Budgeting personal finances will always be a relevant topic to us physicians. That being said, we wanted to explore and learn some budgeting tips from the perspective of someone who has ample experiences with handling money to having the right money mindset. This is a Q&A interview with Ayannah Roriva, the person behind a personal finance platform called ‘Bettter Living with a Budget’. We hope you get to pick up some lessons that you can apply in your everyday lives!
Being an owner of a personal finance platform, could you explain what you do on a day-to-day basis?
- I work a full time job as well as run Better Living With a Budget. I make time to work on this in the morning, after I get home from work, and the weekends. On a daily basis, I check emails/messages on Instagram and stay active in the #DebtFreeCommunity to promote my brand. I also read articles and watch YouTube videos pertaining to personal finance to stay abreast of the latest and greatest. On the weekends, I dedicate my time to a new path that I want to take – offering my services on a one to one basis as a personal finance coach. I have a couple of beta clients that I’m working with currently to help solidify my process and techniques before I go live.
How did you get to where you are now?
- I was always a saver. Even when I was in elementary school, I would keep the money my grandparents gave me instead of spending it on a toy. So I was accustomed to not having to ask for money. When I got to college though, I still ended up living the broke college kid life while I worked. I didn’t want to take out any extra loans, so I ended up with no money to work with one day during my senior year (thankfully, payday was the next day). After I reached that point though, I started researching how to better handle my finances. I stumbled upon gurus like Dave Ramsey, Suze Orman, and Ramit Sethi and just devoured their books. I had $31,000 of student loan debt and a $16,000 car loan when I finally had enough. My husband and I got serious about tackling the debt and we were able to become debt free within 5 years of me graduating. This entire journey solidified my passion for personal finance and I was compelled to share my journey and help others achieve their financial goals as well.
What’s the most effective budgeting advice that you suggest?
- Be intentional with your spending. A lot of times, budgets don’t work because people impulse buy or don’t plan ahead properly. Before you spend money on anything, ask yourself if you really need it. Is there a more cost effective option or can it wait until another pay period?
What do you think are the top 3 budgeting mistakes people do?
- Not budgeting realistically. You can budget $200 a month for groceries but if you currently spend $600 and you have a family of six that you have to feed, you’re setting yourself up to fail and get discouraged. That leads to giving up on budgeting all together. Track your spending for a couple of weeks or go back through bank statements to see what numbers you should use.
- Not keeping track of their expenses throughout the budget period. A budget doesn’t do any good if you only look at it at the beginning and end of the period. You would have to constantly see where you are to assess either where you can make improvements or where you’re performing really well.
- Not including any fun money. Everyone likes to treat themselves from time to time and it’s important to put money aside for that to help keep morale high. Having fun is NOT prohibited when you are on a budget.
What budgeting strategies would you recommend to these people?
- People who aren’t in the medical field tend to have the assumption that physicians have a lot of discretionary income to spend on nice cars, big houses, etc. However, a lot of physicians are bogged down with a lot of student loans. I think the best thing to do if you are in that boat, is to not let lifestyle creep hinder your ability to pay the loans back. There will be temptation to live up to that assumption of being able to afford an unbelievable home, but imagine being able to buy your dream home without the student loans breathing down your neck for the next 20 years by simply living like you are still in medical school for 2-3 years (maybe even less!).
Do you have any specific advice for high net worth individuals like physicians?
- Once you reach the level of having a high net worth, it’s going to be important to protect it. Make sure you have the proper insurances in place. Also, I would suggest having 12 months worth of expenses set to the side somewhere where you can access it if you need. However, not in your checking account and not in the stock market. Preferably, this would be in a high yield savings account. That way you’re guaranteed to be fine even in a worst case scenario.
What’s your final thoughts and tips for people who are aiming to budget more?
- Find a method that works for you. Some people prefer an app but you can use an excel spreadsheet or even just pen and paper. Whatever method you choose, just be sure to set your budget based on your current spending habits and refer back to your budget often throughout the budget period. Don’t get discouraged if you find that you keep going over. You can move the money from one category to the other or you can go back to the drawing board and see what you can do differently.
Ayannah Rovira is an army wife on a mission to achieve financial freedom and enjoy life while doing it. She believes it’s important to focus on both your health and your finances without sacrificing one for the other. You can read more about her story here.
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