{"id":194713,"date":"2025-10-01T12:50:10","date_gmt":"2025-10-01T12:50:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/194713\/"},"modified":"2025-10-01T12:50:10","modified_gmt":"2025-10-01T12:50:10","slug":"life-got-really-expensive-white-coat-investor","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/194713\/","title":{"rendered":"Life Got Really Expensive | White Coat Investor"},"content":{"rendered":"

\"\"By Dr. Jim Dahle<\/a>, WCI Founder<\/p>\n

I fell<\/a>\u00a0off a mountain once<\/a>, so Katie and I didn’t hold our monthly budget meeting for a while. When we did, we had to do a little catching up. My part of our monthly budgeting spreadsheet is to add up all the sources of our income. Katie’s portion is to add up all the sources of our spending so the total can be used on that spreadsheet to help us plan our cash flow.<\/p>\n

\"\"<\/a><\/p>\n

We don’t really \u201cbudget\u201d anymore in the strict sense most people mean when they use that word. We don’t stop spending when we hit some sort of arbitrary limit for a category. This is because our income is far more than we spend. While we’ve been VERY strict with budgets in past years, we don’t have to anymore, so we don’t. Nevertheless, from time to time, we do look at our spending, but it’s been a while since we did so with any sort of detail.<\/p>\n

When Katie gave me the totals for four straight months (this was from 2024, mind you), they looked like this:<\/p>\n

July: $20,690.58
\nAugust: $36,835.77
\nSeptember: $28,248.60
\nOctober: $32,809.49<\/p>\n

I was a little bit shocked. I thought we spent about $15,000 a month, and maybe $20,000 was kind of a big month for us. But here were four months in a row over $20,000. Maybe $20,000 doesn’t seem like a lot to you. But keep in mind what is NOT in this total:<\/p>\n

Income and payroll taxes
\nMost charitable giving<\/a>
\nFinancial advisory fees (being your own financial planner and investment manager might be the best-paying hobby out there)
\nSaving for retirement or anything else
\nMortgage payment (we don’t have one)
\nCar payments (don’t have those either)
\nStudent loan payments (nope)
\nAny other payments<\/p>\n

Does it seem like a lot? This is just what we spend on regular old stuff. Meanwhile, the average American household is living on <$80,000 a year. They have to pay taxes, give, pay their debts, and save for retirement on that. We blow their entire annual income in just three or four months of mostly discretionary spending.<\/p>\n

Where in the world was all our money going? We decided we probably ought to find out, so Katie went back to the credit card, bank, and Venmo accounts to categorize the spending a bit. Just for the month of October, when we spent nearly $33,000, this is what she found:<\/p>\n

Food: $2,750 ($1,000 of which was spent on restaurants, mostly during two short trips)
\nGasoline: $750 (the garage might be wired for electric cars, but there aren’t actually any in there)
\nClothes: $875 (this was actually pretty unusual for us; it mostly included a bunch of shoes for various family members)
\nVacation: $8,200 (No, that doesn’t even come close to covering the entire upcoming family trip to South Africa)
\nTax prep: $5,875 (20+ K-1s have their costs<\/a>)
\nHealthcare: $1,800 (Pro tip: Don’t fall off mountains<\/a>)
\nGifts: $1,100 (Actually, it was a pretty low month for us as we put our \u201cmatching dollars\u201d for the niece\/nephew 529s in this category)
\nUtilities: $500 (We like heat and light)
\nInsurance: $730 (Teenage drivers = bad)
\nHousehold: $1,380 (Subscriptions, cleaning, repairs, and the installation of Google Fiber)
\nCar registration: $234 (Part of the cost of not driving a beater in Utah is a much more expensive registration fee)
\nProperty taxes: $6,921 (Big, fancy house, but at least it’s in Utah)
\nKids’ activities: $300 (Not bad considering how much they’re involved in)
\nOther: $1,400 (We got sick of categorizing all the other stuff; how long do you want this budget meeting to go?)
\nTotal: $32,815<\/p>\n

Katie almost didn’t want me to publish that list. \u201cPeople are always making value judgments.\u201d She’s right about that. If you don’t believe me, read the comments section below this post. Everyone likes reading about other people’s budgets and pointing out how they’re different from their own and how much money is being wasted. But I told her, \u201cHey, there’s a video of me topless on my first day in the ICU on our YouTube channel; I think it’s OK to reveal one month’s budget.\u201d She admitted that I had a point.<\/p>\n

\n\u00a0<\/p>\n

Know What You’re Spending
\n\"\"<\/a><\/p>\n

My point is that I thought we were spending about $15,000 a month, and we weren’t. If you don’t track it in some way\u2014at least in the crude way we normally do it just for cash flow purposes\u2014you could make some big financial mistakes. What kind of mistakes? Cutting back at work when you can’t afford to do so. Or thinking you’re saving for retirement when you really aren’t. Or projecting a totally inaccurate FI number.<\/p>\n

