Creating a budget for 300K salary

Archived From: Finance
  • Go to page :
  • 1 23
  • Text Only
Voting History
rated:
Given the "success" of the recent threads regarding budgeting at different salary levels, I though I'd start my own... Please be gentle.

Here is my situation: I am physician finishing up a fellowship, and will finally become an attending in the summer of the upcoming year. I have already signed a contract with a first year salary of 300K (I am not bragging, just stating the facts). I am also getting married in August, with my fiance making 60K. I have approximately 50K of student loans locked in at a ridiculously low 2.5%, and she has a similar amount with a higher interest rate (around 5%). Together, after the wedding expenses, we have approximately 80K in savings. I also have 10K of IRA funds. Our cars are paid off, and we have no credit card debt. Here is where budgeting comes in:

My fiance really wants to own a house. I am a bit more practical with trying to determine whether buying or renting is the way to go. My plan right now is to rent for 6 months (up to a year) to make sure that I am happy with the job and that they are happy with me, unless a tremendous deal on a house that we absolutely love happens to come up. We are looking at houses in the range of 450-500K. The property taxes in this particular location are very high, in the order of 3.3% of the assessed value of the property, with half of the money going to the local schools.

I am trying to be proactive with my finances, as I have never made more than 60K before and have never owned a property. I would appreciate any tips about budgeting, tax management or making real estate decisions.

Again, I am not bragging. I simply want to ensure that I make the best financial decisions that I can prior to earning a higher income. Thanks in advance for your advice.

Member Summary
Most Recent Posts
Patch you're wrong. Most pre-nups also provide that the parties waive any right to pensions, etc. And they are enforced... (more)

DavidScubadiver (Nov. 11, 2008 @ 4:44p) |

No way he can be a lawyer, If he is I would not want to use him. I did a lot of checking when I did my prenup to make s... (more)

RS4Rings (Nov. 11, 2008 @ 5:10p) |

Thanks for your reply. I have not looked into these types of loans, but my gut feel is that I would be better off putti... (more)

screwdriver (Nov. 11, 2008 @ 6:31p) |

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.
Thanks for visiting FatWallet.com. Join for free to remove this ad.

I would continue to live like you made 60K a year. Save all of your wife's $50K a year towards retirement. That's the best financial move you could make presently.

After the first year is your $300K/year a guaranteed salary or will you be expected to bill to support this salary? What's the potential down swing of your salary? I think 6 months in a new practice isn't sufficient time. I mean what's the rush? Are you up for partner at some point in time? Also if you leave after a year do you have to pay back any of your salary?

Do not buy a house until you absolutely know for certain that you will stay in this practice or two years whichever comes last. Perhaps that should be the time you decide to buy a house. Also with your figures you don't seem to have saved up enough money for a 20% down payment, closing/moving/start-up costs plus the inevitable cost over-runs of a new house. Depending on your local real estate market perhaps now isn't the best time to be buying either if your market is still correcting.

Here is what I would do.

Rent a nice home, close to your new job. You should pay less than $2500 a month for this.
Live in this home for one year. After 1 year, if you still like the job and area. Then decide to buy.
BTW- In a year's time. Those 450k houses will come down in price. Even a better reason to wait.

As far as your loan goes. Personally, I would live as dirt cheap as I could for the next year or two.
With 300k you should be able to pay off you and your wifes loan in a year.
Ignore the low rate, pay the loan off now while you have the income.
Your goal should be to have no outstanding payments at the end of each month on any loan, credit card or otherwise.

Your IRA is to low for your income. You need to max that out as much as possible.

Don't spend ANYTHING from your savings account.
However, move some money around into CD's and other FDIC insured products.

If you'd like more advice, PM me.

Jay

What you really need to guard against is the feeling that you have an endless supply of money. Going from the med school grind to 300 large per year has the potential to do that to you.

Thanks for your advice. 300K is guaranteed, partnership is one year (at which point the salary goes up to 360K). Downswings are always possible in medicine, but difficult to predict. I would expect to maintain the salary even in a downswing, but i would probably have to work more hours to do so. If I leave I do not have to pay back any of the salary. I would also know after six months if I will make partner (thus renting for 6-12 months).

