Sunday, January 17, 2016

November Lessons?

(This post might be a bit obnoxious, as I'm writing about finances from the perspective of a well-paid physician with no children living in a low cost-of-living area.  Feel free to skip it!  Please don't hate me.  I do recognize the incredible privilege and good fortune in being able to write a post like this.)

November started out as a really good month financially.  I was on call for nine days, which meant that I was earning an on-call stipend and consult fees on top of my usual clinic income.  I had recently increased the number of patients I was seeing per clinic, so even my relatively constant clinic income had taken a jump.  I felt flush.  Money was coming in more quickly than it ever had, and so it seemed silly for me to be sticking to a budget and limiting my spending.

Big mistake.

My change in spending habits started slowly, with a takeout meal on a night when the fridge was full of leftovers ("I work hard!  I deserve sushi instead of spaghetti!), but it quickly escalated.  Soon I was eating out in the fancy restaurants that had never seemed remotely worth the cost, and I was offering to pick up the tab for my friends. 

And then I went to San Francisco.

The trip was a combined conference and brief vacation with my girlfriend, so I convinced myself that I could completely ignore my budget and classify most of my spending as business expenses*.  $20 tequila sampler at the hotel restaurant?  Business expense.  $39 flight of port and $20 plate of cheese at a wine bar?  Business expense.  In just over a week, I spent more money on restaurants and new clothes and Trader Joe's chocolate than I had spent in months. 

And I'm not going to lie - it felt amazing.  It was fun to spend without thinking about money or entering expenses into my budget.  $20 plates of cheese are tasty.  And I felt strangely powerful sitting in Jardiniere, which was filled with the pre-opera crowd dressed in tuxedos and ball gowns**,  eating fancy french fries and ordering overpriced wine from a sommelier.  After 16 years of sacrifice, it felt like I had arrived.

Reality hit the day after our dinner at Jardiniere, when we had to pack to go home, and we didn't have room in our suitcases for all of our new things.  Then, when we were preparing our forms for customs, we realized that we had spent almost to the very generous customs limit, something neither of us has ever done.  The worst moment, however, was getting the credit card bill in December.  The only time I've ever had such a ridiculously high credit card bill was when I paid my fees for my licensing exam.  It was painful.

As a result of the overspending, I ended up in the red in December.  This was a huge (and painful) contrast to previous months as an attending, during which I'd been paying back some of my student debt and making healthy contributions to my retirement savings.  The whole month of December felt like a terrible hangover, as I watched all of my earnings go to MasterCard.

My initial take home lesson from November was "Stick to the budget!  Keep living like a student!", and for a while that's precisely what I did.  But as I look back at the month now, I wonder if that's the only lesson I should take from it.  Because although the month was way beyond sustainable spending for me, there were also a lot of good things about it.  While eating the flight of port and the cheese plate, my girlfriend and I had a wonderful conversation about our relationship and the future that makes me happy whenever I think about it.  While having dinner at Jardiniere, we realized that we never want to become people who own ball gowns and think we're special because we're eating in an expensive restaurant.  And we got to see Idina Menzel in a shitty musical, which was on my girlfriend's bucket list.  (Seeing Idina Menzel, that is.  Not the shitty musical.)

So...what to take from this experience?  First and foremost is the recognition that it is easy to spend a lot of money in a very short time.  And although I am earning more than I ever had, I can't afford to spend indiscriminately when I still have a six-figure debt.  (Or probably ever.)  Second is the reminder that people adapt to things very quickly.  While the unrestricted spending felt exciting in the beginning, after only a month it was starting to feel very ordinary.  And going back to my previously comfortable budget felt horrible.

Looking back at the month now, I think the overarching lesson I'm going to take is that splurging is fun, but it can't (and shouldn't) be an everyday thing.  I'm going to keep sticking with my budget and dutifully saving my money, but I'm also going to make sure that I leave some money for the really self-indulgent expenses that are worth it (like going to wine bars with my girlfriend). 

Balance.  Once again, the lesson is balance.

*Please note that this was only from a budget perspective and not a tax perspective.  Hi Revenue Canada!  I'm not evading taxes by claiming booze as a business expense!  Please don't audit me!

**I was in jeans, because I hadn't realized from the website just how fancy the restaurant was.  Awkward!


  1. I think... you may need to let go of the idea that people who spend money on luxuries are all jerks. Especially if you are spending money you have, it really is ok to treat yourself from time to time, and it says basically nothing about "what kind of person" you are. Do you suppose that people looked at you and your girlfriend and thought the same thing?

    But anyway, glad you are having fun! Your trip sounds fantastic! Good luck with budgeting. It CAN be hard to rein oneself in once you let it go for a while (clears throat... Amazon.... ahem). I'm glad your work is going well for you too. Doesn't it feel good to finally be where you've worked towards for so many years?

    1. "I think... you may need to let go of the idea that people who spend money on luxuries are all jerks."

      Hmmm...interesting comment. I definitely attach some moral judgment to people who spend a lot of money on luxury items (especially cars), which may or may not be warranted. I think my big issue with spending on luxury items is not that the spending itself is immoral, but rather that I hate the idea that people are somehow "special" or "more important" because they can afford to spend on luxury items. I have no issue with people going to fancy restaurants if they enjoy the atmosphere/food, but I hate when people go to fancy restaurants to be seen and to show off how successful they are.

    2. I don't think people in SF do that though. It's a city of foodies. Maybe if you were in LA... but in LA being seen is part of may people's jobs(!)

  2. Whoops! And the current exchange rate probably didn't help much.

    I remember having that lesson in college when I was working overtime at 3 jobs (long story). Money really can go easily, especially when you're out with friends a lot and picking up the tab. And it really is nice to be able to gradually increase spending rather than having to dramatically decrease it.

    Our big luxury when we were finally at a financial point that made me feel stable and upper-income was allowing us to buy anything we wanted from the grocery store. Because not as much damage can be done with groceries as can be done with restaurants!

    1. The exchange rate was horrible! I will often spend US dollars with the same mentality with which I spend Canadian dollars, which really hurt when I was getting only ~$0.70-$0.75 US per Canadian dollar. I'm hoping there's some recovery before we go back to the States in July!

      Restaurants are definitely an easy way to blow through a lot of money. Despite returning to my budget, I've eaten out a number of times in the past week, and the budget is suffering.

    2. My husband is out of town this week so instead of buying healthy food to prepare, I bought a whole bunch of pre-prepared meals from Trader Joe's. Surprisingly, instead of the $130-$200 that we usually spend, it came out to $57. Faster and cheaper. But in the end probably not as healthy.

  3. Agree with balance. Also agree with OMDG (see my post:
    I also enjoy fancy cheese plates & wine bars and eating in expensive restaurants. we do it very infrequently (because...budget) but I'm not swearing off those luxuries for life by any means. I don't think in any way that it makes me better then those who can't afford those luxuries, but nor do I think the person who CAN afford it but prefers to eat at home for every meal is any better than I am. I do judge people who spend what they can't afford, but if you can afford it, do what you enjoy.

  4. It is so easy to get into the habit of spending more than you should and it does become habit - been there. I live in the land of foodies (SF) and rarely go out to the spendy places - never been to Jardinere, that place must be one of the nicest here!

    The best thing about SF is the cheap eats (dim sum, burritos) can be such a treat. And sometimes cheaper than groceries...