Solve the Scourge of Paycheck to Paycheck

August 3, 2016
DMD Staff

Yes, even dentists often live juuuuust barely within their means.

When I was just starting out in my career, I had this magic number in mind at which everything would be gravy. If I could just earn X, the thinking went, all my expenses would be paid, my investments would be maxed out, and I would have a constant cushion in my bank account. Today, I earn well past X, and while I have made some pretty good progress on my nest egg, I have still been known to squeak by on any given two-week interval.

Dentists and physicians are often lumped in together as being “wealthy,” but the truth is often very different. You’re not alone if you are earning well but might still be counting down the days until the next payday. It can be a very uneasy feeling.

Cut Consumption Before Taking on Debt

Not all debt is bad, of course, and some of it is actually financially responsible, such as low-interest mortgage debt. But certain kinds of debt, including high interest credit cards and the dreaded “payday” loans are not only insidious, they tend to be self-perpetuating. That is, being in more debt makes you more likely to…accumulate more debt.

Before starting down that spiral, consider where you may be able to cut some expenses. Compensation may vary from year to year for many dentists, but for most, it will be easier to make changes on the “liabilities and expenses” side of the ledger than on the “assets” side. If you’re constantly stretching to make it to the next pay period, see where you can reasonably make cuts in your ongoing expenditures.

Put in Extra Effort, Fewer Dollars

Coupons. Groupons. Poupons. Only one of these is a mustard. The other two are really easy to find and to use. Yes, clipping coupons or finding them online can take time, which is often at a premium for busy dentists. But online couponing is really easy, and the savings can be substantial. Two things worth noting: some people who are considered “affluent” might feel a little strange using a coupon. Don’t let that be you. Second, using coupons can cut down on impulse buys at the grocery store, the mall, or even online.

Extra effort doesn’t have to be limited to couponing. You don’t have to be at an auction house, a convention or an estate sale to find a seller willing to negotiate price. It never hurts to ask. And somewhat in the same category, shop around for things like auto or home insurance. Insurance companies are notorious for charging more to dentists and other busy professionals who may be less likely to aggressively shop around. Never assume that your current company is the cheapest, or that changing circumstances—such as a move to new home—might not lead to a lower insurance premium.

Have a Plan

Even if you’re living paycheck to paycheck right now, that doesn’t mean it will be like this forever. If just getting by is stressing you out, take comfort in the fact that your earnings are likely to increase though your late 30s and early 40s, typically peaking for most dentists around age 50 or even higher. But “lifestyle creep” happens throughout those years, too.

What you’ll need, then, is a plan. Developing one will help you in two ways. It will give you some peace of mind and encouragement that the stresses of living barely within your means won’t last forever. And it will also position you best to take advantage of any increase s income. Knowing what your priorities are, and how you plan to meet them, will give you a much better shot of making that plan a reality when your ship eventually does come in.

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