Give Yourself Some Grace

“Experience is making mistakes and learning from them.” –Bill Ackman

When it comes to our finances, we can all relate to the temporary bliss when everything is running smoothly and we feel like we have it under control. Unfortunately, ‘control’ of our finances can leave as quickly as it comes and just when we think we have it all figured out, we look up only to realize we are sucking for air, just trying to keep our head above water.

In talking with hundreds of pharmacists about their financial journey over the past year, I have come to realize that many feel as if they are on the brink of losing control. Despite having a single-person income that is more than double the median household income in the US, they are living paycheck to paycheck. I can often hear the angst in their voice and see the concern in their eyes.

How do I know what this sounds and looks like?

Jess and I were in the thick of this after graduating from pharmacy school when we found ourselves with approximately $200,000 in non-mortgage debt shortly after I completed residency training in 2009. Unfortunately, this number of $200,000 probably doesn’t shock many of you reading, as this is the norm for many new pharmacy graduates. When you consider the average student loan debt upon graduation from pharmacy school now exceeds $150,000 and you tack on a car or two, undergrad student loans, and some credit card debt; you can see that it is not too difficult to be at or above $200,000 in non-mortgage debt.

With this type of debt hanging over your head, all of the sudden the dream of enjoying a good income after working so hard to get through pharmacy school is a distant memory. Some choose to embrace this reality and others continue to live on as if this debt didn’t exist. Those that embrace it often make significant sacrifices in the early years after graduating from school and after a few short years of digging deep to live well below their means, they are off to the races with a solid foundation in place to build upon. On the other hand, those that ignore the reality typically have expenses that equal or exceed their income by overbuying on a home, and purchasing cars and other luxuries that leave next to nothing to give, save for a rainy day, build up a nest egg, or just have some breathing room.

The Struggle is Real

It should be no surprise that we all struggle from time to time with getting this right. We are trying to juggle paying off student loans, buying a home, saving for kids college, making sure there is a rainy day fund in place, saving for retirement, and the list goes on and on. With the reality of trying to balance multiple priorities at once, it shouldn’t surprise us that we as a nation (pharmacists included) aren’t doing this very well. In the US, adults carry more than $890 billion in credit card debt and over $1.3 trillion in student loan debt. Furthermore, a third of all households don’t save towards retirement and the majority of Americans don’t have enough savings to cover an unexpected expense of $500-$1,000.

The Mistakes are Inevitable

With so many competing priorities, the bad months from time to time and bad financial decisions are inevitable. I’ve certainly made my share of financial mistakes.

Have you made any mistakes with your finances recently? Are you beating yourself up because you feel like things should be more in order? Or how about losing motivation because the debt load seems so big or saving for retirement seems so far off?

It’s time to give yourself some grace, and keep moving forward.  

Here is the reality. Those that will be successful getting out of debt and building wealth are those that can give themselves some grace in the times where their financial plan gets derailed.

Those that win in the long run don’t dwell on the bad. Rather, they learn from the mistakes, identify where things went wrong and make constant adjustments to ensure things are moving in the right direction. Over time, those constant adjustments result in getting closer and closer to achieving financial independence.

Achieving financial independence is a marathon, not a sprint and those that win will have the patience to learn from their mistakes and keep going.

The Easiest Place to Get Off Track: The Budget

If you haven’t already, make sure to read Jess’s article on budgeting. She nailed it. In my opinion, the budget is the key to winning yet the hardest thing to do and the easiest place to get derailed. If you struggle with the purpose of budgeting, I think you will find her insight helpful.

Jess and I have had our fair share of months that don’t go as we had planned with the budget. Some of these are out of our control such as an unexpected car repairs that cause us to dip into the emergency fund and put a pause on working towards other financial goals. Other bumps in the road that we encounter are certainly within our control and are often the result of becoming complacent with the progress are making. Jess and I have found that when it comes to the budget (which has been the single most important factor in our success so far), touching base with each other once a week or every other week to reconcile our expenses and see our progress throughout the month allows us to be successful in staying on track. When we don’t do this, we take a step backwards in our financial plan.

It is important to identify those areas of your financial plan that you know are critical to do but yet are areas that are vulnerable to falling by the wayside.

It doesn’t take much more than a month or two of getting off track with the budget to say ‘forget about it.’ Stay with it. I promise it will be worth it.

I don’t know about you but budgeting to achieving my financial goals reminds me of my commitment to exercise to maintain my financial health.   There are good weeks and bad weeks. There are times where I’m hitting all cylinders and then bam! A few missed days and the plan falls apart for a while. Soon enough, I’m back on the track and then back off. But over the long haul, I have a commitment to make my physical health a priority. Your financial health is no different.

Your Financial Homework: Were you on track with your financial plan before but may have recently hit a bump in the road? If so, start small and pick one financial goal you will accomplish by the end of September. This might be setting your financial goals, starting (or re-starting) a budget, saving $100 towards an emergency fund, establishing an automatic withdrawal through your employer-sponsored retirement plan, or setting up a plan to pay off student loans ahead of schedule. The goal is not to solve your financial problems in one month but rather to pick ONE thing and get started.

I’ll make you a deal. If you make the commitment to this one thing, send me an e-mail (tulbrich@yourfinancialpharmacist.com) and I will reach out to you to keep you accountable. What do you have to lose? Wouldn’t you love to be one step closer to achieving your financial goals by the end of the month?

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