This week my wife and I celebrated our 31st wedding anniversary. It made me think about how my life has changed from when I was a single freshman in college. A time when I didn’t always do the right thing. I knew it was against both the law and school policy to drink alcohol at my age during a frat party, but I sometimes did it anyway.

We know we have moved into adulting, when we start doing the right things because they are the right things and not because someone else told us to do them. Like the first time I got a haircut on my own initiative. I still remember that day.

Money works the same way. There are things the unlearned freshman does with money that are different from what the “wizened” adult does. Even though we may be adults in some areas, like diagnosing patients, we might not be adulting in other areas, like money. Let’s look at a few examples and see where you fall with money: Adult or Freshman?

Many a physician finishes training and is suddenly unleased upon the world with a large attending salary. Many of us do not handle that moment very well. We spend lavishly on a few things that we have been postponing due to a lack of income. We often make moves that actually hurt our financial position for years. Hopefully, at some point, we realize it’s time to grow up financially. Here are some of the signs that you have moved into adulting with your money.

You have listed your financial goals and are making progress in attaining them

This is a big one. Freshmen do not list their goals and make plans to reach them. They tend to live for today, and figure tomorrow will take care of itself. That’s why they end up pulling all-nighters cramming for tests or finishing papers. The problem with putting off working toward your goals is that as each year goes by, the ability to attain a long-term goal lessens. The deadline to achieving the goal keeps getting closer, but we are not any closer to completing any of our goals. You can’t pull an all-nighter with your finances.

List what goals you want to achieve in your lifetime. If you are not familiar with how to do that, read my article about making SMARTER Goals called The Secret Sauce of Goal Achievement.  Then get busy working to achieve those goals.

Freshmen say they want to go on a vacation to Paris next year, but nothing changes financially in their lives this month to enable them to take a trip to Paris. People who are adulting with their money who make the same statement, back it up with action. They calculate how much the trip will cost and start putting a portion of each paycheck into a bank account, so when the time comes to go on vacation, they have enough saved to go.

Not only do you need to list out the goals you want to achieve, but action must be taken for them to actually happen.

The important stuff gets paid first

Those who are still freshmen with their money, fly by the seat of their pants. Whatever expense screams the loudest, gets paid. The rest of their bills are set aside to be paid later, enabling them to spend their money on things they want now.

You know you are adulting when you have covered the important expenses before you start blowing your cash. Rent gets paid before you go partying.

Adulting means getting the right amount of own occupation disability insurance and term life insurance. Getting a plan started to quickly pay off student loans. These loans should not be hanging over your head for longer than the time you spent acquiring them. Setting up retirement accounts and starting to fill them up would also be considered adulting.

These are all things that must be put in place before buying a new car or a dream house. A sure sign that you are not adulting is having a car payment, but no disability insurance.

When you are adulting, you don’t use credit like candy

Freshmen like candy (or beer). Quick reward with sweet juicy results. When this gets applied to finance, it looks like pulling a credit card out to buy something you really want but don’t have the money to acquire.

This is a big problem with HENRYs. The people who are High Earners, Not Rich Yet. They like the quick fix of purchasing everything they want immediately, not waiting until they can afford it. See a car you want? Just sign a few papers and drive it home. Throw that loan onto the pile, and I’ll deal with it later. Want a trip to the beach? Just pull out the card and charge it. TV not big enough? A quick trip to Walmart with a credit card, and we can watch that game on a new 104-inch big screen. But the quick fix effect doesn’t last forever.

When you are adulting, you see something you want and check to see if you can afford it. If you don’t have the money, you start saving for it. Adult behavior is to responsibly purchase the things you can afford, when you can afford them. Just because you want it now, doesn’t mean you get it now.

Maximize your career

Another sure sign that you are now adulting is to maximize your effectiveness in your career. Adults will do continuing education to be sure they stay on top of their game. They work to be the best at what they do.

Freshmen believe they have arrived. They know everything and don’t need to study anymore.

The most effective way to earn money as a physician, is to be a good physician and put in more hours. Do a good job. Establish a good reputation. Be punctual. Be an AAA doctor: Able, Available, and Affable.

Often you don’t need a side job to earn more money; you can increase your income by simply doing more in your current career. Take or do one more case. Open the office for one more hour a day. Take an extra shift to pay off the student loans faster. Take someone else’s call night.

Physicians make a good income, so their own job is the first place to look to make some extra money. When you are adulting, you are working to be the best you can be at what you do.

Automate your savings

One important thing to remember is that you will not become wealthy by accident. Acquiring wealth takes planning.

When you are adulting, you start regularly contributing to your retirement plan with each paycheck. Tell the payroll department to put the maximum amount into your retirement plan every paycheck. If it is automated, you will never miss the money, and you will become an automatic millionaire.

Freshmen don’t like to contribute to a retirement plan because they want all their money to spend now. They feel that there will be plenty of time to save for retirement later. They are missing the time value of money.

Don’t get used to living on all your income. If you do, all your income will be used to pay for your big house, your new car, and your travels, and there will not be anything left to save. Freshmen in finance save what is leftover, if there is any. The problem is there is never any money left over. That’s why you need to pay yourself first and make it automatic.

If you remain a financial freshman all your life, you will retire to pizza boxes, a bike with no chain, and a rusted hibachi grill on the front porch. If you start adulting, you will retire with the same or better lifestyle you lived while working. The choice is yours.

So how are you doing? Are you adulting with your money, or are you squandering it like a freshman?  Time to grow up and start living like an adult if you haven’t already.

The funny thing is, physicians are usually adulting in almost every other aspect of their life except money. It’s time to make it a clean sweep: Start adulting with money and brighten your financial future.

Cory Fawcett is a general surgeon and can be reached at his self-titled site, Dr. Cory S. Fawcett.  He is the author of The Doctors Guide to Real Estate Investing for Busy Professionals, The Doctors Guide to Starting Your Practice Right, The Doctors Guide to Eliminating Debt, and The Doctors Guide to Smart Career Alternatives and Retirement.

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