If I did buy a house now, I would find a way to put 20% down. I'd probably have to borrow from my parents, but I'd pay them back in 2 months tops. I could also get an advance on my salary to reach the 20%.

The housing market in the area I am moving to is pretty sheltered. They did not go through a huge boom in the recent years, therefore, I expect that there will be no huge decline either. But i definately agree with your advice: I have very little to lose by waiting a year prior to buying... except for the displeasure of my fiance.

tell that leech to start making money comparable to you or kick her through the door.

I agree with the rent for a year advice, however, there is no way that I will be paying off my student loans sooner than I have to. With the rate of inflation higher than the interest on the loan, I have nothing to gain by doing that. We may pay off my fiance's loans, as her interest rate is higher, and we will not be able to deduct the interest on our taxes.

Also, I think I've done OK with the IRA's so far. I could have put more away, but I've always felt that I needed flexible cash for a downpayment on a house. I will be maxing everything out this year.

JHR1001 said: Here is what I would do.

Rent a nice home, close to your new job. You should pay less than $2500 a month for this.
Live in this home for one year. After 1 year, if you still like the job and area. Then decide to buy.
BTW- In a year's time. Those 450k houses will come down in price. Even a better reason to wait.

As far as your loan goes. Personally, I would live as dirt cheap as I could for the next year or two.
With 300k you should be able to pay off you and your wifes loan in a year.
Ignore the low rate, pay the loan off now while you have the income.
Your goal should be to have no outstanding payments at the end of each month on any loan, credit card or otherwise.

Your IRA is to low for your income. You need to max that out as much as possible.

Don't spend ANYTHING from your savings account.
However, move some money around into CD's and other FDIC insured products.

If you'd like more advice, PM me.

Jay

jackiechiles said: What you really need to guard against is the feeling that you have an endless supply of money. Going from the med school grind to 300 large per year has the potential to do that to you.

That is precisely what I am trying to do and why the other "300K budget" thread struck a cord. I definately do not want to overestimate my assets, and also need a way to shelter at least some of them from taxes.

NewToFatWalletUser said: tell that leech to start making money comparable to you or kick her through the door.

Now, play nice

I'd either buy a smaller home that in the range of easy resale....or do your original thought of renting. From our experience, you will know in 2-3 months whether you like your position, maybe less, my husband knew in 2 weeks that he hated the hospital and we had moved several states. He then had to commute while we sold the house which took a while to sell, depending on how far of a range your job has for its "noncompete clause" it can be a pain in the butt and for sure you would have to stay in a hotel or something when on call. know the "no compete clause" in your contract, it might help with your decision.

From what I've read the prices are expected to go up next year. Depending on where you are living 450-500K range might be harder to sell, say you don't like your new position.

sueruns said: I'd either buy a smaller home that in the range of easy resale....or do your original thought of renting. From our experience, you will know in 2-3 months whether you like your position, maybe less, my husband knew in 2 weeks that he hated the hospital and we had moved several states. He then had to commute while we sold the house which took a while to sell, depending on how far of a range your job has for its "noncompete clause" it can be a pain in the butt and for sure you would have to stay in a hotel or something when on call. know the "no compete clause" in your contract, it might help with your decision.

From what I've read the prices are expected to go up next year. Depending on where you are living 450-500K range might be harder to sell, say you don't like your new position.


While buying a smaller home has crossed my mind, I do not want to be in a position where I need to sell it and buy a new property in a year, when I feel comfortable with my job. If I am going to buy a house, I will be looking for a place that I can call home for at least the next 10-15 years.

I do have a noncompete clause of 15 miles in the contract, which would make for a very difficult commute as the nearest employment opportunities are about an hour's drive away. That is why I really want to rent for a year prior to commiting to a house.

What are your long term goals?

If you live frugally, as another poster mentioned, you could retire at a much younger age.

dundundun said: What are your long term goals?

If you live frugally, as another poster mentioned, you could retire at a much younger age.


Not looking at retirement quite yet, but it would be nice to have the option of early retirement. Long-term outlook is a couple of kids, a dog and financial security. I am not really lloking to become fabulously wealthy, just comfortable.

