215: Taking Control of Your Money: A Simple Starting Point

Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it, and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I’m your host, Dr. Bonnie Koo.

Hey everyone, I hope you had a great week. By the time you’re listening to this I am super excited to present today’s topic. You know, I realized that it’s been a while since I’ve kind of gone back to the basics. So whether you’re new or not, I think this will be really helpful to kind of give you a framework for how I want you to think about and approach money. 

This will be especially great for those of you who are new and have been wanting a sort of step-by-step framework of how I think about money and how I approach money. 

And the first thing I want to say before I start is that it’s going to change over time. And I was actually thinking that I need to do an episode about how my money beliefs, how I approach money, how I invest has evolved since I started, which was back in, I don’t know, 2015 because that’s when I finished residency, it was around that time. And so that was like what, nine years ago? 

And one thing for sure is that you will change, you will evolve, you’re going to have new experiences, you’re going to have just new insights when it comes to every area of your life. And so I just wanted to say that, and this is where I’m at in terms of my approach with money and I’m really excited to kind of go over this with you. 

Okay, so basically what I want to do in this episode is basically how to get started with money as a female physician. And so one thing that I do know after having coached so many of you, speaking et cetera, is that it is so common for you, for female physicians to feel overwhelmed when it comes to money. And what I mean by that is, yes, I know it’s important. Yes, I need to do something, and I have no idea where to start. And it just seems daunting. And honestly, that’s one of the reasons it’s so easy to ignore. 

And so if this is you, you’re normal. I see this all the time in my work. And I want to just start with that because I think there can be some shame or even embarrassment that you may not have fully dove into your finances, and so I just want to let you know you’re not alone. And I was there as well. 

In fact, let me share a bit of my background. And so I basically, it’s not like I didn’t know anything. I was paying bills, I’m sure you were doing that too, et cetera. But I never understood why I always ran out of money. I just assumed it was because I didn’t have enough. And that is true to some degree, but the amount of money you make very rarely corresponds to your ability to spend within your means. 

And so as a resident, I definitely lived paycheck to paycheck. And it was almost worse because we only got paid once a month. And so, you know, versus like getting paid every two weeks where you’ve got a little influx into it every two weeks, obviously. And so it wasn’t uncommon for me to run out or even overdraft my account a little bit. Okay? Like I was one of those people. I definitely was an overspender in certain areas of my life. And I had racked up a lot of credit card debt by the time I finished all of my training. 

So that’s sort of where I was starting from. I didn’t understand how important investing was. And to me, it really was like, oh, I know I’m supposed to invest in the stock market, but that was the paradigm that I was taught in the beginning. And again, that’s one of those things that has changed over time as I’ve learned more about making your money work for you faster than the stock market. 

But that’s where I started, okay? I started there. I started in terms of thinking that I had to pay off my debt as fast as I could. If you’ve been following me for a while, you know, that is sort of not what I preach now. And so we all start somewhere and that’s where I was starting from when I first started learning. Okay? 

And so before I go into like the actual steps that I want you to take, I want to take a step back because, as you know, I talk a lot about mindset, how we think about money, how we’ve been conditioned. And it’s really important to examine this because if you don’t know sort of your mindset blocks around money, it’s actually going to be harder for you to get going and do the actual practical get in the weeds type of stuff. 

And it’s also going to affect what you think you’re capable of in terms of how much money you want to have, what kind of life you want to live. And so knowing what your current thoughts about money, how you think about money, your current lens, it’s just important to know where you’re at. 

And to give you some examples about me, I just assumed I was always going to struggle with money. And I don’t necessarily mean not having enough, because as physicians we are blessed and privileged to be making a great income, no matter what specialty you are, right? And I just assumed that I would never be able to really live the life that I want, that I was always going to be thinking I could save more or can’t retire till I’m 65 or 70. 

When I did my initial calculations, that’s basically what it told me and it was quite depressing, to be honest. And so I just assumed I was always going to have that sort of, and I wasn’t even thinking it was a mindset. It just seemed like the truth to me, okay? And probably the most common thing I hear is I can never be rich, whatever that means to you, because I am a family medicine doctor, I am a pediatrician. So I want you to notice if you have some version of that belief in your brain. 

