YFP 390: YFP 390: Financial Resolutions: Top 5 Moves for Pharmacists in 2025

Tim Ulbrich, YFP Co-Founder, shares 5 key financial moves to align your goals, enjoy life now, and build a secure future.

Episode Summary

In the first episode of the year, Tim Ulbrich, YFP Co-Founder, dives into strategies for aligning your personal and professional goals to make 2025 your best year yet. He shares five essential financial moves to help you strike the perfect balance between enjoying life today and building a secure future.

Learn actionable tips for setting meaningful financial goals, optimizing your tax planning, organizing your financial documents, automating your savings, and crafting a plan for continuous learning.

Key Points from the Episode

• [00:00] Welcome to the YFP Podcast
• [00:50] Balancing Financial Goals for Today and Tomorrow
• [03:11] Elevate Your Tax Strategy
• [08:29] Organize Your Financial Documents
• [12:40] Automate Your Financial Plan
• [21:42] Commit to Continuous Financial Learning

Episode Highlights

“ So no matter where your experience or goals live, there is no right or wrong. Each of us is on our own journey.” – Tim Ulbrich [2:09]

“Let’s make this year the year that we move the needle on both: those long term savings and investment goals saving for our future selves, while also prioritizing living a rich life today.” – Tim Ulbrich [2:56]

“ Think of automation as the mechanism by which your income is working for you, and it’s automatically funding the priorities that you’ve already set.” – Tim Ulbrich [12:57]

“ We know that we have a system and a list that is prioritized, that if that income comes in, we know exactly what to do. Where we’re going to allocate that, and that is the power of automation.” – Tim Ulbrich [19:06]

“ One of the greatest advantages of that we have of living in the 21st century is that we have access to learning just about anything that we want. And often we can do it at a low or no cost, right? Thank you very much to our local public library.” – Tim Ulbrich [22:06]

Links Mentioned in Today’s Episode

• YFP Podcast: How a Couple Left Their Careers to Travel the World
• YFP Blog: Career Break for Pharmacists: A Practical Guide on Taking a MIni-Retirement
• IRS Form 1040
• YFP Episode 309: Common Tax Blunders Pharmacists Make
• YFP Legacy Folder Checklist
• YFP Disclaimer
• Subscribe to the YFP Newsletter
• Tim Ulbrich on LinkedIn
• YFP on Instagram
• YFP Facebook Group

Episode Transcript

Tim Ulbrich: [00:00:00] Hi there. Tim Ulbrich here and happy new year. I’m so excited to be kicking off 2025 with you here on the YFP podcast. Thank you so much for listening and for joining the show. 

I get excited With the turning of the page into the new year, not as a complete reset, but as an opportunity to really look more closely at the priorities that I’ve determined to be most important to me personally and professionally, and to make sure that the schedule and activities align accordingly.

And I hope the same is true for you. And as we talk about. That turned into the new year as it relates to the financial plan. I’m going to cover five financial moves that I think you should consider implementing as well as why I think about each of these five areas.

So let’s kick things off with number one, which is making sure that our financial goals strike the balance between living a rich life today, as well as. Planning and saving for the future, right? We need to be thinking about tomorrow. We have to be planning and saving for retirement, making sure that we’re focused on moving our net worth in a positive direction, net [00:01:00] worth being our assets minus our liabilities, making sure that we’re taking care of our future selves, saving for retirement, filling those investment buckets.

All of those things are a priority. But let’s not lose sight of those goals that. Help keep us focused on living a rich life today while we’re planning and saving for the future while we’re planning for tomorrow. So perhaps for some of you listening, you’ve long dreamed about a certain experience that has taken a backseat to the busyness of life.

Maybe that’s a small as a weekend getaway for those that have young kids. I know how difficult that can be, or perhaps for some of you, this is a big stretch goal, maybe something as big as a year off traveling the world, having those Lifetime types of experiences, those bucket list type of experiences that are most important to you.

You know, I think back to Matt and Nikki Javid that we featured on the podcast that traveled the world. Nick Ornella that took a year off from his job as a community pharmacist to travel the world. We’ll share both of those episodes in the show notes. So no matter where your experience or goals live, [00:02:00] there is no right or wrong.

