It's never too late to learn money management skills
Tax time reminds us that despite being high-earners, physicians often over-extend themselves financially, creating a source of stress
It’s tax time, that time of year we all look forward to . . . once we finally have completed our tax forms. I can feel the associated sense of stress myself, and it is definitely palpable in the office among my colleagues. There are those who have not filed a return for many years. Some have filed a return but not paid outstanding taxes for the past few years. Others did not pay their quarterlies and will be scrambling this year. Some of us made more than we expected in the past year and now have to pay more in taxes than expected, unsure from where this money will come. Even those of us who paid our quarterlies on time, have things in order to file the return and do not owe any extra tax still find this process very stressful.
Doctors have an interesting relationship with money. We want it and need it, but don’t feel comfortable talking about it. In the culture of medicine, doctors are supposed to work because we feel a calling, and are dedicated and conscientious. The money is to be seen as secondary, and we are discouraged from any discussion on this matter. In our social culture, doctors are seen as rich and privileged, and so are not widely supported in any conversations about financial remuneration.
Our thoughts and feelings about money are also a product of our past experiences. Take a moment to reflect what money meant to you and your family as a child, because it definitely affects how you feel about money now. Was money an issue for your family? Did your family struggle financially? Were you limited because of financial reasons? Can you think of an incident as a child in which money was a factor? Recognize that this incident will colour how you view money now.
For example, there was a period in my life when money was tight. My father died unexpectedly in a car accident when I was 11 years old. There was no will, and it took some time to clear up the finances. I am sure this is why I now still keep small stashes of money around “just in case,” even though it is no longer an issue. I have $20 bills tucked away in my office drawer, in my car glove compartment, in my kitchen drawer, in my home office desk, in my bedside table drawer . . . you get the point. (Now that my teenagers have found most of my spots, it is safe to write about them!)
Why do we get ourselves in debt? It is not always easy to understand how such a group of intelligent, highly educated, high-earners manage money so poorly. Sometimes it is due to reasons out of our control—change of jobs, illnesses, accidents, change in relationships. However, for some doctors, it is unconsciously self-inflicted. We are too nice, want to please others and seek approval—this makes it hard for us to set limits, makes us unable to say no to people we care about who may want to buy something extravagant, and makes us behave generously with others and, for example, pick up the whole tab at a restaurant.
We may feel insecure and need to prove ourselves—this may lead to a need to buy things that make us seem more secure and successful, such as expensive clothes, jewelry, cars and homes. We are good at delaying gratification and put things off throughout our training and, as a result, we can feel entitled to get exactly what we want and feel we deserve once we finish, and overextend financially. We compare ourselves to our friends who chose other professions and started working years earlier, and want what they have achieved. This continues during our working life, as our work is very stressful and takes so much from us; we can justify “treating ourselves” afterwards. Being self-employed does not help at times, as we can always justify an expense by telling ourselves we can work harder to pay for it later.
This is compounded by the current reality that many medical students graduate with a significant amount of debt. One of the students in my mentor group, who came to medical school after another graduate degree, recently graduated with more than $200,000 in debt! Tuition costs have risen and continue to do so. Bursaries, scholarships and grants have not kept up with this increase. Financial institutions are happy to offer credit cards, loans and lines of credits to these young future earners. It is now the norm for medical students to spend much of their student years living on credit.
This situation is a true source of concern. Money is one of the main reasons why doctors experience such a high degree of stress. They make personal purchasing decisions that put them in a critical financial situation. Thinking about this causes significant stress. They have to keep working and earning to maintain this lifestyle. As a result, they cannot make the changes they may need to make to decrease their stress, such as booking a Monday morning off from clinical work when they return from a holiday to catch up on paperwork, phone calls, lab results, mail and e-mails. In fact, many feel the need to take on extra patients, shifts and call to keep up with their expenses. This extra workload and stress can lead to fatigue, irritability, medical errors, burnout and depression.
Lack of knowledge about finances, or a high debt load, can be a source of shame and embarrassment for some of us. Ironically, it prevents us from reaching out for the financial help or advice we need. Sometimes we may not even know the basics of money management—setting goals, knowing how much we are earning or spending, budgeting, having a savings plan, paying off non-deductible debts first and investing wisely. If you feel this way, it may help to know you are in good company. However, remember that even though you do not know much about money, you have everything it takes to learn!
It is said that the best time to start managing your money was yesterday. The second best time is today. There are many good resources for financial advice available to physicians; call them today. Luckily April always ends, and May brings with it the hope and promise of a new year with more financial control and serenity.
Mamta Gautam is an Ottawa psychiatrist who specializes in treating physician patients. If you have a question you would like addressed in this column, please contact Dr. Gautam at firstname.lastname@example.org. Please include “Helping Hand” in the subject line. All inquiries will be confidential. Your questions will not be replied to, but may be selected to be answered in this column, which is intended to be educational, not therapeutic.