Thursday, August 17, 2017

Financial Personalities

I am very lucky to have a few super long-term friends, the longest-term of whom is my friend L.  L and I met in kindergarten, and we have lived fairly parallel lives ever since (same elementary/junior high/high school, same university, same medical school, same residency site, and now working at the same hospital).  Although our lives have been pretty similar, we are nonetheless very different people.  Where L is outgoing, I'm a classic introvert.  Where I am uptight and neurotic, she is laid-back and has a laissez-faire attitude.  She chose to be an Emergency physician because she loves the fast pace and variety, while I chose to be an Internal Medicine sub-specialist so that I could spend lots of time thinking and pouring over medical minutiae.  We're closer-than-sister friends, but very different in many respects.

As an introvert, I cling tightly to established relationships, so I make it a priority to maintain my friendship with L.  Because we're both busy people, the easiest way for us to do this is to get together for dinner, which we try to do once a month.  (This is one of the reasons my eating out budget is ridiculously high.)  Earlier this week, we met at a local restaurant for cocktails, charcuterie, and a chance to catch up on everything that's happening in our lives.  And one of the subjects that came up was money.

Having known her for 35 years, L is one of the few people with whom I can honestly talk about money.  So I talked frankly about how I'm horribly a little bit obsessive about saving money, about how closely I monitor my net worth, and about how much I would love to have enough to retire right now, even though I probably wouldn't.  As I talked, I could see a bemused little smile form on her face.

"Oh my god, Solitary!  You're a physician.  Stop worrying about money so much!  You have enough money.  Just spend it!"

She then proceeded to tell me about her financial strategy, which is basically to meet with her financial advisor once a year to review her debt repayment strategy and investment strategy, after which she spends whatever money is left over.  She doesn't really know her net worth, and she certainly doesn't know her daily net worth like I do.  But with how little attention she pays to her money, she is vastly less stressed about finances than I am.

Now...I have no idea whether her financial strategy is a good one or not.  She might be saving only a small percentage of her earnings, thus ensuring that she will need to work til 65 or beyond, in which case her approach isn't great.  But she spends pretty reasonably for a high income earner, and she does recognize the importance of saving, so I suspect she's doing okay.  And as I just said, she is vastly less stressed about finances than I am.

Which makes me wonder:  Is a person's stress level about money inherent and inflexible, or can it be changed?  If I start paying less attention to my finances, could they be less of a source of anxiety for me, or is this just part of my innately anxious personality?  I had thought that building up a solid net worth would get rid of my financial worries altogether, but it has really only lessened them slightly.  I'm now convinced that achieving Financial Independence is the key, but I'm not certain that even that will be enough.  Maybe I'm just hard-wired to worry?

Are you anxious (reasonably or unreasonably so) about your finances?  If so, how do you deal with it?


  1. Many people have no desire to retire early - they like to work and plan to do it into their 60s or beyond. I have many people at my workplace who retired but then come back to work because they miss their job too much. I would retire today if I could, but I think that most people in the workforce don't share my feeling about that so it's not a goal for them.

    REgarding the money stress, here's my theory: scarcity creates stress. I have countless anecdotes from my life and others' and there's a good bit of research on how poverty affects resilience, etc. I live in a city with a lot of poverty and many of its related problems.

    But also, there can be stress when you are creating a false scarcity. As when you adjusted your budget because you realized saving is not always better than spending for enjoyment, overly strict money management can make it still feel like you're in a money crisis situation. You may also be hard-wired to worry about it, but strict control may exacerbate it.

    Here's my related situation: I'm in a job that pays pretty well and allows me to save 30% of my income and spend money on silly things (such as yet another university degree and who knew I could spend SO MUCH MONEY on front yard chickens?). I absolutely hate my job and I believe the stress attached to it makes me ill. I could get another job doing something much more meaningful and with a boss who truly appreciates me, but my salary would cut in half. I would have to work well into my 60s and I would be super stressed about every major expense such as the new car I'll need to buy eventually to replace my 16-year-old pickup. I feel trapped in this comfortable life because I remember working this other job before and having no idea how I could possibly make ends meet with my massive student loan debt and having to live in a super crappy apartment. There are of course other jobs, but without a vast cut in quality of life (requiring much longer hours, etc.), they would be a very significant cut in pay. I'm nearly 50 so I can't keep screwing around with money; I have no regrets financially because I was able to frolic and do really interesting things in my 20s and 30s and much of my 40s - only now am I really thinking about retirement. Which makes me wonder if I just have to suck up this soul-destroying job until I can retire at 60, or another job and plan to work to 70 but know that I"m making the world a better place and don't get sick about it.

    I envy your friend's lack of money stress.

    1. I agree with this. When I've had a job I hated, I've felt a lot more stress about money, and felt more insecure in general. I do get stressed about money from time to time, and when that happens it helps me to remember how relatively well off and secure we are compared to a lot of families. And frankly, I'm too busy to do super strict budgeting anyway. Working too much as a resident seems to help me contain much of my spending anyway. 🤦‍♀️

    2. NOLA - That's a tough situation, and one that I struggle with myself. I suspect that there are jobs that I would enjoy more than my current one, but I doubt any of them would pay close to what I'm earning now. Is it better to work 7-10 years at a job you don't love, or 20-30 years at one that you do?

