Too late?

[Bbchi]

so I started reading WCI. I'm 10 years out of residency and did not follow the rules. Where to start now? 401K maxed and college fund started so we're not total losers but do have sole credit card debt and spend too much $$. Overwhelmed and afraid I can't turn it around. BTW, turn 45 this year.

[ENT Doc]

You can turn it around.  Any more details on income, expenses, debt, interest rates on the debt, net worth, # kids, etc.?  If you have credit card debt I would stop spending on anything remotely frivolous and pay that down immediately.

[Anesthesia84]

I was totally overwhelmed when I finally decided to figure out hard numbers and make a plan! I started by getting the records of all of our debts and putting them in a spreadsheet. Then I listed our assets (which were way less than our debts). Then we sat down and tried to figure out a budget based on what we thought we were spending..... in the end, I signed up for mint to track what we were actually spending. It was helpful to figure out real numbers, and now we don't use it anymore at all since we spend so far below our income (this took awhile though!).

I'm sure if you provide more information, people will be happy to help.

WCI also has some helpful "beginner" posts:

Some Financial Pearls For My P.A.

The Bare Minimum

Good luck!

[Hatton]

I will also chime in that in order to give you advice you need to post a few more details.  You have time at 45 to get yourself into financial shape but you first have to know where you are.  You need to actually track your spending (Mint, Quicken, Personal Capital) and calculate your net worth.  Post your retirement asset allocation for advice.  Do you have a whole life policy that you need to ditch? etc.

[q-school]

if you are really overwhelmed, maybe a fee only planner would be good to help create a plan that you could feel confident in?

if you read too many of these threads, you can get the sense that everyone is financially ready to retire by 45.  not true!  there are a lot more people who are closer to where you are than are financially independent at 45.

you have plenty of time.  you just have to prioritize what's important.

good luck.

 

[Kamban]

Bbchi wrote:

sole credit card debt and spend too much $$. Overwhelmed and afraid I can’t turn it around. BTW, turn 45 this year.

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You have 25 years to work and retire like normal people. Don't get too hung up with early retirement. Just because some have FI at 45 does not mean that they retire at 45 or 50.

Credit card debt is high interest debt. So try and clear it soon.

Find out where you spend too much and see who is responsible for it and tackle it in a mature way. If you can save 25-30% of your pay and invest it and not have any major debt, you will be fine at retirement.

Please post details.

[jfoxcpacfp]

Bbchi wrote:

so I started reading WCI. I’m 10 years out of residency and did not follow the rules. Where to start now? 401K maxed and college fund started so we’re not total losers but do have sole credit card debt and spend too much $$. Overwhelmed and afraid I can’t turn it around. BTW, turn 45 this year.

Click to expand...

What's important is that you have made the decision to turn it around. Yes, you can do this. The good news is that you don't have to win the lottery - you've already won by deciding to become a doctor. You already have the biggest tool you need to reverse course - earning potential.

I won't promise it will be easy, but you've taken the first step. Don't keep looking in the rear-view window unless you want to go backwards. You and your spouse need to be on the same page - might help to get him/her to read some posts on WCI.

The One Page Financial Plan is a basic, logical instruction guide to starting to get your financial life in order. Whether or not you decide to seek professional fee-only advice, I recommend you read this book first.

btw - many readers of this site are no different than you, except they are embarrassed to post their stories. High fives to you for doing so.

[RadDoc6876]

It takes 1) time, 2) knowledge, and 3) disciplined financial behavior.  You probably do have enough time depending on the amount and type of indebtedness.  A key question there is what specialty are you in and can you keep doing it from now until your retirement years.  Knowledge you get here on the WCI web site--click Start Here on the home page and read everything there, then read it all again.  Disciplined financial behavior is the real secret to success and is strictly up to you.

[WallStreetPhysician]

It's not going to be easy, and you'll need to make some sacrifices, but you can do it. Having a doctor salary makes rectifying past financial mistakes much easier. Here was a nice post by WCI about a year back that you might be interested in:

How To Punch Out of Medicine in 10 Years

-WSP

[PhysicianOnFIRE]

It's never too late.

You're only 45. Way better to have an epiphany now rather than 55 or 65 or never.

Start with the simple and obvious things. Eliminate your credit card debt. Calculate your net worth. Track what you spend. Read a book or two. You don't have to change everything at once, but you've got to start somewhere.

Good luck!

-PoF

 

[BlueMonday]

No you are absolutely NOT too late. Let me tell you my story - I was 38, married with two kids. Almost $400k in student loan debt, some of it in default (credit score of 585!), and a house that we bought for $850k that was worth now worth $750k and only about $100k in our retirement accounts. Over the last 10 years we paid off the debt, sold the house and rented a small one for two years, and have accumulated about $2M in savings. To paraphrase WCI, live like a resident until you get back on track.

[VagabondMD]

"The journey of 1000 miles begins with a single step."

 

-Lao Tzu

[adventure]

BlueMonday wrote:

No you are absolutely NOT too late. Let me tell you my story – I was 38, married with two kids. Almost $400k in student loan debt, some of it in default (credit score of 585!), and a house that we bought for $850k that was worth now worth $750k and only about $100k in our retirement accounts. Over the last 10 years we paid off the debt, sold the house and rented a small one for two years, and have accumulated about $2M in savings. To paraphrase WCI, live like a resident until you get back on track.

Click to expand...

Guest blog post would be cool...

[Bbchi]

2 kids, twins, finishing kindergarten. 15K credit card debt approx. have $$ in savings to pay it but then would have no savings. $100k med school debt, 3-4% interest. Mortgage around 500k I think. Good credit score. Ob gyn. Would love to change careers. But feel trapped financially.

[StarTrekDoc]

Never too late!.  Read PoF levels --- you're Dr D.  Move into Dr A or B mode.

1. The first rule of expense restraint is -- no credit cards.  You savings/debit is all you have and will keep you honest on the spend.   No private school.  No fancy new cars--Honda Accord/Toyota Camry.  No opulent vacations.

2. Pay off all high end debt .  Are you in High Cost of Living area?  500k mortgage sounds like you are; but if not; you're biggest single expense is the house.  If you can't downsize and if you have equity in the house, HELOC/Loan for that debt and pay off the credit card debt now, then close the credit card and rip up the HELOC checkbook.  If you CAN downsize, that should garner serious consideration.

3. Your spouse and kids have to be partners in this too.  Sit them down; go over financials and get their buy-in on expense restraint.

--Ask away on this board; but really get a local financial adviser to help layout a plan that's able to be implemented and followed for the next 20 years with short term milestones and a deep dive again at regular intervals.