window.dataLayer = window.dataLayer || []; function gtag(){dataLayer.push(arguments);} gtag('js', new Date()); gtag('config', 'UA-72842519-1');

  

Money

Andy and Craig met in high school and got engaged soon after they both attained their undergraduate degrees from the University of Texas. They were in their early 20s, and Craig was in medical school in 1999 when they married; they didn’t have much experience with managing money.

“We were all about immediate gratification and racked up debt on our credit cards,” Andy says. “It didn’t occur to me that we should be saving; we just winged it. All of our income went right back out the door.”

Luckily, the couple had no college loan debt before Craig entered medical school. He chose a state school to get his M.D., which cost less than the big-name universities, and Andy supported them with her modest salary as a social worker.

When Craig started his residency and began earning a salary, he sat down with Andy and their credit card bills and said, “Let’s get out of debt in a year.”

“At that point, we hadn’t been accustomed to having his salary, so we hammered down on our debt,” says Andy.  “We just funneled Craig’s salary into paying it down and continued to live on my salary.”

Unfortunately, their beloved dog Cowboy needed emergency surgery just as they started to make progress, and his veterinary bills cost Craig and Andy several thousand dollars. They kept paying off their credit cards piece by piece, and by the time Craig finished his residency, two years later, they were debt free.

As the couple started making more money, they began to notice that the people around them had the tendency to spend more as they made more.

“We saw a lot of people blow through their money very quickly,” Andy says.

The couple now has two young boys, one in a private school and one in preschool. Each child has a 529 plan in his name that was opened the week he came home from the hospital, and a contribution is deposited every month. Andy and Craig also opted to open a trust fund for each boy that will mature when they turn 30.

“We decided that it’s best for our kids to get a nest egg before we die versus making them wait until an inheritance is passed down to them,” Andy says. “A friend of mine had a trust set up for him and he was able to start his own business when it matured. I believe it’s more empowering.”

Andy wishes they would have set up a budget earlier in order to be ahead now. They now use Quicken to manage their bills and income, and they try to be aware of what Andy calls “mindless spending”.

At the end of Craig’s residency, he and Andy sat down with a financial advisor who specialized in helping new doctors navigate a world of decent salaries and a mountain of med school debt. He guided them with sound investment advice and helped them create a plan.

“We have adjusted our plan since we had kids, but we are still with the same financial planner 11 years later,” Andy says. “He is our backup plan in case, heaven forbid, something should happen to Craig. Our planner has the information for all of our accounts and investments and could help me ensure our family has access to it. We were lucky to find someone we trust early in our married life, and we’re still benefiting from the relationship.”

Smith Wealth Advisors