So, have an occasional budget meeting (include your partner, if any) and see where you actually stand. It makes planning your financial future a whole lot more effective.<\/p>\n

More information here:<\/p>\n

How Much This FI Physician Family Actually Spends in a Year<\/a><\/p>\n

When Is It OK to Start Enjoying Your Money?<\/a><\/p>\n

\n\u00a0<\/p>\n

Inflation Is Real<\/p>\n

I wondered how much of this was due to inflation. Back in 1996, when I was an undergrad, I could get by for a month on about $100 of groceries. Admittedly, I wasn’t eating very tasty or even very healthy food. But now our family of five is spending $1,800, or over three times as much per person. That doesn’t include any eating out either. Your financial plans need to assume inflation will happen, and sometimes at rates much higher than 3%.<\/p>\n

\n\u00a0<\/p>\n

There Are \u2018One-Time Expenses’ Every Month<\/p>\n

You might look at what we spent money on in October and argue that a lot of those were \u201cone-time expenses.\u201d That’s true. We only pay property taxes once a year, and I only register my truck once a year. That ridiculous $8,200 for vacation presumably doesn’t happen every month. Right? Well, it probably does for us, actually. We really like going on vacations. In fact, the phrase we use around here is, \u201cIt’s not vacation; it’s a lifestyle.<\/a>\u201d I sometimes explain further that we set up our lives this way on purpose. We’re not taking a break from anything; this is just how we live. If you want to take your kids to the other side of the planet for a few weeks, you might be surprised by how much you might spend.<\/p>\n

Even our healthcare expenses are pretty unusual one-time expenses. I mean, I hope I don’t start falling off a mountain every year. And you only have to install Google Fiber once. But \u201cone-time\u201d and \u201conce-a-year\u201d expenses cannot be left out of an effective budgeting process. You cannot ignore expenses just because you don’t have them every month. In fact, if your budget is particularly tight, you might have to set up \u201csinking funds\u201d that you pay into every month to cover big annual expenses like property taxes.<\/p>\n

More information here:<\/p>\n

Doctors Need to Budget, Too (with a Few Examples)<\/a><\/p>\n

A Tale of 2 Budgets<\/a><\/p>\n

\n\u00a0<\/p>\n

Value Judgments<\/p>\n

The main reason why most families should itemize their spending from time to time is so they can get all judgey. Judgey with themselves, not each other or anybody else. You want to ask yourself questions like:<\/p>\n

\"\"<\/a><\/p>\n

\u201cIs this really what we value?\u201d
\n\u201cWould we rather spend this much on vacation or retire a little earlier?\u201d
\n\u201cDid you really enjoy eating out more than you would have enjoyed spending that $1,000 on gear for your favorite hobby?\u201d
\n\u201cIs it time to shop around for insurance again?\u201d
\n\u201cAre you sure you don’t want to go back to just using TurboTax<\/a>?\u201d<\/p>\n

\n\u00a0<\/p>\n

Expect Your Spending to Rise<\/p>\n

Most people tend to spend more over time for various reasons, not all of which are related to inflation. You’ll probably be the same. Assume so as you make your plans and projections about the future. Yes, $4 million might be enough for you to retire today but maybe not in 15 years when you actually retire. Our initial FI number when we drew up our first written financial plan back in 2004 was $2.7 million. Even adjusted for inflation, that’s only $4.6 million today\u2014or enough to support an income of about $15,000 a month. We’ve still got kids at home, but that wouldn’t cover our expenses lately. And we’re not even including taxes and a bunch of other stuff.<\/p>\n

All those luxuries you add in along the way can really add up.<\/p>\n

\u00a0<\/p>\n

The White Coat Investor community is a place where high earners can get help with their \u201cchampagne problems.\u201d Clearly, all of our \u201cbudgeting problems\u201d fit into that category, but I bet a lot of you can still relate to them. Track your spending and make sure the way your money and your time are being spent is in alignment with your values.<\/p>\n

Have you been surprised by how easy it is to spend a lot more money as your income rises? Why do \u201cone-time expenses\u201d throw off so many budgeters? What is your budgeting process? Does it make you feel better to know you’re not the only one spending a ridiculous sum of money each month or year?\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"By Dr. Jim Dahle, WCI Founder I fell\u00a0off a mountain once, so Katie and I didn’t hold our…\n","protected":false},"author":2,"featured_media":194714,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[64417,3054,28,70511,147,530,2897],"class_list":["post-194713","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-attending-physician","tag-budgeting","tag-business","tag-new-attending-physician","tag-personal-finance","tag-personalfinance","tag-spending"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/194713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=194713"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/194713\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/194714"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=194713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=194713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=194713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}