I present to you my monthly physician expenses. I spent $6,181 in March 2018. I’ll break my expenses down and discuss how a healthcare professional can optimize their expenses and how to cover them with passive income.
March 2018 Physician Expenses
I spent a total of $6,181, of which $2,585 was spent on legal fees dealing with the medical board.
The other large portion, $1,088, was spent on my visa paperwork for Spain. The lawyer I have hired for this process is incredibly and she’s been getting me ready for my upcoming visa interview.
This is the first month since I’ve retired where I don’t quite care where my spending goes. It’s a very interesting feeling because I’ve been a frugal budgeter for the past 6 years.
Budgeting in Retirement
By the time you are financially independent and you have income coming in during your retirement years, your only spending obligations are your household expenses.
You no longer need to pay down debt, you don’t need to contribute to your retirement account, you don’t need to build your emergency fund.
Your only expenses are the expenses you want to have. Do you want a $1,500/month auto lease payment? Do you have enough money coming in to cover it? Great! Enjoy your Ferrari.
Unlearning Budgeting
I am having a tough time reprogramming my mind. My default mode remains frugality and budgeting even if my spending shows otherwise.
I don’t mean to be wasteful of course. There is still an environment and other human beings with whom I share this planet – but eventually it’s nice to loosen our budgeting.
Work/Business Category – $2,760
My March bill for my lawyer wasn’t bad, $2,500 for us to meet to prepare for the medical board investigation interview. I should be hearing back from those losers in the next few weeks and figure the next steps.
Taxes
I spend some money on books, courses, research, website hosting fees, etc. which I categorize under work/business. This allows me to write it off simply come tax-time.
Everything I spend in this category is deducted dollar-per-dollar from my income as a telemedicine physician.
The goal is to shift as much of my spending into this category as possible so that I maximize my deductions and minimize my taxes.
Of course, there are a lot of other things that I’ll be writing off on taxes, not just what’s in this category. I discussed my tax workflow in this other post if you’re interested. Anything and everything that is related to my work will go on my Schedule C for that beautiful 1:1 deduction.
Travel – $1,087
This isn’t a traditional travel category – this money wasn’t spent on airlines or train tickets. I created this category in order to budget for a visa to Spain. I have traveled to Spain and I love it. It would be a great place to call a second home.
The great thing about budgeting is that you can create savings categories as well as creating spending categories. It allows you to not only track dollars but plan ahead to meet your financial goals.
Entertainment/Dining Out – $753
I spent $753 on dining out and drinks and other fun activities. $160 of this was spent on dining out – this was a busy month for me and I was too lazy to cook some days.
I don’t have an alcohol or drug problem but I do have a binging situation which surfaces from time to time when I get stressed. The medical board investigation didn’t help. I add any binging spending in my entertainment category though I could create a binging category – not sure I wanna do that to myself.
Budgeting
I start off each month by budgeting a conservative amount into each category but I end up bumping up that value if my spending increases.
This, of course, isn’t budgeting – it’s expense tracking. Nothing wrong with expense tracking but it doesn’t help one achieve long-term financial goals.
Saving For Financial Goals
My only savings goal currently is about $50k for a condo purchase in Spain. I am looking in Valencia and though $50k is on the low-end, I have the luxury of time to shop around and throw out some low-ball cash offers.
Construction and design standards or shockingly low in Spain which offers me the opportunity to buy something subpar and renovate it myself to my own standards.
These past few months I have managed to save around $30k towards this savings goal and that’s the only reason I continue to budget.
Utility of Budgeting
My personal financial situation is slowly morphing into an automated system. This questions the utility of budgeting – Can I get rid of YNAB?
If you are spending less money than what’s coming in then you are financially free. In fact, ALL financial problems can be solved by spending less than one earns. This is true whether you’re a government or an individual consumer.
Looking at April 2018 Spending
In April I’ll be finding out about the status of my medical board investigation. I suspect I’ll have a few more hours of my lawyer’s time to pay for.
I’ll have a quick flight to take in order to interview at the consulate for my visa. I won’t have any other visa expenses after that and should hopefully receive the visa by May.
I spent nearly $60k in 2017 and I came out with a higher net worth and without any financial difficulties despite being retired. Despite high legal fees I managed to come out ahead.
I think 2018 will turn out fine.
Savings
I would like to add a little more to my savings for the purpose of buying a condo in Spain but this isn’t a priority – it’s a luxury.
If I keep working and earning and income then I’ll contribute the excess towards this budget category.
Investing
I haven’t contributed any money to my investments since last year and I’m not sure I’ll be doing that anytime soon.
I have a Solo 401k which I set up last year but haven’t contributed to it. Do I want more money in tax-deferred accounts? Unlikely. The only reason I would do this is if I needed to lower my tax burden.
If the market bottoms out then I’d consider putting some money into some small-cap ETF’s.