You may never have created a budget. Not everyone does. For many of us in medicine, our saving so completely dwarfs our spending that we’ve never needed to use a budget. We just wing it. Why do some physicians spend so little?

Spending money is hard for many people, including physicians. After years of frugality in education and training, then funneling money into investments, planning for the future, building life for later, many physicians have an undeveloped sense of how to spend money. Spending money provokes substantial anxiety. Unfortunately, the anxiety associated with spending prevents many physicians from doing things that will make them happy.

In his excellent book, I Will Teach You To Be Rich, Ramit Sethi suggests approaching wealth in terms of accumulating things and experiences that make you personally feel rich rather than on things rich people supposedly do. For you, feeling rich might be expensive dinners or clothes or even giving money to charity. It might be traveling often or only flying first class. It might not include any of these things. It is unique and personal and should not be influenced by what other people are doing. He calls this the “rich life.” Carefully thinking about what you would include in your rich life will ultimately help you determine where spending your money will increase your happiness.

So, now that you’ve figured out what will make you feel rich, when is it okay to start spending money on it? This is an incredibly difficult question for physicians who’ve never created a budget.

Spend-averse physicians live a life of financial ambivalence where investing is meticulously organized while spending is opaque and terrifying. Many physicians, especially supersavers, have never considered spending at all (let alone how much they’ll spend after retirement).

Let’s use FIRE (Financial Independence/Retire Early) and Fat FIRE (Fat FIRE is FIRE with a bigger number) calculators to dissect the spending aspect of wealth.

There are many, many free calculators available through a simple search. Physician on Fire has a list of great calculators (as well as a great article about post-retirement spending). Wallet Burst has calculators focused on Fat FIRE (reaching a big number) and Coast FIRE (coasting into FIRE). All are valuable, but all start with the premise that you’re interested in saving more and are already spending the right amount. Despite not accounting for physicians in spending gridlock, the calculators can also be used to decrease anxiety associated with spending money.

Let’s begin with the assumption that the financially savvy physician reader is well on her way to FIRE then we’ll plug some spending numbers into the Fat FIRE calculator (please note that the box with “Annual Salary” doesn’t actually impact the final numbers, so it is left blank):

We start with the assumption above that the spend-averse physician has $1.8 million in various stocks and bonds and expects a conservative rate of return of 5 percent. She ostensibly continues to invest $40,000 each year after taking home $100,000 after taxes and living on $60,000 per year. Even investing only $40,000 per year, she is set to reach $2.5 million in investments in 9 years, which will yield $100,000 yearly in perpetuity. That’s pretty solid and suggests she could retire in 9 years, earn no additional income, and spend significantly more than she did pre-retirement. Add an additional $40,000 in savings per year, and he/she’ll reach the same point a couple of years earlier:

It’s important to note that the inflation rate is critically important to reaching a particular number. Notice that changing 3 percent to 5 percent inflation prevents her from reaching her initial goal of $2.5 million unless your income growth rate keeps up with it. That being said, even with no change in income growth rate, she still reaches about $2.1 million (and a little under $85,000 per year to spend).

Considering the above, what can we learn from the Fat FIRE calculator? We learn that, once a physician accumulates enough for a comfortable cushion, she may be able to spend comfortably without anxiety and without running out of money. That should be reassuring.

Next, in the above scenario, our physician is now spending every penny she makes and saving nothing from the same starting point. She’ll have to work for a few extra years while coasting into Fat FIRE(barring any negative influences that can’t be controlled like market returns and inflation, of course), but she’ll be spending (and living) at her Fat FIRE level during that time rather than continuing to save excessively and living a life filled with spending anxiety.

Assuming we’ve carefully considered our rich lives and we don’t hate our jobs too much, we should feel pretty great being able to coast into perpetual Fat FIRE while spending money on things that make us happy. This promises extra years of happiness. Then, suppose employment is the major detractor from happiness. In that case, it’s clear we can reconsider our employment situation in favor of something that increases our happiness more (like different employment or retirement).

Carefully considering both our saving and our spending, the average physician can have enough saved to eventually reach FIRE/Fat FIRE without excessive and perpetual saving while spending on many things that will make her happy.

Once you’ve figured out the things that’ll make you happy and how much they cost, plug a few scenarios into these calculators to reassure yourself that you can spend some of your money rather than needing to save all of it in excess and in perpetuity. Start living your personal rich life as soon as possible!

Andrew M. Ramsey is an emergency physician.

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