I think missing out of all of this is a frank and candid discussion now with your fiance about what your financial goals are. The way I see it there will be an earnings differential and if she's not in the position to be making $360K/year that's going to last the duration of your marriage. This may create huge amounts of resentment if it's perceived that you're making most of the household money decisions without her involvement.

This means you need to get on the same page right now, before the wedding, about what your financial goals are. Reading too much into your original post it appears your fiance sees all the zeros after your salary and figures it's time to live like she made $300K. That type of thinking has a way of quickly escalating out of control and if her desire to buy a house is partially driven by this it may be time to get out now.

Again, this may be reading too much into your situation but I think if you haven't had a discussion about your future finanial goals, that may be the best thing you can do for yourself right now. It sounds like you're certainly willing to continue living on your residency salary and that type of mindset will get you financially secure much faster than someone who sees all the zeros and starts making a shopping list.

Lurker1999 said: I think missing out of all of this is a frank and candid discussion now with your fiance about what your financial goals are. The way I see it there will be an earnings differential and if she's not in the position to be making $360K/year that's going to last the duration of your marriage. This may create huge amounts of resentment if it's perceived that you're making most of the household money decisions without her involvement.

This means you need to get on the same page right now, before the wedding, about what your financial goals are. Reading too much into your original post it appears your fiance sees all the zeros after your salary and figures it's time to live like she made $300K. That type of thinking has a way of quickly escalating out of control and if her desire to buy a house is partially driven by this it may be time to get out now.

Again, this may be reading too much into your situation but I think if you haven't had a discussion about your future finanial goals, that may be the best thing you can do for yourself right now. It sounds like you're certainly willing to continue living on your residency salary and that type of mindset will get you financially secure much faster than someone who sees all the zeros and starts making a shopping list.


That is certainly a very valid point. We have had a few discussions about finances, and I do perceive a bit of insecurity when it comes to making future financial decisions. It is not something that I cannot handle however. She knows that I will be the one making the big financial decisions in the household, and, really, all that she desires are a nice house (which I also want) and a dog (I'm 50/50 on that right now, but we will probably get one if we buy). We're going to try to have kids in a year or two, and I think that while the kids are young, she will stay home or work part time. It would make very little sense for her to work as half of her earnings will go to the government and child care is expensive.

Other than the house, we have no big needs/wants right now. Eventually, I'd probably look at getting a vacation home, but that is FAR down the line.

BTW, what should my future financial goals be? Other than a vague sense of needing to be "financially secure", I have no concrete idea of the endpoint that i need to reach.

At 300K per year I would advise you to make most of your time

Live close to work
Get a reliable car
Spend time with your wife. A financially good idea as well
Try giving for a good cause be it a dollar a day
Raise responsible kids. No spoiled brats please

Enough said!

I hope you are going to get a prenup..

Her wanting to buy a house with a 60k salary is based on your salary. If something happens with no prenup, it will be her house...

Your future goals. Based on 360K a year. I'd say the following

20% min into assorted savings account for the next 10 years.
You should have well over 600K in 10 years time doing this alone.

Purchase 2-5 acres of land on a lakefront area. Intent to build cabin/vacation home etc.
Rental income on said home/cabin when your not using it.

Pay off all loans, etc.
Buy used but newer cars at discount price.

Put money aside for kids college fund etc.

In short.
Live on 60k a year.
Put the 300k to work as investments in land, banks, cd's, stock market (careful on that one) IRA, etc.

Oh and SKIP the DOG for now. Your first year, you will be renting. You DO NOT want a dog in your rental house.
You will also be working odd hours and such, the dog won't like that one bit.
However, your local rug cleaning company will LOVE you for it!

Jay

Or you can buy a fixer-upper in a suitable neighborhood and exchange help with somebody like this fix-it guy who says he needs a doctor (source == http://chicago.craigslist.org/chc/bar/909225796.html):
---------------------------------------
I NEED A DOCTOR / WILL TRADE SERVICES
Reply to: sale-909225796@craigslist.org [?]
Date: 2008-11-07, 7:03AM CST

Frank Liebe

Summary of Skills
· Over 20 years of professional experience in carpentry, electrical, and
plumbing.
· Excellent working knowledge of tools and equipment.
· Competent and
comfortable
reading architectural drawings.
· Experienced in gutting and rehabbing old, dilapidated building.

