To continue on from my post yesterday about why resident’s shouldn’t buy houses, I wanted to address patience, and why it can be a huge asset to building a solid financial foundation. For those who are finishing nursing school and residency, it’s exciting not only because you’re beginning to enter your chosen career, but also because it generally means a higher quality of living that comes with increased pay. However, being patient when you start getting paid may be one of the best decisions you can make for your financial future.
Building Your Foundation
It’s very tempting to buy a big house or a new car or other large purchase as soon as you finish school/residency, but let’s take a look at what that money could also be spent on that may make more sense in the long run.
Paying off debt, whether that’s student or credit card
Create an emergency fund
Contribute to retirement accounts
Saving up for a down payment to reduce your taxes and mortgage.
These are all great uses of newfound income that don’t include making big purchases right off the bat. I know it can be difficult to have patience especially after working so long on such lean means, that when you finally start having real money come in you want to celebrate and leave that residents life behind. It’s also difficult to visualize how you want the end of your career to play out especially when you’re just starting out. Well, starting to get the above things in order vs buying a big house immediately could be the difference between an early retirement and trying to avoid burnout in 20 years.
The Disease of Impatience
There are many reasons residents and nursing students make large purchases after finishing school, from societal pressure to show how well you’ve done to the real estate industry telling people they’ll be happier in a big house. These pressures are real, so I don’t want to downplay their effect, but they may not be acting in your best interest. As I mentioned earlier, that house purchase could be the difference between contemplating early retirement and staving off burnout, but it’s not the actual house that did that. It’s giving in to the disease of impatience (the only cure for which is more cowbell), the house is merely a symptom of that disease that can spread and undermine the financial foundation you’ve built.
It’s a great day when you’ve finished nursing school or residency, and one that should be celebrated, but it’s never too early to think about the future. If you want help gaining some insight into how best to prepare for that, reach out and I’d love to walk through it with you.