Dear New Doctor – Don’t Live at the Level of Your Income

February 2, 2018

Sometimes called “lifestyle creep,” this personal finance villain snares countless physicians, and it is especially prevalent among those whose incomes have recently jumped. Newly minted physicians are particularly susceptible.

Lifestyle creep might covertly enter your post-medical school world as a few nicer things here and there … nothing too extravagant. The occasional nicer dinner with friends, a car that regularly starts, and a vacation to a local beach or lake. At this point, everything is fine.

With blinding speed, however, those “nicer things” can morph into German autos, Italian leather goods, a seven-figure home, and vacations to places seen by most only on the Travel Channel.

Why does this matter? In a word, freedom. Living at the level of your income and routinely spending every dollar that enters your bank account will shackle you to your job. Once you become accustomed to a certain standard of living, it’s tremendously difficult to adjust your spending and lifestyle downward. Lifestyle creep will cripple your professional and personal flexibility. Keep in mind your lifestyle simply won’t afford any downward adjustment in income.

How do you not live at the level of your income? Aim to live like (or almost like) you did in medical school during your first few years of practicing. While this might be tough to do, you’ll be glad to discover in a couple of years that your credit card debt is gone, you’ve saved some money, and you started to put yourself on the path to financial freedom.

Realistically, you’ll need to upgrade a few things once you’ve started working, and that’s OK. Just do it discerningly.

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