Relevant Experience:
Carpentry
and for self-employment

· Built, repaired and installed counters, cabinets, benches, partitions, floors, doors, building framework and trim using carpenter’s hand tools and power tools. Installed glass in windows, doors, and partitions. · Performed rehab work; stripped building to the framing and rebuilt the same building. · Tiled floors from vinyl to marble to marble, granite or ceramic.Installed thousands of feet of hardwood flooring. · Mounted baseboard and trim work around doors and windows including crown moulding. · Read and assessed blueprints and follow instruction. · Follow building codes for every job.
Electrical · Installed and repaired wiring, electrical fixtures, and control equipment. · Measured, cut, and bendt wire and conduit, using ruler and hand tools. · Drilled holes for wiring using power tools. · Followed building codes for all necessary wiring. · Traced out short circuits in wiring, using knowledge of wiring and test meter. · Performed repairs, such as replacing fuses, light sockets, bulbs and switches. Plumbing · Followed building codes and blueprints to run pipes through walls and floors. · Installed plumbing fixtures, such as sinks, toilets, bathtubs, water heaters, etc. · Broke up concrete floors to access drains for repair. · Increased pressure and performance of pipes by determining if pipes are corroded and full of lime and rust. · Repaired old pipes by cutting them
and replacing with new pipe. Employment: 1980 – Present Carpentry electrical and plumbing, freelance work between jobs, Chicago, IL 1998 – 2001 Christensen Carpentry, Chicago, IL 1992 – 1998 G&G Remolding, Skokie, IL 1980 – 1992 Jim’s Custom Carpentry, Chicago, IL 1992-2006 self employed_________________________________________________________________ 2006-present free lance

* it's NOT ok to contact this poster with services or other commercial interests

PostingID: 909225796

welookgoodcom said: I hope you are going to get a prenup..

Her wanting to buy a house with a 60k salary is based on your salary. If something happens with no prenup, it will be her house...


Would a prenup even be useful? We currently make the same amount of money and have similar assets/debts. There will not be a significant diffence in income until after we are married.

JHR1001 said: Your future goals. Based on 360K a year. I'd say the following

20% min into assorted savings account for the next 10 years.
You should have well over 600K in 10 years time doing this alone.

Purchase 2-5 acres of land on a lakefront area. Intent to build cabin/vacation home etc.
Rental income on said home/cabin when your not using it.

Pay off all loans, etc.
Buy used but newer cars at discount price.

Put money aside for kids college fund etc.

In short.
Live on 60k a year.
Put the 300k to work as investments in land, banks, cd's, stock market (careful on that one) IRA, etc.

Oh and SKIP the DOG for now. Your first year, you will be renting. You DO NOT want a dog in your rental house.
You will also be working odd hours and such, the dog won't like that one bit.
However, your local rug cleaning company will LOVE you for it!

Jay


That all sounds very reasonable. I'm not sure 60K will be enough to live on (I think we spend more now with rent, food, utilities, etc), unless you mean 60K of post tax money.

The way I see it, half of my salary will go toward taxes, property taxes, professional fees, and such. That leaves appr. 180K of post tax dollars to play with. Factoring in student loans (apprx. 10K/year for both of us right now) and mortgage payments/costs of owning a house (rough estimate 60K/year as I intend to double up on the mortgage payments, I will have 100-110K left over. Approximately half of that will end up paying for living expenses (food, clothes, vacations, gas, car maintanence, etc). So, all things said and done I should be able to save 50K for investment purposes (on top of IRA/401 K). Certainly not a bad place to be in, but it seems that I should be able to save more on a yearly basis.

And, you are right: absolutely no dog until we own a house with a backyard

By far I think the most important bit of advice is what Lurker said above: get on the same page as your wife. She can be a stay-at-home-mom, but also be a full partner in the financial decisions in the house. If not, you run the risk of her resentment and your counter-resentment. You want to be married to an adult, don't you? (BTW, adults don't get allowances.)