Each of us are on our own journey. Perhaps it’s something that’s experienced focus that hasn’t been a priority that you’d like to make a priority those interests or hobbies that we used to long for and prioritize that have gotten lost again in that busyness of life and work.

 One of the activities I wanted to pursue was getting back into playing volleyball, something I had done competitively throughout high school, something that the busyness of life. Other priorities and work just fell by the wayside.

And I did that through a local rec league and that brought incredible joy to me throughout the winter. Or what about that side hustle business or project that you’ve been dragging your feet to take the first step on, or perhaps volunteering or giving opportunities that have gotten lost. And the shuffle, the other priorities of the financial plan.

So let’s make this year, the year that we move the needle on both. Yes, those long term savings and investment goals saving for our future selves, while also prioritizing living a rich life today. 

 So that’s number one on our list of five financial moves that you can make in the new year, all right. [00:03:00] Number two is taking your tax strategy to the next level, taking your tax strategy to the next level.

Now, tax, in my opinion, is one of the most underappreciated and overlooked parts of the financial plan. And I want you to think about tax as a thread. That runs across your financial plan, perhaps one that maybe you’re not thinking enough about that. Ideally we are proactively considering and evaluating when we are making our financial moves.

Now, this sounds so obvious, but I previously have viewed tax very much in the rear view mirror, right? We have to file by April 15th or thereabouts each year to meet the IRS requirements. We don’t want the IRS coming knocking at our doors. And when we do that, we are accounting for. What happened in the previous year now, thankfully, because of our attention and focus on this topic, I’ve become much more proactive in my tax planning as a part of the financial plan, but in years gone by, we would file our taxes and then we’d hold [00:04:00] our breath, right?

Are we going to get a refund? Are we going to have taxes that are due? Did we, withholdings correctly based on differences in charitable giving from one year to the next, right? All of these factors, I didn’t have a great. Picture on come that time of tax filing, what was going to happen, right? And that is less than ideal when it comes to optimizing this part of the financial plan.

And so again, we need to shift our attention from tax preparation to tax planning. One is proactive. One is reactive, right? Again, when we go to file and we complete that paperwork, whether you do that yourself, whether you hire a professional, that is looking backwards. If we start to think more proactive, hopefully at the point of filing, yes, we’re going to do that work.

We have to do that, but we’re then looking ahead to say, Hey, based on that information, based on the rest of our financial plan, based on our personal situation, based on changes that we know are coming or goals that we have. Okay. Bye. What can we be doing strategically in advance throughout the rest of the year to make sure that we’re paying [00:05:00] our fair share of taxes, but no more.

So if you don’t already know your key tax numbers, I’m referring to things like marginal tax rate, effective tax rate, adjusted gross income. Let’s make a commitment this year. We’re going to do it. To get started and to learn more. Now I would love if you would get out the IRS form 10 40, we’ll link to it in the show notes and just spend 10 to 15 minutes to make sure that you understand the terminology and the flow of dollars.

I get it. It’s nerdy, right? And whether you like this subject or you don’t, you do it yourself, you hire someone else, understanding these numbers and understanding the flow of dollars and what those terms mean and how it, ultimately affects your marginal and your effective tax rate is going to be really important as you think about the strategies and you’ll be able to directly see how certain strategies you can implement in the financial plan are going to have an impact on the overall taxes that you pay.

So as one example, AGI adjusted gross income [00:06:00] has huge implications for those that are going through student loan repayment, right? Income driven repayment calculations, especially for those that are pursuing a public service loan forgiveness strategy. Your adjusted gross income is directly tied to the monthly payment that you’re going to make on your student loan.

So if we understand that, we can then start to think about how Well, Hey, are there strategies I can use that can perhaps reduce or lower my AGI adjusted gross income? Not by making less, we don’t want to do that, but by making contributions to things like traditional 401k or traditional 403b accounts, or how about health savings accounts?

Right. These are types of things that can reduce our taxable income, therefore reduce our monthly student loan payment, which is a great thing, especially for those that are pursuing tax free loan forgiveness all the while we’re accruing tax deferred savings into the future, just one example of how.

Important. The proactive planning can be now on episode 309 of the podcast. We’ll link to that in the show notes, CPA Sean [00:07:00] Richards covered the top 10 tax blunders that pharmacists make. 

Some of those things, including having a surprise bill.

