A healthy approach to money is the best path toward accomplishing your personal and financial goals. At its core, money is simple: don't spend more than you make. But, as we all know, it can become complicated, especially as our assets increase.

Healthy financial habits are just like healthy eating and exercise. They require discipline, intentionality, and long-term vision. And, as with healthy eating and exercise, healthy financial habits are easy to give up. When we become undisciplined and spend without vision, it isn't long before we require professional attention.

The medical profession is notorious for producing people with poor financial habits. This is understandable. The life of a resident in training is stressful and time consuming. You have responsibilities almost equivalent to that of an attending, but without the compensation or recognition. Your undergraduate and medical school programs provided little - if any - education in finance. Add to this stress the daily acknowledgement of interest compounding on student loans and growing debt, and it’s easy to see how money can quickly get out of hand.

Don’t beat yourself up, but do take action. 

WHERE TO BEGIN?

healthy approach to money

A healthy approach to money starts with a solid financial philosophy. We most often think of finances in terms of strategy - the plan you create for when, where, and how to best utilize your resources. Before creating a strategy, though, ask yourself why you want to spend money in the first place. A strategy asks the question “How?” but a financial philosophy asks the question “Why?”

Think of it as a succinct declaration of your identity and values, a way of aligning your checkbook with what matters most to you.

A healthy financial philosophy also keeps your identity separate from your money. You are not your income or net worth, but the way you spend it is a reflection of who you are and what you value. It’s been said that money makes us more of what we already are. So, if you are disciplined and principled with very little money, you’ll most likely be disciplined and principled with large amounts. The converse is also true: an undisciplined and unprincipled person with little money is also undisciplined and unprincipled with large amounts, and can often do great damage as their income increases. 

Here are five ways to take a healthy approach to money:

1. DEVELOP A FINANCIAL PHILOSOPHY ASAP

While in medical school you watched many high school and college friends in other fields graduate, get jobs, acquire promotions, and live comfortable lifestyles while you were stuck surviving off ramen noodles and student loans. Now that the end of your education has come (or is in sight), you might be tempted to spend excessive amounts of money in order to “catch up” to your peers. This is a common trap into which many in the medical field fall. So the sooner you decide why you want to grow your wealth, the sooner you’ll start making productive choices. Large amounts of money can become uncontrollable quicker than many people realize. A financial philosophy builds a solid foundation on which to begin maximizing every dollar, and it is always easier to start with a good foundation rather than returning later to fix one that’s broken.

2. KNOW YOUR LIMITS

A healthy approach to money requires awareness of your financial boundaries. Think of a child who gets a dollar from her grandmother for performing a chore, then goes to the store to buy a toy. She spends all her time looking at toys that cost hundreds of dollars, and every few minutes asks her parents if she can buy one. Obviously, she cannot, and this exchange can easily end in frustration and tears.

That tendency can be hard to outgrow. As our income gradually increases, our expectations can easily outpace our resources. But a bump in income should not mean a dramatic increase in lifestyle, especially if you are still paying off debts or have other mandatory expenses. Your financial philosophy should apply to every income bracket in which you might find yourself, low or high. It keeps your money focused on the bigger picture of who and what you want to become.

3. AVOID THE FINANCIAL COMPARISON TRAP

Keeping up with the Jones's is a very real struggle. If you work or interact with people daily who live a more lavish lifestyle than you, your mind begins to wonder what it would be like to have what they have. This kind of envy is real, and it is a terrible way to utilize your money. 

Comparing yourself, your income, and your assets to those of your peers (or worse, your superiors) will kill even the best financial philosophy. It should reflect who you are and what you value, not your peers or colleagues. Your goals and purposes are unique, and a healthy financial philosophy helps you stay committed to those goals regardless of what others buy. 

When I speak at various events, I always say, "comparison is the thief of all joy". Comparison will always illicit a negative emotion. If you compare with those that have more, it creates envy. If you compare with your peers, it creates competition. If you compare with those with less, it creates pride. Each of these emotions will develop a form of self that you, your family, and others will resent in time.

The fact is there will always be someone with more money, a better car, a nicer office, or firmer abs. You will make yourself crazy if you base every expense on keeping up with those around you. Be yourself. Spend your money on what accomplishes your goals. Let others have their abs.

4. MAKE AN IMPACT

healthy approach to money

Use your income to cover mandatory expenses like a mortgage, car payments, and student loans. Invest in retirement, savings, and any accounts that help you plan for the future. But don’t forget to consider ways in which your wealth can make a bigger impact. This is the fun part of building a healthy financial philosophy because it’s where your values take action.

What are the needs in the community where you work and live?

What schools could use new equipment?

What organizations care for populations for whom you’re especially concerned, and what sort of funding might they require?

How might you use your income to make the world a better place than you found it?

Most people in the world are not financially positioned to make a deep impact on their communities. So if you have the opportunity, don't waste it. Your money can be part of making the world better. Consider incorporating that into your financial philosophy and strategy. 

5. FINANCIAL HELP IS OUT THERE

Don’t be afraid to seek out financial professionals who are trained to manage your money properly. As a new physician, there is plenty to worry about without counting every cent you spend. Peace comes from knowing your money is not only secure, but is actively working toward your goals while you focus on your career and the things you value most.