And notice I said belief because it is not a fact. Okay? And so if you’re starting to argue with me in your head, it’s okay. I just want you to consider, what if it actually isn’t true? And let me remind you, you don’t want it to be true, right? Because it really limits what you can do. And so often we are actually putting ourselves in this box. I know it may not seem this way. It may seem like, no, this is really how it is. And you know, I got divorced or XYZ. And so I just want you to consider just for a few seconds that it may not actually be a truth that you need to live your life by. Okay. 

Now, the way you think about money, like I said, with all things it’s going to change and evolve over time. And so I don’t want you to think that you have to figure it all out and change into this, like money is everywhere and of course I can have it all. You probably aren’t going to get there on day one. And I don’t really think that should be a goal. I want you to just make a little bit of progress, a few steps in the direction where you’re feeling a little better about money, because that’s all it takes. It’s like one step at a time. 

And I always want to remind my clients and the women that I work with and that I speak to, one little step at a time. And over time that all compounds. And I am making a pun with compound interest because it is true. I have seen this all the time with the people that I work with. It may seem like, oh, I’m just taking little steps and it’s hard and I’m scared, you know, wherever they might be. And months later, a year later, you can be in a completely different place just because you had the courage and motivation to take that first step. 

Now let’s move on to some practical things of how I want you to approach money. So the first step is you need to know what your numbers are. I want you to think about, you know, if you’re trying to lose weight, you need to know what you weigh. You need to get on the scale. So I want you to think about this as getting on the scale. Getting on the scale. And I will say this can be difficult for most of the clients I work with. 

This is the part that people want to skip over and they just want to go right into how do I grow my money? Which is way more fun, right? Of course, like everyone wants to know how to grow their money. And that is fun, but you need to know where you’re starting from. And so what I mean by understanding your numbers is just knowing what all your accounts are, how to log into them, what the balances are. 

There’s that part, just like where is my money right now? What accounts do I have? I have seen people realize that there were accounts they forgot about. Now, what I mean by that is you’re probably thinking like, how do you forget that you have money somewhere? It’s not uncommon as physicians for us to have multiple jobs, and I’m including residency as one of them. And so that’s part of understanding where it’s like, where is the money? Where are the numbers? 

And then we have to think about our spending plan. Now, as you know, I talk about cash flow, spending, and budgeting. They’re all the same thing to me. I like to use the word spending plan because the words you use matter. Personally, I think the word budget generally has a negative connotation. It’s like the equivalent of a diet, and nobody likes diets and nobody likes the idea of having to cut down on something. Right? 

And so what it really is, is how are you spending the money that you’re getting with every paycheck? Okay? That’s what I mean by a spending plan. And it’s also easy to go right into, okay, what’s the plan that I’m going to create? What are the line items? Like what is my rent or mortgage and et cetera, et cetera. But there’s actually a really important step before we even get into this. 

And I should have mentioned it before, but let me just take a step back. You need to know your vision. You need to know what is the life that I want, because you have to understand that money is a means to an end. Your money goal has to be intimately tied to what kind of life that you want to live. 

And so what that means is you need to take stock of where you are in life. And there are several areas, and if you Google life wheel, you’ll see the main areas. It’s relationships, it’s your career/business, whatever you do to generate money, it’s spiritual or religion depending on where you are with that, physical fitness, emotional fitness or health, hobbies, contribution or philanthropy. 

So those are sort of like the main areas. And when I say relationships, you can subdivide it into your spouse if you have one, your children if you have one, your friendships, it could be your work relationships, right? So you can really subdivide that. And it’s like taking stock of all that and how do I actually want my life to look like? 

And I often find a lot of you may not actually know because most of us haven’t asked this question. Most of us, people just haven’t asked us about this, right? It’s like, we stopped thinking about this almost as children, right? We’re always asking children like, what do you want to be when you grow up? But that’s more of a career thing, but what do you want your life to look like? 

Do you like the way your life is now? Most people will know what they want to stop doing? What do you want to do less of? I find that that is often an easier question to start with. And so what would you like to do less of? You probably know what those answers are right away. And then you can kind of reverse engineer. Okay, I want to do less of this, but why? 

I should probably do another episode about how to even do all this, but I think you can get that you need to know where you’re going in terms of how you want your life to look like. And you may find that you actually do have the life you look like, because that’s going to be a very different conversation about how to set up your money. 

So, okay, going back into understanding your numbers, because your spending plan is going to be built to reach your money goals. And those money goals, like I said, money is a means to an end. It’s to help you to live the life that you want, or to keep living the life that you want. 

