extended family and with my in-laws. I’m new to the beach vacation world, and it’s wild to me that you have to book so far in advance.

Family trips like these were a highlight of my childhood, and I want to ensure my kids have those memories, too. Now that we can loosen up our budget a little, spending on travel and time together is our top priority.

A Little Fun—For All of Us

We’ve been hitting the student loans hard for quite a while now. During my husband’s first few years as an attending, he regularly took on additional weekend shifts so that we could send some extra money toward student loans. We’re very motivated to be done with them and feel good about our current payoff trajectory. So, we’ve decided to increase our spending on hobbies and activities for us and our kids.

Brandon has been a lifelong golfer and recently signed up for a six-month series of lessons with GOLFTEC. He can squeeze in the lessons on his weekly half-day and then fit the practice session in over lunch later in the week. The lessons are pricey upfront—$1,500 for 15 lessons with a PGA-certified pro, regular practice time, and a club evaluation. But the value is there—it works out to around $100 per lesson plus some additional benefits. It’s the kind of thing we definitely couldn’t have afforded a year or two ago. Even now, we both still shudder at the idea of such a significant single expense. What’s the point of working so hard, though, if we don’t get to enjoy life, too? These lessons are something he’s wanted for a long time, and they finally fit our budget.

We’re also getting the boys into more activities—and kids’ activity fees can quickly add up! They both attend school full-time—daycare for the little one and preschool for the other—so they don’t necessarily need extra socialization or structure. But it’s fun to watch them develop new skills and explore their interests. Right now, I’ve got them in weekly swim lessons and a kids Ninja Warrior-esque class. They’ll be home with me all summer, and I might add another activity or two to fill the days.

The golf lessons, for sure, and even some of the kids’ activities are expenses that wouldn’t fit our budget a few years ago. Heck, we just got back to broke in 2022. In February, for example, we paid for the total cost of the resort stay when we arrived at our hotel in Cancun. Brandon signed up for golf lessons the day after we returned from vacation. A week later, I enrolled the boys in a six-month course of those ninja classes. That was an expensive month, and we most definitely did not send extra money to student loans. We’re leaning on the plan here. We know we’ve prioritized our areas of importance. There are plenty of other things we want to buy or do, but that would mean spending it all. And that’s exactly what we want to avoid.

More information here:

What’s the Value of Our Time, Anyway?

How Creating a Budget Helped Us Decide If We Could Afford $1,000 Plane Tickets

Small Upgrades and Conveniences

During residency—and especially during that extra-tight fellowship year—we postponed many repairs, upgrades, and general life purchases. In some ways, that level of frugality became a habit.

For example, the lid on our blender broke at some point. The blender still works; you just have to hold down the lid while it’s running. Did you think you’d put the frozen berries away while your smoothie came together? Not anymore. I like to think of it as an opportunity for a little (forced) meditation break! It’s been like that for at least a year, and we just live that way now. Sure, we could buy a new blender today, but we’ve got our eyes on a fancy brand, so we’re waiting for a sale.

A new blender, upgraded sheets, and a better couch are all on that list. Especially as we’re preparing our house to go on the market in the next year, there are quite a few home projects that we need to wrap up, as well. These are expenses we could cash flow, but we can’t cash flow them all simultaneously AND continue fulfilling the other goals of our financial plan. We’ve kept a list of these upgrades and figure we’ll fit them in as our other spending allows.

Sticking to the Plan

After maxing out our retirement accounts, our top priority is still to keep paying off the student loans. With an upcoming bonus and additional expected income, we hope to finish paying these off by mid- to late-2024. The most exciting thing about being done with them is knowing how much additional financial flexibility we’ll have. We can make different choices with our lives, because we won’t be tied down by hundreds of thousands in student loan debt.

After we pay off those loans, we both look forward to frivolous, unmonitored spending. By various measures, we have been relatively conservative with our spending and lifestyle throughout this journey, and we want to loosen up for a few months—before settling back into a budget while saving for a new home. Brandon would like to purchase new golf clubs. He’s been using his current clubs since he was in high school, so he’s certainly well overdue. Even my brother poked fun at him last time we golfed together: “Come, on doc! You’ve got to get some new clubs.” We could justify the expense—he’s investing in his golf game with the lessons already, so he might as well get the new clubs, too. It takes some intentional effort to avoid falling into that trap. We’re holding out just a bit longer; he wants to do a club fitting for personalized clubs, so he’s waiting until we’re really ready to spend the money.

I’ve long been considering an appointment with a personal stylist. I used to be much more fashionable and enjoyed styling myself. Amidst the chaos that comes with working full time, running a household, and keeping two small children alive, my personal style isn’t something I put much thought into anymore. I’d like to have a sense of style again—I just don’t have the time to explore fashions and shop and return what doesn’t fit. I think it could be a lot of fun to work with someone who is an expert.

Brandon has also been building a commemorative watch collection since graduating from residency. Obviously, with our finances as they were, he doesn’t have anything super pricey, but he does have a few meaningful pieces gifted upon the graduation of fellowship, for Father’s Day from our boys, and more. He also wants to get matching his-and-hers watches to commemorate the payoff of our student loans. This will be a pricey purchase that will delay our other financial goals by just a bit. I’m learning, though, that we’ve got to enjoy our money.

Once those loans are actually gone, our priority is to maintain our retirement savings while also saving to buy or renovate our next home. We want more space for our family, and we are ready to use our money to get it!

Spending the Money

Like the “I deserve it” perspective, we’ve found that the “I need it” mindset is also a threat to our financial plan. These clearly defined priorities give me something to reference when evaluating our choices and spending. We now have the flexibility to enjoy our money, but we don’t want to get caught up in enjoying all of it at once.

How have you prioritized your spending? How did your investing plan change after you paid off your student loans? Is it still difficult for you to spend the money on yourself or your family? Comment below!