      OMDG - You make a good point about remembering how relatively well-off we are. One of the problems with being in medicine is that many other people seem like they're better off than I am, even though it's likely just that they're more willing to spend their money than I am. This is compounded by the fact that I read a lot (too many) financial blogs, which seem to be filled with 30-year-old retired millionaires. It's good for me to be reminded that 30-year-old retired millionaires are a pretty rare exception to the norm.

    3. I also realize I sound kind of preachy. I do have issues where I look at what other people are doing ( in my demographic: having multiple children, living in big houses in expensive cities, sending multiple children to private school, etc.) and feel frustrated Bc I know we can't afford those things. Ever. Even as an anesthediologist. I'm really trying to keep the jealousy in check. I'm just mentioning this Bc it is something I struggle with, and I wanted you to know that.

    4. Not preachy, just opinionated! I miss reading your blog for that reason.

      I wonder if the people you see spending all that money can actually afford it themselves, or whether they're living a life that will commit them to working until they die?

  2. I'm a current resident and I am definitely (possibly), unreasonably stressed about my finances. I'm in a specialty that is the lowest or one of the lowest paid at the end but obviously is still a reasonable salary. I keep thinking about early retirement and FIRE and just knowing that the road till the end of residency is long and the difficulty finding a job and the loans I'll have to get through gives me anxiety. I put at least 30-40% of my income towards loans/savings but I always feel guilty whenever I go out to eat or treat myself to that latte but it's not as if I have too many guilty pleasures.

    Anyways, the short of the message is that I relate to money anxiety and I haven't found a way to deal with it effectively.

    1. The fact that you're thinking about this in residency and starting to save now is going to put you in a great position when you finish. I didn't think about money at all until the end of residency, and I managed to unnecessarily amass a lot of debt during residency. I would've been much better off if I could have even maintained my net worth during those years!

      I think it's important during residency to find a way to not feel too guilty about the small pleasures. Residency can be a ridiculously long and exhausting grind, and we all need some vices to survive it. If you're putting 30-40% of your income into loans/savings at this stage, then you can probably afford to relax a little!

    2. I definitely have my vices. I buy a latte or two a day and buy take out almost daily. I'm trying not to beat myself down about those things because yes, while I could have an extra $300-400 a month to put towards loans, I would also have less free time in the evenings and no treat in the mornings to mentally prepare myself for the day ahead.

      Residency is such a grind sometimes and I need those pick me ups. Part of why I'm trying to be somewhat careful with my money is that sometimes I find the days so exhausting that I think about what it'll be like to work like this forever and it motivates me to save haha (or buy coffee..). But anyways, thanks for helping put this into perspective! I'll try to find a healthy balance.

  3. I hope it works out well for your friend, L. I think early in a career one can have that attitude. When people reach middle to end career, it would be better to have options. Once I arrived at the financial independence I enjoyed my work more and I have freedom to cut back hours and cut out work that I don't enjoy. To me that is worth working for.

  4. Sounds obvious, but I guess it depends what you're saving for, and what standard of living you'd like to maintain. I'd like to buy a property, so I'm saving for a deposit and mortgage. I have a strong sense I'll achieve this in the next 5 years. To be honest I'm not currently concerned about paying off the mortgage, because there are enough years of working life and future family assets to help that. That's my main priority - get on the property ladder, and everything I save thereafter plus my pension is an extra. I only care that my bank balance goes up, not down. also come from a pretty spartan background where my parents didn't spend, they saved, so I actually still perceive things like booked holidays and fine dining as something 'other' people do - a habit that's persisted into adulthood! Occasionally I do (usually at night) really rue not taking different choices in life and earning much, much more. But life's fine, really it is.

    If I start adding unknown future children into the mix, though, my comfortable plan of simple living goes out the window. That's really the only reason why I might start making tougher job choices.

    Still, my mother used to be a workaholic, pulling in a lot of overtime to save money. She didn't really spend it - she saved it. She worked low paid jobs she honestly didn't like (manual stuff, bad managers, lots of stress). She's still working, despite being at retirement age, despite her pension, despite poor health. I ask her why she's saving. "In case I need it," she says. "Or you need it."
    (I don't need it, I've never asked for money since I graduated, I paid off all my loans).
    "Why don't you spend it, enjoy yourself, go on holiday, visit our family? You could retire any time."
    "What's the point, it won't make me happy."

    She has six figures in the bank. I guess maybe work gives her self-esteem. But she's also long lost sight of what she was saving for.

  5. Thanks for the new commenting option!

    I used to be at least as anxious as you are now, and I never thought it would or could change, but it turns out that I can!

    We are reasonably high earners living in an unreasonably high COLA so I still do watch our spending quite carefully BUT I have stopped tracking every penny, obsessing over whether we had take out two or *horrors!* three times this month, and took a huge step back in general from obsessing over details. That's not to say I don't think the details matter, they do! But they don't deserve 90% of my time and attention anymore either.

    Part of this has been because I had way too many other things in life (career, relationships, friendships, pets, travel) to obsess over as well and I was forced to choose. But part of it was a conscious decision to start to treat myself better, and part of *that* is to achieve a lower stress level. Being more efficient with how I manage our finances and therefore paying less penny to penny attention to them has been the happy result of this decision. I do pay attention to my net worth every month, and am also fussing over investments regularly but that's by choice rather than driven by stress. Which is to say, I enjoy fussing over investments, it doesn't fuel my anxiety to do so.

    I think that your level of anxiety that's natural to you can be malleable but how you change that will be something unique to you, most likely?