What you need is the MD's version of the envelope budget technique. I recommend getting bank accounts at a few different local banks and having your paychecks split via direct deposit (30% bank A, 70% bank B). Your big problem is setting a precedent towards lifestyle inflation. Live off the one bank account, and with the other set goals (eg down payment, fully fund 2 retirement accounts, ESA's for kids, etc).

With the house, the best idea is probably renting for a year. A year is really not a long time, and with that time you can do some shopping to find something you can really be happy with.

Depending on how comfortable you are with investing, you might want to see a fee-only (not commission) CPA or CFP. You are going to have the opportunity to invest more than the max limits of standard retirement accounts. Of course, depending on anyone for these decisions is not ideal. There is a list of essential reading that I'm sure you could find around here. Being an MD, it's certainly not beyond you.

Only pay minimum payments on that ridiculously low rate student loan.

But basically, talk to your wife. Everything else will take care of itself. If you are anxious enough about "lifestyle inflation" (ie, blowing the opportunity at a secure and happy life) to post on these forums, you had better be talking to your significant other 20x as much.

edit: grammar

catanpirate said: By far I think the most important bit of advice is what Lurker said above: get on the same page as your wife. She can be a stay-at-home-mom, but also be a full partner in the financial decisions in the house. If not, you run the risk of her resentment and your counter-resentment. You want to be married to an adult, don't you? (BTW, adults don't get allowances.)

What you need is the MD's version of the envelope budget technique. I recommend getting bank accounts at a few different local banks and having your paychecks split via direct deposit (30% bank A, 70% bank B). Your big problem is setting a precedent towards lifestyle inflation. Live off the one bank account, and with the other set goals (eg down payment, fully fund 2 retirement accounts, ESA's for kids, etc).

With the house, the best idea is probably renting for a year. A year is really not a long time, and with that time you can do some shopping to find something you can really be happy with.

Depending on how comfortable you are with investing, you might want to see a fee-only (not commission) CPA or CFP. You are going to have the opportunity to invest more than the max limits of standard retirement accounts. Of course, depending on anyone for these decisions is not ideal. There is a list of essential reading that I'm sure you could find around here. Being an MD, it's certainly not beyond you.

Only pay minimum payments on that ridiculously low rate student loan.

But basically, talk to your wife. Everything else will take care of itself. If you are anxious enough about "lifestyle inflation" (ie, blowing the opportunity at a secure and happy life) to post on these forums, you had better be talking to your significant other 20x as much.

edit: grammar


Thanks for the sound advice. I do feel that my fiance and I are basically on the same page. The only real discussion is the timing of the home purchase. I am leaning towards renting for a year (which we will do unless an unforceen "bargain" comes along) and she, purely on an emotional level, wants a house. The main difference is that she grew in a house in a mid-size city, while I grew up in an apartment in a very big city. She likes the idea of a backyard and of owning, and I am a little leary. All that being said, I will be the one making financial decisions of this magnitude, if only because I have a cool-head mentality and know how to deal with the bottom line.

BTW, I REALLY like the idea of the envelop budget technique. I will certainly employ that in the future.

I think the house you are looking to buy is rightly priced for you, assuming its big enough and in an area whose schools are good enough for your future kids. Presumably, once you get made partner you'll have other expenses, no? Do you ever have to pay your own malpractice insurance?

Since its not a gradual increase in salary you'll have, I'd consider renting a nice house for a year until you get a sense of what your income and expense situation is going to be like. Doctors are typically high income and low net-worth individuals because they lack the time or inclination to watch after investments. The good news is that you are no doubt young and will have a long time of high earnings ahead of you. Make sure you are paid up on disability insurance, just in case. Once you see what you can save after making appropriate investments, etc., you'll know about what you can afford in terms of a house.

A prenuptial wold be useful, yes. It would help protect against a claim that your increased earnings capacity were the result of her marital contribution. It also helps insure that the money you came to the marriage with stays (if kept separate) with you if the marriage should end.

