Skip to content
  • About
  • Contact
  • Contribute
  • Book
  • Careers
  • Podcast
  • Recommended
  • Speaking
  • All
  • Physician
  • Practice
  • Policy
  • Finance
  • Conditions
  • .edu
  • Patient
  • Meds
  • Tech
  • Social
  • Video
    • All
    • Physician
    • Practice
    • Policy
    • Finance
    • Conditions
    • .edu
    • Patient
    • Meds
    • Tech
    • Social
    • Video
    • About
    • Contact
    • Contribute
    • Book
    • Careers
    • Podcast
    • Recommended
    • Speaking

Automatic savings is one of the best decisions you can make

Altelisha Taylor, MD, MPH
Finance
July 31, 2020
Share
Tweet
Share

When I graduated from medical school, one of the best decisions I made was to set up automatic savings. I made a budget that had about 25 percent taken away in taxes, decided to live on 50 percent of my income, and made the bold move to have the remaining 25 percent placed in an entirely separate account. This account was reserved for building wealth through saving, investing, and paying off debt. It was one of the best things I did and here’s why:

1. It allowed me to grow my emergency fund. One of the best things about having part of my paycheck go into an entirely different bank account was being able to save money in a separate place. Because the money in this account isn’t connected to my checking account, I couldn’t spend it. Month after month, the money just kept adding up, and before I knew it, I had saved thousands of dollars in an emergency fund. I remember looking at the account six months after I started saving and being so proud of myself. It made me even more motivated to keep saving. Plus, it gave me a sense of relief to know that I money to cover unexpected expenses.

2. I started investing early for retirement and building my net worth. Another awesome thing about automatic savings was that I was able to start putting money into my retirement account. Unlike money sitting in my savings account, the money I had automatically deducted from my check for retirement was being invested in a way that would make me even more money in the future. Although retirement may be decades away, I need to start saving and investing now in order to have enough money in those accounts to cover all of my needs. I don’t want to be relying on social security checks from the government trying to make ends meet on a small sum of money when I’m in my 60s, when I could instead invest the money now in a way that would allow me to live the life I want free from financial burdens.

3. I paid off a lot of debt. Regardless of whether you hate debt or don’t mind it, paying it off is like a weight lifted off your shoulders. Although I entered a loan forgiveness program for my student loans, I still had other credit card debt I needed to pay back. Unlike most people who go straight into medical school from undergrad, I lived in Washington, DC for two years before starting medical school. Although that time was rewarding, I racked up lots of credit card debt. (The city was super expensive, and I used credit cards to cover some of my bills since my salary was low.) By the time I left the city, I had thousands of dollars of debt to repay. When I got my first job as a doctor, I had hundreds of dollars automatically withdrawn from my separate account each month to pay off this debt. By the end of my first year as a doctor, I was credit card debt free! Now, instead of spending hundreds of dollars on a credit card payment each month, I’m able to invest even more money towards retirement and raise my net worth.

4. I now have money for vacations, Christmas gifts, and other indulgences. Along with investing for retirement, building my emergency fund, and paying off debt, having a portion of my check automatically sent to a separate account also allowed me to save money for things that bring me joy. I now have some money in a “vacation fund” so I can take trips and create memories with friends without racking up debt. I have also been able to save money each month for Christmas gifts so that my spending in December doesn’t put me in a financial hole for the next year. Plus, I have money saved for expensive purchases like a new phone or laptop should I need it.

5. I learned how to live below my means. I think this is by far the most important lesson I learned. As a physician, my life is a little different from most. I spent many years in school living off of student loans and now must spend a few more years in residency where I’m paid a low salary by the government. However, once I finish residency, my salary quadruples. It’s quite an interesting timeline. Since there’s so much hard work and delayed gratification involved to get to the end goal, it can be very tempting to “not worry about money” and simply get what I want because I know that eventually, I’ll be able to afford it. Although this seems fine, many people with this thought process inflate their lifestyles by too much, rack up lots of debt, and are unable to retire when they’d want to because they didn’t save enough money earlier on in their lives. I don’t want that to be me. Learning to live below my means has taught me to be less materialistic, more giving, and more appreciative of the things I have. It has also helped me learn to be humble and not to compare myself to other people. In other words, living below my means helped make me more mature.

My point? As you can see, automatic savings in a separate account has had many benefits in my life. Although it can be difficult to live on half of my paycheck while others seem to be living a much more lavish lifestyle, I realize that the sacrifices I make now will pay off in the end. Practicing self-discipline by saving money is one of the best decisions I’ve ever made.

Altelisha Taylor is a family medicine resident and can be reached at Career Money Moves. 

Image credit: Shutterstock.com

Prev

In social work, small actions make a big difference

July 31, 2020 Kevin 0
…
Next

International medical graduates are crucial in our battle against COVID-19

July 31, 2020 Kevin 0
…

Tagged as: Practice Management

Post navigation

< Previous Post
In social work, small actions make a big difference
Next Post >
International medical graduates are crucial in our battle against COVID-19

ADVERTISEMENT

More by Altelisha Taylor, MD, MPH

  • 8 questions to ask before you join a new practice

    Altelisha Taylor, MD, MPH
  • 8 things to negotiate besides salary

    Altelisha Taylor, MD, MPH
  • A physician’s money goals for 2022

    Altelisha Taylor, MD, MPH

Related Posts

  • Automatic refill and 90-day fill programs don’t improve medication adherence

    Tony Willoughby, PharmD
  • Administrators who don’t see patients often make the most important decisions

    Matthew Hahn, MD
  • Improving drug adherence will take more than money and technology

    Skeptical Scalpel, MD
  • Patients turn to GoFundMe when money and hope run out

    Mark Zdechlik
  • Improve mental health by improving how we finance health care

    Steven Siegel, MD, PhD
  • Want to change medicine? Work in finance.