And I want you to keep in mind, life is in seasons, right? If you have young children, like I do, you are in a pretty expensive phase of life, right? And so you have to realize that there are seasons of life and your spending needs will change over time. Okay? If you’re a parent, you know that most of us will want to launch our kids and for them to be financially independent and productive members of society, right? 

Okay, so I’m not going to go into how to create a spending plan because I have so many episodes talking about that and we will put them in the show notes. I especially want you to listen to my recent podcast with Nick True, where we talk about spending plans and how we think about them. And we’re going to talk a lot about how important it is to know your vision and what’s important to you and what you want to spend your money on because it’s so easy to spend your money on things that actually aren’t that important to you. 

And this is where really understanding your numbers in terms of how have I been spending my money? Does it align with how I want to actually live my life right now and in the future? And so this is where you’re basically auditing how you’re spending. And like I’ve said many times before, the best program, in my opinion, for spending plans is YNAB, Y-N-A-B. It stands for, you need a budget. I’ll put a link to that as well. 

Once you understand your numbers, then you can create a spending plan that will help you move forward. And then we’re going to put a pin on that because you’re probably going to have to go back to your spending plan after you think about how you want to grow your money. 

Okay, so remember you’re going to have a vision. It doesn’t have to be crystal clear. I don’t want you to think you have to know exactly what you want at certain ages of your life. You just want to have an idea. Obviously the more specific you can be, the better. But I just want you to start thinking about it and start writing down some notes. 

And this is something that’s going to change and you’ll revisit. And so if you are married or have a partner, this is something obviously that would be a great discussion as a couple and a great idea for a couple’s retreat, right? 

So then we have to do some, what I call financial adulting. And so this is where you’re going to continue to take inventory of where your money is, if you haven’t done that already. Remember, I meant logins, passwords, just knowing where everything is. And in my program, Money For Women Physicians, I provide a pretty robust spreadsheet template where you can enter all this stuff. And then it also serves as a great estate planning tool. So you want to have all that stuff organized, okay? 

And then you want to know where your investment accounts are. Now, I will say pretty much everyone I work with will have some form of a retirement account. And so we want to know how much is in there, how they’re being invested, and if you want to change how they’re being invested, okay? Decide, well, how much do I actually want to put away every year? 

If you’re prioritizing stock investments, notice I said if you’re prioritizing stock investments, because there are many ways to grow your money. And one of my goals is for you to know all the many ways that you can grow your money besides the stock market. There’s nothing wrong if that’s how you want to get to your money goals. It is pretty hands-off if you’re doing mutual fund investing. And it’s also a very slow way. 

So if you want a faster way to grow your money or to have capital to invest, then you’re going to have to do something different, right? That just makes sense. You’re going to have to do something different. And there are many ways to do that. And if you’re a listener, you’ll know that I have episodes ranging from real estate, expert witnessing. I’ve talked about my business. I’ve had guests talking about their businesses. 

So many ways to do this. I would probably say most of my clients end up doing some form of real estate. And then actually quite a few end up starting some sort of side gig or business. And this doesn’t mean that you have to do that, but being a physician there are so many ways we can help people. And so I always want to remind you how valuable your brain is, how valuable the knowledge in your head is. 

And there are so many ways that you can create value and get compensated for that by using the knowledge you already have and maybe even combining it with a passion. And so I can give you so many examples, but for example, many of you know that I’ve worked with a parent coach. I actually have had her on. It’s the episode with Hope Seidel, and she’s a pediatrician. She just retired and she is now a parent coach. And so it’s such a natural thing to do as a pediatrician. 

You don’t have to be a pediatrician to be a parent coach, but it’s something she noticed that she was doing a lot anyway. And if you’re a pediatrician, you definitely know you definitely are a parent coach already, by the way. And so she wanted to hone her skills and she got some additional training in how to do that. 

So that’s just one example. There’s so many other examples. In fact, I just saw on my Facebook feed recently, someone that I know just through my network had been working on a patent, an invention. And she, I believe she’s a pediatrician too. And so she just noticed a problem, I think she created a nasal aspirator. And she noticed like the ones on the market, she felt that she could make a better one. And so she ended up inventing one. I just saw her post that it’s available for sale. And so like, how cool is that? 

Again, I’m not saying you have to invent something, but I bet there’s a problem that you’re noticing that you probably have a solution to. And it’s possible that that solution is something people are willing to pay you for, right? And so I just want you to think about how else could you bring in money besides seeing more patients. 

