The hidden financial anxiety of doctors

Like most doctors, I deal with stressful situations and must act in the face of uncertainty all the time. All with relative calm. I also write about personal finance, have had a high income and invested well. So, it would surprise most people to know that I have struggled with various forms of financial anxiety. I now know that this is relatively common. Some aspects are more common amongst physicians than in the general population and it doesn’t correlate well with wealth or financial literacy.Your experiences and reactions will differ from mine. Still, sharing what I have learned firsthand, from family and colleagues, and from experts may help you reflect on your relationship with money—and perhaps find something new to try.Our money story starts young and the script lingersLong before we learn anything about the math of money, we absorb a set of beliefs about it from what we see while growing up. Jessica Moorhouse, accredited financial counsellor, and author of Everything but Money, describes this as our “money story.”The stories vary, but a common one behind financial anxiety is a period of real or perceived scarcity. Most families face financially difficult stretches: migrating, job loss, illness or accidents. It can also be relative, with a wealthy family stressed by a major transition. Most physicians also live through significant financial stress as adults during training and early practice.Shine a light on the monster under the bedDuring those periods of real financial stress, fear is adaptive. It drives us to take action. Unaddressed, it feeds anxiety. In my case, my money story set me up for fear during training.My parents had secure middle-class jobs, lived below their means and were solid savers. Our own position was strong, but that did not matter: They had grown up with real financial scarcity. That set them up to always be planning for an extreme financial calamity that they felt was lurking around the corner. My younger self internalized that unease.Fortunately, my parents also gave me tools to address it. When cash flow is tight, tracking it and planning with a budget helps. It discourages frivolous spending, but the bigger benefit is psychological. Undefined fear is worse than a defined problem. “I don’t know if I’m going to be OK” is corrosive and unanswerable. “With my budget, my line of credit peaks at $200,000 in June of my final year and starts falling four months after I start practice” is a plan. As doctors, our debt level is often beyond the experience of our family and friends. So, map far enough forward to see the difference a physician income makes. If the numbers don’t work, a forward-looking plan gives you time to make changes so that they do.Keep a hammer under your pillowPair planning with a buffer. You instinctively know the unexpected happens. It is less frightening if you have planned for it. Early on, a real cash cushion may not be realistic, and carrying cash while paying interest is inefficient. Mentally assigning a portion of your credit line as your emergency buffer—money you don’t spend or count as available—can help. The monster under the bed is less scary if you have a hammer in hand ready to bonk it between the eyes if it pokes its head out.When financial ghosts continue to haunt youOur money story continues to shape how we feel even when our situation changes. Fear that was adaptive during real danger can persist and drive suboptimal choices later. Some are conscious of that ongoing anxiety, but it also shows up in subtler ways.Financial anxiety shows up most concretely in how we earn and spend. Worry about running out leads to a scarcity approach: Money is a resource to be tightly guarded. On the earning side, that may mean never turning down a chance to earn more. On the spending side, it may mean not spending—even when you should.In my early career, my financial anxiety manifested through working as much and spending as little as possible.Isn’t that just being hardworking and frugal?The difference is what you are passing up, and how you feel about it. The occasional extra shift to fill a gap, earn some cash and do work you enjoy is fine. But what if it perpetuates a systemic staffing problem, burns you out or costs you important time with your family that you cannot reclaim? The tell is whether it leaves you conflicted, regretful or straining your other relationships.Those same feelings can accompany spending, where we call it buyer’s remorse. That conflict is the core of Dr. Scott Rick’s research and his book Tightwads and Spendthrifts. Roughly a quarter of us are spendthrifts, at the opposite end of the spectrum from where I landed. They spend freely in the present and their anxiety does not surface until there is an unignorable calamity. Another quarter are tightwads and where you fall has little to do with your income.My early money story gave me plenty of good things. My parents taught me to work hard, budget carefully and enjoy things that don’t cost much. They equipped me with enough DIY skills to be self-sufficient. That sounds frugal, and mostly it was. Still, some tightwad tendencies came with it.A tightwad differs from someone who is simply frugal in that they don’t spend even when they should. The act of spending is psychologically painful, so it is also hard to enjoy what you do buy. A frugal person enjoys the process of saving and is unconflicted. A tightwad is not really choosing wisely—and knows it on some level.A different kind of buyer’s remorseI am a recovering tightwad and will illustrate with a story. In my early career, we bought acreage and reforested it. Keeping the weeds down while the seedlings established cost me a couple of days a week pushing a regular-sized lawnmower. Neither my family nor I were happy about the time I was missing with them. Still, spending tens of thousands on a tractor, or hiring someone, was counter to how I was raised. Ultimately, teasing from my farmer-neighbours and more direct instructions from my wife resulted in a tractor.When I bought my tractor, I experienced buyer’s remorse from a different angle—I regretted that I had spent too much time when I should have spent money sooner. Reframing it that way has given me a new lens to consider my spending. It also helped me savour the full joy of a 40HP big-boy-toy for many years.More wealth doesn’t necessarily make it betterYou would think that accumulating more wealth would ease the conflict about spending. Ironically, those who have accumulated the most often have the toughest time using it. The longer we work and save, the more money we have—and the less time left to enjoy it. Some spending also has an expiry date, like a physically demanding trip or the years when your kids still want to travel with you. Money not spent on those is not deferred, it is forfeited. Changing from saver to spender does not come naturally, especially if anxiety is what drives the saving.Spending well and with confidenceBudgeting and planning are not just an exercise for when money is tight. They help you spend better, and with confidence, as your financial power grows.For fellow tightwads, pre-assigning money lets us acclimatize to spending it before the time comes. For spendthrifts, it sets guardrails. A plan also makes the trade-offs explicit. To get the most from that, you need to know what you value and what your time is worth—I have written about both previously in the Medical Post. Be aware, though, that financial literacy cuts both ways. Understanding the opportunity cost of spending now rather than compounding it for decades can worsen tightwad tendencies, particularly against a goal as vague and distant as retirement.Long-range projections for your retirement and residual estate make the trade-off between spending now versus later concrete. Stress-test them. Anxious people are not reassured by optimism; they are reassured by seeing the bad scenarios modelled and surviving them on paper. For a spendthrift, that may bring some appropriate concern into the present, motivating them to automate adequate saving. For a tightwad, it gives permission to spend time and money on what matters now, while alive, rather than living poor to die rich. That matters all along, but is vital near retirement when the switch flips from accumulating to decumulating.Don’t let anxiety cast a shadow over the stages of your financial life. Shine a light, choose your path deliberately and tread with confidence.Dr. Mark Soth is a physician in Hamilton and writes the Loonie Doctor blog.

The hidden financial anxiety of doctors

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