Or refund due at filing, probably the most common thing that we see and so what we want to be doing ideally is we’re shooting for zero. We don’t want to have an interest free loan that we have out to the government. And we also don’t want to have a surprise bill that’s due that we’re not ready for.

 Another common mistake he discussed was pharmacists not employing a bunching strategy for charitable giving. So for those that are giving, especially giving at a significant level, uh, and aren’t following the standardized deduction, is there perhaps some strategy in the, in the bunching of charitable contributions that can reduce.

Once tax rate, he also talked about a common mistake. You saw a new side hustlers and business owners not planning for taxes. So earning income and being surprised, uh, by not paying estimated taxes along the way, we talked about underestimating the power of the HSA, the health savings account, and an oldie, but a goodie not factoring in public service loan forgiveness when choosing tax [00:08:00] filing status as married.

filing separately or married filing jointly. So make sure to check out that episode, episode 309 and easy to see as you hear some of those common examples, why having a proactive tax plan is worth its weight in gold. 

 So that’s number two on our list of five financial moves to make in the new year. Number three is button up your financial documents, button up your financial documents.

Now getting organized with your financial records. I believe plays a significant role, not necessarily in terms of moving the needle on your net worth, but in making sure that you and others have access to all of the information that you need to make informed decisions with the financial plan. So think for a minute about all the financial accounts that you have out there, all the different documents.

Insurance policies that touch a certain part of your financial plan. The list quickly grows to one that is overwhelming and the more you operate in your own system, the longer time goes by where you’re operating in [00:09:00] your own system, the easier it is for you to navigate, but perhaps harder for others to navigate and unravel should they need to do so in the future.

And that’s where this concept of buttoning up your financial documents comes in. That’s where this concept of a legacy folder comes in. I first heard of that idea of a legacy folder when I took Dave Ramsey’s financial peace university, probably 10, 12 years ago at this point at our local church. And I remember walking away thinking, wow, that is so simple, so obvious.

Why haven’t I done that yet? Why haven’t Jess and I done that yet as a part of our own plan? So essentially the idea of a legacy folder, if that’s a new concept to you, whether it’s a physical folder, an electronic folder, or a combination of both, it’s a place where you have all of your financial related documents.

So in the event of an emergency, others would be able to quickly access your financial situation. And they’re not just access, but be able to pick up and understand what’s going on and to be able to make key decisions. In your absence. 

[00:10:00] So here’s how we have organized it. Certainly not the only way to do it, but here’s how we have organized it in a combination of Google drive. And a safe at home that has a passwords, all of our passwords stored in a one password account. So we have nine different sections. I’ll describe them briefly.

This sounds overwhelming. It did take a commitment of time to get started. It takes a commitment of time to update, but I will say there’s an incredible feeling of peace. Momentum that comes from having this done. So section one for us is what we refer to as important documents Okay, birth certificates for us for our kids social security cards marriage certificates passports all of these We have in a fireproof safe at home and we have them just referenced Uh, as being there in the electronic version that we share with the financial planning team, as well as share with those that would take care of the boys in the event of our absence.

So that’s section one important document. Section two is all of our insurance policies and information, auto insurance, homeowner’s insurance, umbrella insurance. Health [00:11:00] insurance, long term disability, term life and term life insurance policies for myself, for Jess, for the business, et cetera. Section three is a state planning documents.

So we have a hard copy of these in the safe that have been notarized and electronic version that’s uploaded in the Google drive. So these are things like the revocable trust agreements, healthcare, power of attorney, living will last will. And testament section four is the car titles. Section five is our home ownership documents. So this is the deed to the home, our home equity line of credit, our HELOC information. We have another copy of homeowners insurance policy here, just so it’s all contained in one section. Section six is a summary of our financial accounts, our net worth tracking sheet.

As well as our social security statements. Section seven is our tax returns for personal and business tax returns. Section eight is all of the records related to the business. So a summary of the different entities, legal documents, operating agreements, buy, sell agreements, et cetera. And then section nine is just a miscellaneous.

So [00:12:00] information about utilities and other accounts that don’t fit. In the previous sections again, it takes time to get that started, but it’s something that you can act upon pretty quickly in the new year. And I encourage you to set a, an annual recurring reminder, whether that’s the turn of the new year, perhaps it’s daylight savings time or something else that you just remember to update those documents as needed.