    Ryan O’Keefe

More in Finance

  • Decoding your medical bill: What those charges really mean

    Cheryl Spang
  • 5 blind spots that stall physician wealth

    Johnny Medina, MSc
  • The most overlooked skill in medicine: contract negotiation

    Cynthia Chen-Joea, DO, MPH and Peter Baum, DO
  • The business lesson new doctors must unlearn

    Stanley Liu, MD
  • The hidden impact of denials on health care systems

    Diana Ortiz, JD
  • Why physicians are unlike the “average” investor

    David B. Mandell, JD, MBA
  • Most Popular

  • Past Week

    • Forced voicemail and diagnosis codes are endangering patient access to medications

      Arthur Lazarus, MD, MBA | Meds
    • How President Biden’s cognitive health shapes political and legal trust

      Muhamad Aly Rifai, MD | Conditions
    • The One Big Beautiful Bill and the fragile heart of rural health care

      Holland Haynie, MD | Policy
    • America’s ER crisis: Why the system is collapsing from within

      Kristen Cline, BSN, RN | Conditions
    • Why timing, not surgery, determines patient survival

      Michael Karch, MD | Conditions
    • How early meetings and after-hours events penalize physician-mothers

      Samira Jeimy, MD, PhD and Menaka Pai, MD | Physician
  • Past 6 Months

    • Forced voicemail and diagnosis codes are endangering patient access to medications

      Arthur Lazarus, MD, MBA | Meds
    • How President Biden’s cognitive health shapes political and legal trust

      Muhamad Aly Rifai, MD | Conditions
    • Why are medical students turning away from primary care? [PODCAST]

      The Podcast by KevinMD | Podcast
    • The One Big Beautiful Bill and the fragile heart of rural health care

      Holland Haynie, MD | Policy
    • Why “do no harm” might be harming modern medicine

      Sabooh S. Mubbashar, MD | Physician
    • The hidden health risks in the One Big Beautiful Bill Act

      Trevor Lyford, MPH | Policy
  • Recent Posts

    • Beyond burnout: Understanding the triangle of exhaustion [PODCAST]

      The Podcast by KevinMD | Podcast
    • Facing terminal cancer as a doctor and mother

      Kelly Curtin-Hallinan, DO | Conditions
    • Online eye exams spark legal battle over health care access

      Joshua Windham, JD and Daryl James | Policy
    • FDA delays could end vital treatment for rare disease patients

      G. van Londen, MD | Meds
    • Pharmacists are key to expanding Medicaid access to digital therapeutics

      Amanda Matter | Meds
    • Why ADHD in women requires a new approach [PODCAST]

      The Podcast by KevinMD | Podcast

Subscribe to KevinMD and never miss a story!

Get free updates delivered free to your inbox.


Find jobs at
Careers by KevinMD.com

Search thousands of physician, PA, NP, and CRNA jobs now.

Learn more

Leave a Comment

Founded in 2004 by Kevin Pho, MD, KevinMD.com is the web’s leading platform where physicians, advanced practitioners, nurses, medical students, and patients share their insight and tell their stories.

Social

  • Like on Facebook
  • Follow on Twitter
  • Connect on Linkedin
  • Subscribe on Youtube
  • Instagram

ADVERTISEMENT

  • Most Popular

  • Past Week

    • Forced voicemail and diagnosis codes are endangering patient access to medications

      Arthur Lazarus, MD, MBA | Meds
    • How President Biden’s cognitive health shapes political and legal trust

      Muhamad Aly Rifai, MD | Conditions
    • The One Big Beautiful Bill and the fragile heart of rural health care

      Holland Haynie, MD | Policy
    • America’s ER crisis: Why the system is collapsing from within

      Kristen Cline, BSN, RN | Conditions
    • Why timing, not surgery, determines patient survival

      Michael Karch, MD | Conditions
    • How early meetings and after-hours events penalize physician-mothers

      Samira Jeimy, MD, PhD and Menaka Pai, MD | Physician
  • Past 6 Months

    • Forced voicemail and diagnosis codes are endangering patient access to medications

      Arthur Lazarus, MD, MBA | Meds
    • How President Biden’s cognitive health shapes political and legal trust

      Muhamad Aly Rifai, MD | Conditions
    • Why are medical students turning away from primary care? [PODCAST]

      The Podcast by KevinMD | Podcast
    • The One Big Beautiful Bill and the fragile heart of rural health care

      Holland Haynie, MD | Policy
    • Why “do no harm” might be harming modern medicine

      Sabooh S. Mubbashar, MD | Physician
    • The hidden health risks in the One Big Beautiful Bill Act

      Trevor Lyford, MPH | Policy
  • Recent Posts

    • Beyond burnout: Understanding the triangle of exhaustion [PODCAST]

      The Podcast by KevinMD | Podcast
    • Facing terminal cancer as a doctor and mother

      Kelly Curtin-Hallinan, DO | Conditions
    • Online eye exams spark legal battle over health care access

      Joshua Windham, JD and Daryl James | Policy
    • FDA delays could end vital treatment for rare disease patients

      G. van Londen, MD | Meds
    • Pharmacists are key to expanding Medicaid access to digital therapeutics

      Amanda Matter | Meds
    • Why ADHD in women requires a new approach [PODCAST]

      The Podcast by KevinMD | Podcast

MedPage Today Professional

An Everyday Health Property Medpage Today
  • Terms of Use | Disclaimer
  • Privacy Policy
  • DMCA Policy
All Content © KevinMD, LLC
Site by Outthink Group

Leave a Comment

Comments are moderated before they are published. Please read the comment policy.

Loading Comments...