If you don’t want to start a business, how else could you bring in money that wouldn’t necessarily be a unit to unit increase of the time and effort you’re putting in now? Because of course, if you see more patients, you can make more money, right? But that’s not necessarily something that’s sustainable. Okay. 

I do have a lot of, I was going to say patients, clients who will do that temporarily because they want to have capital to do something with. Again, it’s all about what is your goal? What are you willing to do, right? Because some of us there are certain things that you’re not willing to do. Like you might be like, I’m not willing to work an extra day a week in order to reach my money goals. And so the question for you, if that’s you, is well, how can I do it? Because it’s going to require you to do something different, okay? 

Now, I know this might seem obvious, but if you are not where you’re at money goal wise, then I just want you to realize that this is going to require you to do something different, probably something new, probably something that feels scary. And that’s normal and it’s okay. And it’s all expected. And this is where knowing where your mindset is is so important, right? It always comes back to your mindset because that is what’s going to influence what you do and don’t do, and frankly, what you think you’re capable of, right? 

So we were talking about investment accounts and figuring out how to grow your money, because if you don’t figure out how to grow your money that will help you reach your goals, you will be working forever. Actually I was like thinking there’s a second answer, but really there isn’t. You’ll be working forever unless you win the lottery or marry rich or get a windfall of some sort, right? Which you can’t count on, unfortunately. 

So if you don’t figure out a way to make money in your sleep while you’re not actively working, then you will be working forever. And I think that just makes sense, right? And what I mean by that is making money while you sleep doesn’t just happen on day two. I wish it’s true. You’re going to have to put some initial time and effort into doing this. 

And this is where I often find a lot of my clients where they have some resistance to this. But here’s the flip side, if you don’t decide to do something like this, you will be doing what you currently do forever in terms of making the amount of money that you want. So I want you to think about that for a second because people will often say, well, real estate seems like a lot of work. It is at first. And the reason why is like, you don’t know how to do it. Most likely you need to learn how to do it. Then you need to do it. And there’s a learning curve, of course there is. 

But it’s not like, I’m talking about like, you’re seeing patients traditionally in terms of like fee for service, it’s not going to change unless you practice medicine differently. Right? And so you will only get paid a certain amount based on the service you’re providing. And it’s kind of linear, like direct time and effort per unit of money made. Okay? I hope that makes sense. 

Whereas if you figure out a way to make money that isn’t directly tied to a unit of time and effort to make a unit of money, that’s what I want you to figure out. That’s what I help people do, right? And so initially there might be a lot of time and effort, but it’s not going to always be that amount of time and effort. It’s going to decrease over time, and yet the money will still come. 

I wish I could show you a graph of what I mean, but hopefully you understand what I’m saying. And let me give you an example of that. When I am, for example, actively selling my conference and then actively planning it and delivering those programs, there is time and effort involved in that. Of course, right? But there are periods of time throughout the year where I’m actually not doing that much work, right? 

Many of you know, I went to Greece for a month and before that, I think I went away for another two weeks. I moved, I’ve been spending a lot of time recently just getting my family settled, helping my son to settle into school and getting his sort of whole support team into place. He gets speech and OT and he has a reading tutor right now. And I have not been doing anywhere near the amount of work that I was doing earlier in this year when I was running my program and running the conference. And I was still making money. There was still money coming into my bank account. 

You want to start to uncouple that direct relationship from your time and effort to the amount of money that comes in, because most of you right now, if you don’t work, you don’t make money. And that is just not a great place to be for the rest of your life because things will happen. You’re going to want to take a break. You might need to take a break. You might not even have a choice. And so it is worth putting in that time and effort so that in the future you don’t always have to. 

So that’s the main piece. And then of course, in terms of financial adulting, having the proper insurances in place and your estate plan in place. Now, this is something that is so important. The insurances are relatively easy because I will teach you what the insurances are that you really should have. And it’s, you know, basically financial catastrophic insurance, right? Because you probably, you know, when you’re early in your wealth building, you need life insurance. Most of you know you need malpractice, you most likely have that already. The right auto insurance, umbrella, et cetera, et cetera. 

So there are things that you want to consider depending on your life circumstances, et cetera, and who depends on you for money. And estate planning, especially important if you have kids. This is definitely the thing I see a lot of my clients put off because it’s like, it’s on the important but not urgent task on your list of many things to do, except you don’t know when you’re going to pass. You don’t know when you’re going to die. And obviously if you die, it’s too late. 

