As an ER doc, my first perception of any large financial decision is, "How many shifts will this cost me?" I have an idea of my average income per shift, and it helps me to reconcile major expenses or splurges by deciding whether it's worth working those extra shifts.
There's an important caveat in how to frame any added shifts, which is to ensure that I consider those shifts to be additional shifts per month. Why do it this way? Funny you should ask...
Are You Funding Your Backside Roth?
Since I have a written financial plan, every dollar is a paratrooper with a mission to perform. It jumps out of my paycheck before it can land in my checking account.
- Some goes to debt repayment or whittling down the mortgage.
- Some goes to fund the kids' 529 plans.
- Some goes into my Health Savings Account.
- Some diverts to 401k and Profit-Sharing retirement accounts that lower my taxable income today while keeping a promise made to future me to save for the Toto bidet that will wash and then dry my backside tomorrow (I call it funding my "Backside Roth").
- Some deploys to the taxable brokerage account that will bridge me for a possible decade or more of early retirement.
- Some is invested in my backdoor Roth.
- Some goes to dedicated funds that will pay for milestone events in my children's lives years from now.
My expected income is already fully accounted for, so any new luxury or expense means I not only need to pick up additional shifts but I also need to distribute them throughout the year that I plan to incur the expense.
But Crispy Doc, you protest, as someone who writes about cutting back as an antidote burnout, it seems antithetical to add to your shift load when you can just retire later and pay for today's added expense with an extra month or two of shifts tacked on at the end of your career, right?
Wrong. Nobody likes a person who preys on the elderly. That's why I refuse to kick the can down the road and rationalize poor decisions by saying I'll simply retire that many months later.
If I'm going to add an expense, I'm going to pay for it now when I'm young and yearning, not later when I'm hamstrung with hemorrhoids and heartburn.
Let's say I have an extravagant vacation in mind that I'd like to take in 5 months' time. I calculate it will take 10 additional shifts to pay for it. Assuming the shift supply exists, I'm going to have to add 2 shifts per month for the next 5 months to pay it off. This calculus sounds simple, but it's actually quite complex.
Adding two shifts a month means less time for working out, deepening and maintaining social connections, and playing with kids. It means missing basketball games, sleeping off additional nights and leaving my spouse to fend for herself at social engagements.
The difference between a toasty-just-right job and crispy-all-wrong job can be as little as two shifts.
Everyone is endowed with a fixed quantity of sanity per lifetime. Once spent, you don't get it back. Think of all the docs people you've interacted with over the past month. You can identify with great precision those who spent their allotment early.
To summarize, in calculating how many shifts an added expense will cost me, I can better assess the true costs by:
- Agreeing to work the shifts now, in real-time.
- Never using dollars that already have assigned jobs.
- Acknowledging the impact on balance at home, health, family and partner (my partner always gets veto power)
This ensures any additional shifts I take must be absolutely worth the non-economic costs might inflict.
How do you evaluate the costs when deciding whether to increase your workload to increase income or offset special expenses?