Expenses December 2017
December was a good month with manageable expenses.
My focus going forward is to build up my emergency fund again. I mentioned in a recent post that I saved way too little in my EF which I’m about to remedy – Dr. Mo don’t wanna be no broke doctor.
Elective Spending – $592
I spent 24% more than I needed but it’s not putting any financial pressure on me. It’s nice to have this extra wiggle room which I grant myself by earning a little money on the side.
My elective spending was from:
- shooting pool
- dining out
- renting a movie
- subscription services
Necessary Spending – $1,857
I needed to spend money on my legal fees to defend myself against the medical board and I needed to pay for:
- health insurance
- some coffee
- some entertainment
I’ve been able to maintain a low transportation and entertainment budget because of where I live and the hobbies I have.
I can see that with a larger (much larger) emergency fund, I can have so even more wiggle room to absorb such events as legal fees or maybe healthcare costs down the road.
The Basic Overhead
When it comes to financial independence and retiring early what matters is your basic overhead. If you can minimize that then you’ll have so much less to worry about in life, financially.
Who cares if you spend $8,000/month on entertainment if your basic obligation is only $2,500/month?
Sure, it would be good to put your money to good use but at least with a low expense-floor you have so much more flexibility.
Pay Down Debt
When you get to that zero-debt point, it’s the biggest leap you’ll take towards financial independence. Even if you just develop a solid plan to paying off all the debt, you’ll experience more control. That’s my hypothesis.
Get rid of all debt possible and try to pay for everything, even your home, in cash.
Don’t Accumulate More Debt
Like my momma said: “Go get yourself a nice car, a nice fancy house and you’ll find the drive and motivation to work full-time again. How else do you think people make it through 30 years of working 50 hours a week?”
Debt is tempting. If you do decide to get into more debt, take on just enough so that you can pay it off in 1-3 years – I find that to be a good trade-off.
You may want that super fancy Ferrari because you otherwise have your financial shit together, by all means, finance it and pay it off ASAP. You’ll work a couple of months/years longer but you’ll have a plan so you’ll be in control.
Get Rid Of Money Consuming Items
Things that need batteries, cartridges, things that you have to toss in the trash, things that burn a lot of electricity, fuel, or that have to be replaced a lot – these burn holes in your pocket and take resources away from others.
Don’t Play Into The Hype
Healthcare, transportation, travel, and housing – these are the 4 big hypes of the US culture.
As healthcare professionals we can get caught up trying to paint a successful life with a fancy home, a nice car, and elegant vacations.
But our success is how much we enjoy life and what we do with our time – the connections we make, the positive vibe we spread; that’s the good stuff.