This is my monthly physician household spending report for June 2018. In total I spent $3,294. The biggest category, once again, legal expenses for my medical board investigation.
The reason I write these posts is because I want to pave a path for other medical professionals who are interested in early financial independence. I was able to gain some financial security by maximizing my savings rate, paying down all my debt, and budgeting aggressively.
The advantage to that is that you can work as little or as much as you want. You can live in any country that you like. And you can spend your hours any way you wish.
Physician Household Spending
$3,300 of monthly spending comes out to $39,500/year. That’s a lot of money even though it doesn’t seem like much when you compared it to how much we earn as medical professionals.
Earning $40k a year is really easy. At $250/hour it only takes 180 hours per month to gross enough pre-tax to enjoy that kind of household spending.
Honestly, I think over the past few years I have been leaning more and more towards earning the money I need to live off of rather than creating a passive income stream.
Passive income is great when you can have it. An index fund investment portfolio of $1M could have enough passive to generate $40,000/year, most years.
Average Spending
The legal fees have added up. 2018 has been an expensive year in terms of my overall household spending. Fortunately, I’ve spent only from the income I earned and not my investments – I don’t have enough invested to spend this much each and every month.
I am earning this income as an independent contractor which means that I can write off the legal fees against my income, directly.
SPending Breakdown
$3,294 affords me an incredible lifestyle. Here is the breakdown.
Housing – $344
A paid-off condo in Portland, Oregon doesn’t have a whole lot of ongoing expenses. I pay $170/month for HOA and another $170/month for property taxes.
People say Portland is expensive but I don’t know of many mainstream cities where you can still buy a condo under $200k.
Food – $407
$70 of this was dining out and the rest was spent on groceries.
I’ve been making more of an effort to eat at home. I’ve had some blood pressure issues which I think are related to alcohol intake and salt intake.
Health Insurance – $90
I only pay for health insurance in Spain. I got rid of my US health insurance plan.
I’m sure I’ll have to pay some tax penalties on this. But I would rather pay the tax penalty than give a company money for services I won’t use.
Transportation – $20
Portland public transportation is very functional and very cheap. A day pass costs $5.
I don’t own a car in the city and with the use of Uber or Car2go, I really don’t see the need for a car.
Communication – $113
When I first started working for Doctor on Demand I upgraded my internet from 10 Mbps to 25 Mbps. Frankly, it didn’t make much of a difference since the patients were often the ones with the weak connections.
This bumped my monthly home internet charge from $49 to $67/month. However, because DoD asked me to perform the upgrade, it’s 100% necessary for my work. Therefore, it’s 100% deductible on my taxes.
I also stopped calling my patients using Google Hangouts which is a free VoIP service. I started making my calls using Ting which bumped up my cell phone charged from $18 to $45/month.
Entertainment – $600
This is the one category that I need to work on every month. It’s my discretionary spending and I usually don’t care to curb it.
In June 2018 it was mostly having dinner out with friends in Oakland which isn’t a cheap city.
Optimized Spending
Looking back at June 2018, I could have optimized my spending better, especially if I needed to.
I’m not a frugal person, inherently. I am a spender. Budgeting isn’t tedious but it requires a lot of self-control on my part. Using YNAB makes this really easy.
3 Main Categories
There are only 3 main categories that most Americans have to worry about. I call this the core spending :
- Housing
- Food
- Transportation
I’m a physician so I know how and where to get cheap health care. I suspect that next year the options will get even better.
Cell phones and home internet aren’t mandatory and though it seems drastic to not have them, the question I ask myself is, would I rather suffer at a job I dislike or forego a cell phone and live it up.
Even then, I can still carry a cell phone, make phone calls, watch YouTube, and send text messages by hooking up to free WiFi networks.