DavidScubadiver said: I think the house you are looking to buy is rightly priced for you, assuming its big enough and in an area whose schools are good enough for your future kids. Presumably, once you get made partner you'll have other expenses, no? Do you ever have to pay your own malpractice insurance?

Since its not a gradual increase in salary you'll have, I'd consider renting a nice house for a year until you get a sense of what your income and expense situation is going to be like. Doctors are typically high income and low net-worth individuals because they lack the time or inclination to watch after investments. The good news is that you are no doubt young and will have a long time of high earnings ahead of you. Make sure you are paid up on disability insurance, just in case. Once you see what you can save after making appropriate investments, etc., you'll know about what you can afford in terms of a house.


Actually, the practice takes care of the malpractice insurance and I really should have no increase in out-of-pocket expenses. The areas where we are looking have excellent public schools (thus very high property taxes).


A prenuptial wold be useful, yes. It would help protect against a claim that your increased earnings capacity were the result of her marital contribution. It also helps insure that the money you came to the marriage with stays (if kept separate) with you if the marriage should end.


Can you elaborate on the first part of that statement? We are both bringing equal assets into the marriage, so the prenup would be useless there.

Well, as an example, she might spend what she comes to the marriage with, or lose it somehow. if you maintained your own premarital assets separately, you would not need to split them later. The real benefit to a prenuptial agreement is that you don 't have to "fight" over the money if you go your separate ways. Its pretty much taken care of. You spell out that the retirement accounts will not be split (just make sure you both fully fund the accounts available to you, that way its actually fair if you split, even if you were primarily responsible for funding her account).

it also protects against the spouse's claim that she should get a share of your future earnings/a share of the partnership which you obtained while married. You really really don't want to have to have your partnership interest 'divided' if the marriage ends.

DavidScubadiver said: Well, as an example, she might spend what she comes to the marriage with, or lose it somehow. if you maintained your own premarital assets separately, you would not need to split them later. The real benefit to a prenuptial agreement is that you don 't have to "fight" over the money if you go your separate ways. Its pretty much taken care of. You spell out that the retirement accounts will not be split (just make sure you both fully fund the accounts available to you, that way its actually fair if you split, even if you were primarily responsible for funding her account).

it also protects against the spouse's claim that she should get a share of your future earnings/a share of the partnership which you obtained while married. You really really don't want to have to have your partnership interest 'divided' if the marriage ends.


Interesting, I did not realize that one can protect future earnings. Can a prenup spell out the datails of alimony?

Yes, it can. It can't spell out child support, however. Its a little awkward to talk about with your fiancee, but if its going to be done it has to be talked about at some point, preferably long before the wedding day! You can't pull one of these things out of the desk drawer on the eve of a wedding and expect your marriage to last, or for it to be enforced if she signs it.

Do not marry her if you do not love and trust her opinions enough for her to be an equal finanial partner in your marriage. She gets the exact same say you do. If that scares you you should not get married

OP

I believe in being wise. But , damn, don't get married if you need to do the pre-nup. Be honest about the relationship.


Your are so set financially. If you and the wife can get your minds right, you two can realize DREAMS at a very young age. Whether these dreams be starting your own charity practice, retiring early, whatever. But if she is like 98% of women (99.9% of women about to close the deal and marry a professional), she is willfull and ready to get hers. See I love that house (AKA suzanne researched this)

All you two have to do is live one step below your means for a short period. As a prior poster said, if you two can find a fixer upper or foreclosure --- you are done. This is so easy, but few take the road, b/c they just do not have to.

This issue is not finance. .. its mindset.

I wish we could get an honest update 6 months after the wedding.

I feel like you've got your head screwed on mostly straight, Screwdriver, but I'm sensing some resistance to the suggestion of making your fiancee an equal partner in the financial planning.

It's CRITICAL that you each have input in the finances.

I sat down with my wife-to-be a few months before the wedding and went over everything - how much I had in savings, how many credit cards I had, my feelings on debt, my student loans, everything. We did the same with her situation.

That way, there were no surprises. We kept the same behavior after getting married.

