What are your Budgeting Tools?

Now that you’ve totaled your income and expenses, the next step is for you to decide how you are going to interact with your budget on a daily, weekly and monthly basis. This interaction needs to be easy, smooth and unobtrusive. Inexpensive is also helpful. Here’s the great news. We all carry around a wonderful piece of technology in our pockets that can solve this problem. There are numerous great apps that allow you to track your budget, connect your accounts and just make your financial life easier overall. However, you don’t have to use an app to budget. If you are uncomfortable signing over all of your financial passwords to a company, there are several other tools you can use. 

A spreadsheet such as Google Sheets, Apple Numbers or Microsoft Excel are tried and true budgeting tools. You can easily use these on your phone and/or laptop. You just have to enter all of the data by hand. As an aside, I personally use Google Sheets for my budget. Why? It’s the habit I formed years ago on Excel and I “stepped up” to Google Sheets so I could have the latest spreadsheet wherever I go. An added benefit, my wife and I can share the sheet and collaborate in real time. You have the basics to get going on this in the spreadsheet we shared with you. 

Some students use Apple Notes or Microsoft OneNote, and since your whole school world probably operates around this software, you could just create a budget tab too. 

Stepping down on the technology spectrum, some people still go old school pencil and paper.  This tried and true method has worked for centuries and still works today. Just get out a notebook and get started! 

Most veterinary students decide to go with an app and technology can be great for tracking your finances. In the last 5 years many great FREE technology tools have been introduced to the public. Here is a Nerdwallet article that covers some of the most popular. Here is another article that lists budgeting tools, most of which are free. 

The most popular purpose-built budgeting apps are Mint, PocketGuard, Wally and Albert. 

Mint is by far the most popular. It’s been a staple of the personal budget world and is constantly improving. It’s owned by Intuit, the same company that owns TurboTax and QuickBooks, so you know that it’s not going to disappear. If you’re short on time and need to get started with a technology tool, give Mint a try. 

If you want to research and make the choice that fits you best, follow those links. 

In the end, the technology and method you use is not important, it's the integrating the process into your life. It doesn’t matter how you keep track of your finances, just that you need to remove any hurdles and find the easiest possible way to record and check your income and expenses. Again, it’s all about habit formation and developing the process. 

What is an emergency fund?

Many veterinarians will experience generalized stress and anxiety, even after their careers are taking off. The source of this stress can be hard to identify. Patients, clients, employers, employees, relationships and kids can all bring stress and anxiety into our lives. But many times, the source of the stress is financial in nature! Even if you are earning good money and comfortable, you still need an emergency fund. Even if you are a student, living on borrowed money, you still need an emergency fund.

One of the hallmarks of being financially well is having a readily available emergency fund. 

Why? Knowing that you are prepared enough to cover unexpected expenses will greatly reduce anxiety and give you a sense of control over your finances. Even subconsciously, if you are worried about covering the costs of a car breakdown, a busted pipe, or a health emergency, you CANNOT be financially well. Having an emergency fund is the only way to combat that stress and anxiety. 

It seems counterintuitive to be incurring debt, while putting money into savings. However, when you need the emergency fund (and trust me, you will) it is much cheaper money than using credit cards. 

Many financial experts recommend having three to six months of expenses in an emergency fund. We absolutely agree with that for previously graduated veterinarians. However, that is likely not achievable for veterinary students or recent graduates. Start with something doable, like $1,000. This will at least cover most of a car breakdown, unexpected travel to a funeral in your hometown, a minor medical emergency or the parts of life that always seem to just happen. 

Make sure you build savings for an emergency fund into your budget. Your financial wellness depends on it! 

Here is a useful article on emergency funds.

Why should I have an emergency fund?

Many things are out of your control! It seems logical, but that realization is lost on some people. Your health and the health of people around you are examples of things you cannot take for granted. But, a rapid downturn in the economy and emergency quarantines are things that can be planned for, no matter how unexpected they are. 

An emergency fund helps you protect your 1) finances and 2) your mental health from these factors that are out of your control. 

That’s right, there are 2 major reasons to maintain an emergency fund. 

1. Your finances suffer greatly when you can’t work and produce income. When you involuntarily can’t work due to illness, injury, a death in the family or a state of emergency you still have expenses. These happen to everyone, at different times for different reasons but tough times are just about unavoidable. The emergency fund is your protection. 
2. The fear of an emergency, without a plan, creates underlying anxiety in everyone. It’s just the way we are wired. So in good times, just having the emergency fund in waiting will help reduce anxiety and fear. Knowing you are prepared and ready, helps you both consciously and subconsciously.
   
   Now, when the actual emergency occurs, and if you can’t pay your bills, your anxiety goes through the roof! Then you are dealing with an actual emergency, that needs your attention, and you are worried about finances. This creates a painful double whammy for most people. This is exactly what many people worldwide are dealing with right now. And they have to make a really tough decision, risk their health and the health of others, because they have no other way to pay their bills other than showing up for work. 

As a reminder, most financial gurus recommend having 3-6 months of expenses in savings. So, do your part! Be prepared and make a commitment to maintain an emergency fund. Do it for your finances and for your mental health. Do it for peace of mind! Having an emergency fund is a major step toward financial wellness.