Part V of our series on holistic physician well-being.
Financial instability is a common concern for physicians and the general population alike, and many times, it becomes a hindrance toward the path to holistic well-being. When physicians take time to fully understand their finances and create actionable plans for increased stability, they are able to alleviate many of the associated fears and challenges and ultimately reach a place of financial wellness.
At Curi, we believe there are three key components driving financial instability that are often under-appreciated and unaddressed:
- Lack of cash savings to absorb financial blows: Oftentimes, people will get so wrapped up in expenses in the here-and-now that they will forget to save for a “rainy day.” Negative circumstances will likely emerge multiple times throughout our lives, such as major repairs on homes and appliances, unexpected unemployment, and expensive medical issues. These events can happen to anyone and any time, and maintaining a healthy cash savings can help offset unexpected costs. A general rule of thumb for cash savings in a readily-accessible account are as follows:
- Dual-income married couples should maintain cash savings of three months of gross financial spending.
- Single individuals should maintain cash savings of six months of gross financial spending.
- Retired couples and retired individuals should maintain cash savings of 12-18 months of gross financial spending.
- No spending or budgeting plan: Many people simply don’t know how much they are truly spending month-to-month. Breaking down 30 days of spending (without judgement) will generate greater financial awareness to help individuals understand how much they should save based on gross outflow.
- Inability to manage debt: Understanding your current debt situation is important for creating a budget that falls within your means. This could include mortgage, car loans, student loans, and alimony/child support. Physicians, in particular, are often subject to high student loan costs as compared to the general population, which can cause added stress when attempting to budget finances.
It’s important to understand that these types of expenses can be paid over time, and should not impede retirement and cash savings. For example, by extending the term of student loans, you may be able to allocate more resources to retirement savings, resulting in compounding investment growth and greater flexibility with short-term cash flow.
Money and Manners: The Ultimate Taboo Subject
Money, sex, and politics—the three topics you inherently know to avoid in daily conversation.
But by allowing finances to be such a taboo topic, do we lose a sense of community and support? Nearly all the pillars of wellness—be it emotional, spiritual, or physical—include some level of help and encouragement from the outside community. Given that you may not be able to rely upon friends, coworkers, and family to support your efforts to achieve personal financial stability, it’s important to seek out new avenues for encouragement and assistance in this facet of well-being.
Seeking Out Your Financial “Safe Space”
When we break down the topic of personal finances to its core, we find that this subject sits at the intersection of math and emotions, making it particularly difficult to navigate on our own. Seeking out assistance can be a healthy decision for anyone attempting to take back control of their finances and alleviate some of the ambiguity and stress associated with this pillar of well-being.
Financial advisers and planners are an excellent place to start. Their job is to listen to your concerns to turn your goals into actionable plans that will help kickstart and maintain financial wellness both now and in the future.
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Curi’s resources to help physicians and their practices prepare for Coronavirus spread, including comprehensive telehealth and disaster planning guidance.