I'm the saver, she's the spender, so I create a budget, then she reviews it. We negotiate, and finalize a budget we can both agree upon. I provide the majority of the financial leadership, which she really appreciates, and it prevents resentment while building strong bonds in the marriage. Make sure you involve her in your planning, or one of you will get a rude awakening early in the marriage. Money is one of the main causes of marital failure...don't let it happen to you!

InfiniTrent said: Money is one of the main causes of marital failure...don't let it happen to you!

My divorced friends say that the #1 cause of marital failure is marriage.

screwdriver said:
BTW, what should my future financial goals be? Other than a vague sense of needing to be "financially secure", I have no concrete idea of the endpoint that i need to reach.


In order:
1. Down Payment
2. Fully fund all available retirement accounts
---a. 401k with your employer up to the employer match (talk to Human Resources?)
---b. a 401k for her (whether or not she is employed)
---c. consider Roth IRA's if you're going to want to live large in retirement
3. If kids are around, fully fund Educational Savings Accounts (ESA's) for their college or charter/private schools
4. Welcome to Investor Dreamland!
---a. save for second down-payment on cottage
---b. open traditional brokerage account

For more specific advice on building a portfolio go here. (What I've said is simplistic and might not be quite right.)

And again, I just want to reflect back to you screwdriver that you have painted your fiance as emotional and insecure, where as you are rational and competent.

Lurker1999 said: I would continue to live like you made 60K a year.The tax strategy is going to be significantly different.

patch96 said: OP

I believe in being wise. But , damn, don't get married if you need to do the pre-nup. Be honest about the relationship.


Your are so set financially. If you and the wife can get your minds right, you two can realize DREAMS at a very young age. Whether these dreams be starting your own charity practice, retiring early, whatever. But if she is like 98% of women (99.9% of women about to close the deal and marry a professional), she is willfull and ready to get hers. See I love that house (AKA suzanne researched this)

All you two have to do is live one step below your means for a short period. As a prior poster said, if you two can find a fixer upper or foreclosure --- you are done. This is so easy, but few take the road, b/c they just do not have to.

This issue is not finance. .. its mindset.

I wish we could get an honest update 6 months after the wedding.


I do not feel that I need to do the pre-nup at all. However, I also do not know what lies around the bend: no one does. If a piece of paper can provide me (not us) with financial security, why not? I am trying to live below my means and save actively. My ultimate goal is to amass enough of a cushion that would make it possible to live off the interest without touching the principal. I am willing to forego fancy cars, auperexpensive vacations, season tickets, expensive jewelry etc. to reach that goal.

screwdriver said: patch96 said: OP

I believe in being wise. But , damn, don't get married if you need to do the pre-nup. Be honest about the relationship.


Your are so set financially. If you and the wife can get your minds right, you two can realize DREAMS at a very young age. Whether these dreams be starting your own charity practice, retiring early, whatever. But if she is like 98% of women (99.9% of women about to close the deal and marry a professional), she is willfull and ready to get hers. See I love that house (AKA suzanne researched this)

All you two have to do is live one step below your means for a short period. As a prior poster said, if you two can find a fixer upper or foreclosure --- you are done. This is so easy, but few take the road, b/c they just do not have to.

This issue is not finance. .. its mindset.

I wish we could get an honest update 6 months after the wedding.


I do not feel that I need to do the pre-nup at all. However, I also do not know what lies around the bend: no one does. If a piece of paper can provide me (not us) with financial security, why not? I am trying to live below my means and save actively. My ultimate goal is to amass enough of a cushion that would make it possible to live off the interest without touching the principal. I am willing to forego fancy cars, auperexpensive vacations, season tickets, expensive jewelry etc. to reach that goal.


Understood, but since you are both starting out with relatively little - in comparison to what you will amass in 2 to 5 years, I believe the pre-nup saves you, if needed , very little.

The key (focus) is the relationship, not the divorce insurance

That's a lot of hookers and blow! I'm sure you'll be fine.

InfiniTrent said: I feel like you've got your head screwed on mostly straight, Screwdriver, but I'm sensing some resistance to the suggestion of making your fiancee an equal partner in the financial planning.

It's CRITICAL that you each have input in the finances.

I sat down with my wife-to-be a few months before the wedding and went over everything - how much I had in savings, how many credit cards I had, my feelings on debt, my student loans, everything. We did the same with her situation.

