Here are the four most important steps in putting together a financial plan for residents. It's Jon from Financial MD, welcome to today's didactic minute.
Now in my lecture series that I do for the residents across the country, we talk about the roadmap - the four stops on the path to a good financial plan for a young physician; specifically, I'm talking to residents and fellows at the time. And so I thought I would give you a little shortcut if you don't happen to be able to get to those lectures because your residency program doesn't do them – so sad. A lot of residency programs don't teach personal finance so you can take the initiative, you can make a difference, make it happen, and you can borrow our lecture series if you want to do that. But for today, I'm going to give you the first step in this video and we'll do a series of four videos talking about each of the four stops on the financial journey to get on track.
So, number 1 - Cash Flow. What does that mean? It's a big fancy word that most residents, most doctors, don't know what that means. Most people don't know what that means. What is cash flow? So, cash flow is really what's coming in and what's going out, and what I tell the residents in the lectures is most of you know what's coming in. If I asked you what you get paid every two weeks that hit your bank account, you would know. But do you know how much you spend on coffee every month or booze or going out to eat or subscriptions to different streaming services or any of those things? Most people don't know, and so knowing is half the battle. We've all heard that before. So how do we know? Well, hopefully, you don't have money going to so many different places that it's impossible to know. It is possible, and there are tools to help you do that.
So one of the keys we use in the cash flow process of getting a hand on what's coming in and what's going out are apps like Mint; there's an app called You Need A Budget, and both of these apps will connect to your credit card or your checking account and they're going to help you track, categorize, and see your trends in spending every month. So, get that app, link your accounts to it for a month, and just see where is your money going. You don't have to restrain yourself any more than normal necessarily, just give it a good honest month and see where your money's going, and then you can start to figure out how much should you be spending in those different areas. Should you create a budget? What should that budget be? And I know one thing that's cool about Mint – because I use it myself – is that you can put some budgets on there that will alert you when you're starting to get close to spending and hitting that budget ceiling. So, timely conversations as we're talking about debt ceilings. Watch my previous videos if you have questions about that. But that is the main piece of step 1 – cash flow – what is coming in and what is going out. Get better at that and then we can move on to step 2.
So, stay tuned, subscribe, and follow, like this one because this one's going to get a lot of hits hopefully. This is good timely information that is timeless information really. Follow us on YouTube and Instagram as well, unless you're watching this there, and make sure you subscribe to the podcast. We're coming out with episodes every other week, conversations with me and Dr. Trevor Smith, and we will see you guys next time.