Periodically. All right. So that’s number three in our five financial moves to make in 2024 button up your financial documents. Number four is my favorite. This is the area that I think has moved the needle the most for Jess and I in our financial plan over the last decade or so. And that is automation, making sure that you have a system and ideally a system that is working.

So think of automation as the mechanism by which your income is working for you, and it’s automatically funding the priorities that you’ve already set.

And determined to be most important in advance. Now, I know I’m not alone when [00:13:00] I say that I was feeling for some time that there are multiple financial priorities that are occurring at once that are swirling around in my head. And it can be overwhelming to think about what are those priorities in what order.

And how do we allocate the limited resource of limited income that we have to those? Should we focus on one? Should we focus on two? Should we focus on three? And so much of the stress around the financial plan, I believe is from all of that unknown and anxiety swirling in our heads, right? If we can get that down onto paper.

And if we can start to put some numbers and a plan to it and prioritize it, we may not always like the outcome of how fast we may or may not be able to achieve those goals. But once we have a plan, once we articulate it, once we know we thought about it, we prioritize it. I think there’s a lot of clarity and momentum that can come from that.

So automation helps put those goals into action. It takes the stress out of wondering whether or not they’re going to happen. So whether it’s saving for an emergency fund, whether it’s saving for a vacation, paying down [00:14:00] debt. Whether it’s student loan debt, consumer debt, auto loan debt, mortgage debt, whatever type of debt, whether it’s saving for retirement, saving for a home, saving for investment property, automation helps identify and prioritize these goals and assign your income accordingly.

Yes, it takes a bit of time to set up, perhaps not as much as you may think as you hear about it, but once it’s set up, it provides a long term Return on time benefit, but also better yet, as I mentioned, peace of mind and feeling of momentum, knowing that you’ve thought about prioritize and have a plan in place, working itself to fund your goals.

Now, Ramit said, he talks about this in his book. I will teach you to be rich. He does an incredible job of teaching automation credit to him. And he says that automating your financial plan will be the single most profitable system that you’ll ever build. And I remember hearing that and thinking, man, that’s a big, big promise, right?

But it is a hundred percent true. [00:15:00] Automating your financial plan will be the single most profitable system that you’ll ever build. So if you’re not already doing this, I want you to imagine a future state. Imagine a future state where your financial goals and priorities are clearly defined. You’ve determined how much of your monthly budget is available for these goals, and you have a system in place to automatically fund these goals every month.

So you get paid and your money is being distributed automatically. Paycheck comes in, dollars are being funded to the goals that you’ve already determined and prioritized to be most important. Okay. So what does this look like? Here’s how Jess and I. Are currently implementing this now, previously we adhered to a zero based budget, which I think really did help us.

Laser in and focus on our expenses and account for every single dollar that we earn. That’s the premise of a zero based budget. I think that method works out really well, especially when you’re getting started or feel like you need to get back on track. But over time, we’ve loosened [00:16:00] this up knowing that once we account for all of our monthly commitments, right?

Our monthly commitments being mortgage insurance, property taxes, giving grocery subscriptions, utilities, et cetera. Once we account for those, and those are largely fixed. outside of some variation in utility payments. We have a certain amount of funds after we account for those things that we know can be allocated in two general buckets.

With several options within those two general buckets. So what are those two general buckets? General bucket number one is what we call everything else. So this includes things like gas, miscellaneous trips to the store, family experiences, family entertainment, eating out, et cetera. And we track this, Jess and I track this in a shared Google sheet.

 That just helps us make sure we don’t overspend this category. The second general bucket is what we think of as our sinking funds. It’s the second bucket of funds that we want to predefine, prioritize, set allocation amounts, and then set up auto [00:17:00] contribution of funds.

 The areas that we’re focused on our funding and HSA saving for a summer vacation, our Roth IRAs funding, the next, the next car purchase, and then thinking more about the boys five to nine funds for college savings.

So as we sat down and thought about. What is the greatest priority? Those are the things that rose to the top that we wanted to fund with these bucket two funds that I’m referring to, right? These sinking funds. So in this scenario, and within our discussion of automation, we would look to estimate the available pool of funds per month or per year divided by 12.