That way, there were no surprises. We kept the same behavior after getting married.

I'm the saver, she's the spender, so I create a budget, then she reviews it. We negotiate, and finalize a budget we can both agree upon. I provide the majority of the financial leadership, which she really appreciates, and it prevents resentment while building strong bonds in the marriage. Make sure you involve her in your planning, or one of you will get a rude awakening early in the marriage. Money is one of the main causes of marital failure...don't let it happen to you!


I did not mean to make it sound like I will totally control the purse strings. It is just that I will be the ultimate veto power on very expensive purchases, like house, new car, vacation property and such. I do not really care to control the smaller things, such as food budget, clothing, kid-related expenses (once we have them). I trust her to make good financial decisions and 99.9% of the time she does.

For example, left to her own devices she would buy a house, so that we can move into it as soon as I start the new job. She would also probably buy a more expensive house than I would consider, because she is emotionally attached to a "house" and because she does not really understand how much the property taxes will impact the value of the house as an investment. We have had several conversations about that, and I was able to convince her to see my point of view, but I can tell that she still WANTS to own a house from day one. That is why I need to keep control over the finances to a certain degree. I certainly would not expect to make an expensive purchase without consulting with her, and expect the same in exchange. Bottom line: I feel that I need to approve major purchases to make sure that our finances are in order.

patch96 said: screwdriver said: patch96 said: OP

I believe in being wise. But , damn, don't get married if you need to do the pre-nup. Be honest about the relationship.


Your are so set financially. If you and the wife can get your minds right, you two can realize DREAMS at a very young age. Whether these dreams be starting your own charity practice, retiring early, whatever. But if she is like 98% of women (99.9% of women about to close the deal and marry a professional), she is willfull and ready to get hers. See I love that house (AKA suzanne researched this)

All you two have to do is live one step below your means for a short period. As a prior poster said, if you two can find a fixer upper or foreclosure --- you are done. This is so easy, but few take the road, b/c they just do not have to.

This issue is not finance. .. its mindset.

I wish we could get an honest update 6 months after the wedding

I do not feel that I need to do the pre-nup at all. However, I also do not know what lies around the bend: no one does. If a piece of paper can provide me (not us) with financial security, why not? I am trying to live below my means and save actively. My ultimate goal is to amass enough of a cushion that would make it possible to live off the interest without touching the principal. I am willing to forego fancy cars, auperexpensive vacations, season tickets, expensive jewelry etc. to reach that goal.


Understood, but since you are both starting out with relatively little - in comparison to what you will amass in 2 to 5 years, I believe the pre-nup saves you, if needed , very little.

The key (focus) is the relationship, not the divorce insurance


I agree, and I was under the same impression that a pre-nup simply will not protect me in my situation.

Skipping 46 Messages...
geo123 said: Screwdriver,

Even in the current very difficult lending environment, physicians continue to enjoy access to certain mortgage programs not available to the general public. As such, there are still a number of portfolio MD loan programs that allow you to put 0% or very close to it down, do not require PMI, have interest rates on par with the most competitive ones out there and very little or no closing costs.

Although it certainly does not sound like a downpayment will be an issue in this case, you may still want to look into these programs to see whether you can benefit from them. In many cases you will find that you will still be better off getting a regular conforming loan with 20% down but not in every case. My wife is a physician (a resident) and when we bought our house about 6 months ago we ended up going with Penfed's 5/5 ARM, which happened to be the most competitive program for us at the time -- at the same time if we wanted to get a 30 year fixed we would have been better off getting an MD loan. Further, given the fact that AMT is going to be an issue and the fact that mortgage interest continues to be one of the few deductions still allowed under the AMT, an MD loan may give you additional financial flexibility if you'd rather divert a portion of your downpayment towards other types of investments with higher yields.


Thanks for your reply. I have not looked into these types of loans, but my gut feel is that I would be better off putting 20% down and paying down the mortgage fairly rapidly (doubling monthly payments, adding 50% of the bonuses, etc) as long as I am also able to max retirement accounts and save 15%-20% of my income.



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014