And so I cannot underestimate how important this is, especially if you have children. And if any of you have had a parent pass, and I think that the statistic is something like more than half of Americans die without an estate plan. If you have dealt with a parent who did not have their stuff in order, you know how difficult it is for someone else to pick up the pieces. 

So that’s sort of how I want you to think about the money pieces that you need in place. And then this is not a one and done thing, right? You’re going to keep learning. You’re going to keep figuring out how to grow your money because that’ll change. I guarantee you it will most likely change, because your goals will change. 

As you dive into this world of growing your money, you’re going to meet people who are doing similar things or different things, you’re going to get ideas. And what you believe you’re capable of will increase and change over time, I guarantee it, which means you’ll need to make some new plans. And this is a good thing, okay. 

And so I know some of you might be thinking, okay, that was a lot. Again, baby steps. What is the first thing that you can do today? I think one of the easiest things you can do to get started is to just sit down one day, like literally set a timer for one hour and make a list of your accounts and put them in a spreadsheet, right? If you already know what they are, maybe you have a password manager like I do where all the accounts are there, the logins are saved or you already have it in a spreadsheet. Fantastic. 

Then it’s looking at your spending plan. Now, again, I know that’s kind of like a deep abyss of like, what does that even mean? And so I will reference some of the episodes I have of how I want you to think about your spending plan. But I also want you to think about your mindset. 

Now, actually, as I’m talking about this I realized I actually have a podcast guide. I actually have curated a list of podcast episodes that loosely follow the steps I just outlined. So you definitely want to make sure and grab that. We’ll put that in the show notes, but you can also get it at wealthymommd.com/podcast. 

And so I understand that learning this new language of money, actually doing all the action steps required can feel daunting and honestly feel a little lonely if you’re doing it by yourself. And so that’s one of the reasons I created Money For Women Physicians. It is my signature program where I teach you everything I just talked about on this episode from A to Z. I guide you step-by-step. You have me helping you and you’ll have a community of other female physicians who want to do the same thing. 

And actually the best part of being with other female physicians is you get to learn about what their goals are. And you’re like, oh, that sounds cool. And you’re going to have new ideas just by being in this community. Okay. 

This is a three month coaching program. It’s an online course with live coaching, live Q&A where I help you create your vision, figure out where your money mindset is, make a plan of how to improve it and think bigger, create your vision, look at your numbers, create your spending plan, figure out how to grow your money and what type of wealth creation vehicle makes sense for where you’re at right now. And then of course, making sure you have the proper insurances and estate planning. 

There’s a lot of education because again, this is something that you were not taught in school. And so I’ve really wanted to create a one-stop shopping place where you can get all of this, what I call financial literacy, like 101 and 102 in one place so you don’t have to keep digging for things. 

And so if this sounds like something you would love help with, if you would love to learn how to grow your wealth without confusion and overwhelm, if you want to gain confidence to make informed financial decisions, if you want to get clear and create a clear, actionable financial plan, again, tailored to your goals and vision, and if you want to break free from the paycheck to paycheck cycle and take control of your money, then I want to invite you to join our fall cohort 2024 of Money For Women Physicians. 

We’re going to start the second week of October. To learn more and enroll, you want to go to wealthymommd.com/money. Again, that’s wealthymommd.com/money, or just go to the website, wealthymommd.com and you’ll see a link to learn more about the program. Spots are limited to make sure that you get the attention that you need. And there also is an opportunity to work more closely with me, you can think of it as the VIP package. 

And so I hope you will join us. Enrollment will open on September 24th. You can join the waitlist now, and you’ll be the first person to learn about it and get access to some special bonuses that will likely sell out just from the waitlist itself. 

Again, wealthymommd.com/money. I hope this episode was helpful for you. Make sure to get the podcast guide and to review the show notes. And I really, really want to encourage you to start taking steps because I promise you, if you start today, take little steps, by the end of the year you will be in a different place. You will be heading in a different direction. I promise. Okay, take care. I’ll talk to you soon. 

Hey there, thanks so much for tuning in. If you loved what you heard, be sure to subscribe so you don’t miss an episode. And if you’re listening to this on Apple Podcasts, I’d love for you to leave a review. Reviews tell Apple that this podcast is, well, awesome. And it will help women find this podcast so that they too can live a wealthy life. And finally, you can learn more about me and what I do at wealthymommd.com. See you next week.