We would then prioritize the list. Determine the allocation order in the amounts. And then, as I mentioned, we would automatically fund those and set up an, a recurring contribution. 

Now you can see the system and process that we worked through, right? We identified the total estimated annual amount. You can do the same thing to buy that by 12 for monthly.

We listed out the goals and we matched those up [00:18:00] to prioritize accordingly. Now here’s the disappointing part, or perhaps. Depending on you look at it, maybe exciting as I do in this example, we have fully funded several goals, right? , but we had several things that I mentioned that were left unfunded. Okay. The kids five to nine accounts as well as the next car fund. So we have a couple options here. We can go back to the drawing board and redistribute, right?

Lower some of the other ones and partially fund some, and then have others that we are able to partially fund, or we can stay as is knowing that if additional funds become available, right? Whether that’s in the form of for us, additional income, it could be tax refunds, although hopefully we’re doing a good job planning and that’s not the it could be sizable income for some of you.

It could be picking up extra hours. It could be gifts that you receive, whatever might be the additional income. We know that we have a system and a list that is prioritized, that if that income comes in, we [00:19:00] know exactly Where we’re going to allocate that, and that is the power of automation.

That is the power of having a system. So one step further, what does this practically look like for us in terms of implementation, so we use ally for all of our online banking. Now, this is not a commercial for ally.

Uh, we really like them. We’ve used them for several years. I like the capability they have with saving buckets and other features, but you can build a system like this and many different types of savings accounts. So for us, direct deposit from work income goes into ally, goes into a checking account. And since we know the amount required per month to allocate to the goals we decided upon, there is then a bucket.

Labeled for each of these goals inside of ally. So the transfer of funds goes from checking account where the direct deposit comes in to savings account. And then within the savings account, we have a predefined bucket. So essentially what this looks like is you’ve got a certain amount of dollars, let’s say [00:20:00] 30 or 40 in a savings account.

But once you click into that, you see all of these different sub buckets for things like vacation and again, you can do a multitude of things. Of different buckets. I think you can do up to 30 or so inside of ally. And in the case of for us, the IRA, HSA savings, you know, we could put those in the bucket as well inside the savings account, but we’re going to set those up to be an auto contribution directly into the investment account, right?

We want those dollars working for us as quickly as possible. So again, imagine that flow, you get paid. Right. We’ve identified the buckets. They auto contribute into the buckets because we know we’ve already accounted for inside the budget, and then that’s working for us once we have the system set up now, depending on when you get paid for us, it’s the first of the month, but for you, it might be two times a month.

But regardless, once you know when you get paid and once that consistent, we know that any time after the first, so we get paid around the first of the month as well as the 15th, but we use the first is our metric for when we’re going to auto fund these goals. So anytime [00:21:00] after the first, it could be the third, it could be the fourth.

I think I have most of them set up on the fourth. We can have that auto transfer established to go from checking to savings to the bucket, leaving. Only in checking what is left to pay off the credit card each month. And so that all other dollars, they have a purpose, right? They’re being defined and allocated towards a goal.

That is the system of automation. I think the one probably that can move the needle, the most automate your financial plan, have a system in place.

And finally, number five is set your learning plan. Now, when it comes to personal finance, I believe strongly that there is no arrived with the financial plan. Right? This is constantly evolving. It’s constantly changing and a commitment to ongoing learning and having the humility to understand that there’s much to learn and that mistakes are inevitable is really key to long term success.

One of the greatest advantages of that we have of living in the 21st century is that we have access to learning just about [00:22:00] anything that we want. And often we can do it at a low or no cost, right? Thank you very much to our local public library. So whether it’s reading books, great. Have at it. If it’s podcasts, blogs, videos, there’s many options out there.

Find the learning path that means the most to you and has the significance. And really engages you in the learning process. And I’m going to encourage you. Learn learning is one thing, right? But learning plus action plus accountability is really where things start to happen. So that’s number five of our five financial moves to make set an intentional plan around what you want to learn in this new year.

And then determine what are those resources? What are the blogs? What are the books? What are the podcasts that are going to help you get there? And I hope YFP will be an important part of that journey. Cheers to a great new year. Have a great rest of your day.

[END]

Current Student Loan Refinance Offers

Advertising Disclosure

Recent Posts

[pt_view id=”f651872qnv”]