Living on 50% of our income saved us from disaster

Saving Money

By: Dr. Cory Fawcett |

After graduating from medical school I acquired my first real job as a general surgery resident. It was great to finally have an income after spending so many years borrowing money to eat. My pay wasn’t much, about $3 an hour after calculating all the overtime. Residents worked about 100 hours per weeks back then.

I got married four months later resulting in my wife giving up her job and moving to where I lived, 850 miles away. We were able to live fine on my income.

After we settled into our new life together, she found a 40 hour a week job that paid about the same monthly salary as my 100-hour a week job. We decided to continue living on only my salary, not boosting our lifestyle with her income. Her paycheck went into savings, paying off my student loans, and our retirement accounts. We had no way of knowing that this one decision would save us from disaster a few years later.

Growing up, we had heard things like; “live on less than you make,” “buy a house based only on one spouse’s income so if something happens to one of your incomes, you won’t lose the house,” and “you might lose an income when the first child comes along.” We took this advice to heart. While all the other residents were starting to spend money on cars and buying houses, we chose to stay in our apartment and drive the cars we had.

Throughout my five years in residency, we each got an annual raise, but we stuck to our plan. Our lifestyle creep matched the increased income of just my paycheck.

At times it was difficult to see the other residents drive up in brand new cars. Now that they could finally afford the payments, they purchased their “doctor cars” and dug even deeper into debt. We did get a car to replace my 12-year-old Oldsmobile Delta 88 when it started to go to the shop too often. I couldn’t afford the time it took to take the car to the shop or to be without a car while it was there. We bought a one-year-old Ford Taurus and stopped making trips to the auto repair shop.

The final year of residency was when we started job interviews for our “big boy” paycheck as practicing physicians. I interviewed at seven places in Oregon and picked my favorite. I let the other employers know I was taking a job elsewhere and started negotiating the contract for my dream job.

As the end of my training approached, the group I was going to join had really been dragging their feet about getting my contract signed and they eventually told me they had found someone else for the position. When I verbally agreed to work for them, I stopped looking for other opportunities and I thought they stopped looking too. That was not the case. Since the contract was not yet signed, they continued looking, unbeknownst to me.

I was devastated. There was now less than 3 months until the end of my residency and I didn’t have a job. All the other opportunities I had interviewed for had finished their hiring process. There were no job openings left at this point. There was not a doctor shortage then, so jobs were at a premium. We had a one-year-old and I was worried about how I would provide for my family if I didn’t have a job. It brought me to tears.

This could have been a disaster, but my wife stepped up and saved the day by pointing out that she still had her job and if she didn’t leave it, as we had planned, we could stay in our apartment and live off her income until I found the right group to join. She could keep working for as long as it took for me to find my dream job. I didn’t need to settle for the first thing that came along, just to pay the bills.

She was right. We were only living off one income and saving the rest. If I didn’t have a job, we would just stop saving her income and use it to live on, so we were financially just fine if I didn’t have a job.

I was able to restart my job search without an attitude of desperation and could approach my interviews with confidence and from a position of strength. In searching for my dream job, I knew I didn’t “have” to have a job.

One of the partnerships I had spoken to earlier already had a new surgeon selected and hadn’t been interested in me during my interview period. I received a call from this group when the surgeon that was to join their group said he wouldn’t be coming as he had changed his mind. Guess who was first on their list of doctors to interview. I hopped on a plane that next weekend and landed my dream job, this one even better than the first. I wrote about finding this job in detail in my book, The Doctors Guide to Starting Your Practice Right, if you want the longer version.

A few years later I ran into the guy who got that first job instead of me. He was not happy there and had begun looking for a new job. It turned out that losing that job was a great thing for me, I just didn’t know it at the time. Lucky me!

You never know what things will be thrown at you in life, but if you spend significantly less than you earn, you will have a lot more options available when they happen. The choice to live on half of our income saved us that time. If we had been living on both of our incomes and making car payments and house payments, this could have been a disaster.

Last modified: December 15, 2018

2 Responses to :
Living on 50% of our income saved us from disaster

  1. Love it! Great reminder about the unexpected benefits of living below your means. Thanks for sharing!

  2. Phillip says:

    Any employer who gives you an offer but still looks for other candidates isn’t a place worth working. You dodged a bullet indeed.

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