Ask yourself this question: “If I lost my job today, would I be able to survive for 6 months at my current standard of living?”
If you cannot answer yes to this question, you are very financially INSECURE. This is not a good place to be if you desire freedom in your life.
People in this country tend to live way above their means. This is especially true for those in the medical fields. We can get loans for anything we want at any time. I see doctors, nurses, PA’s, and NP’s who live paycheck to paycheck. This is insanity… Living above your means is a recipe for long term unhappiness and stress. Therefore, another vital principle of the Elite Nurse Practitioner Model is having low personal expenses.
Is the nurse practitioner who makes $120,000 a year yet lives in a $500,000 McMansion truly happy?
Is half of your monthly pay going to pay a mortgage making you happy?
Is that $70,000 truck or SUV bringing you that much joy compared to a $30,000 one?
Is your inability to not miss work in fear that you will not be able to pay your bills helping you sleep at night?
Absolutely not… If these things bring you happiness, then stop reading.
For those that know what its like to be stressed about money because you have been poor or have lived above your means understand what I am saying. This consumerism mindset does not make one a whole person.
If you are a new NP and finally making $100,000 or more a year, please take my advice right now: DO NOT LIVE ABOVE YOUR MEANS.
It is easy to live above your means. Once you start making real money your ability to borrow money becomes much easier. You can purchase very expensive homes, automobiles, recreational vehicles, etc… Instead of going on simple vacations, you can now start going to expensive resorts. You can start eating out more often. You can begin purchasing designer clothes and shoes.
While all these things are a positive result of your hard work, they tend to only bring short term happiness. Once you have paid 3-4 payments on that $70,000 vehicle, you will begin to realize your inability to get ahead because of your debt obligations. This is when the stress and unhappiness will set in. The dopamine rush is over.
Before you purchase any big-ticket item in your life you need to ask yourself two questions:
“Will this item bring me joy in 3 months?” and “Is this item worth the amount of debt necessary to obtain it?” If the answer is no to these questions, you need to skip the purchase.
Going into debt for a big-ticket item usually just increases your stress levels. Debt makes your net worth NEGATIVE. You are not worth anything from a monetary standpoint! Guess what? The janitor that makes $35,000 a year who owns his house, vehicle, and has no debt is technically richer than you!
Everyone should learn how to live below their means. When you are spending less than what you are bringing in, you will be a much happier and stress-free person. This will increase your savings and investment numbers steadily over time which results in what the Elite Nurse Practitioner Model is all about: personal freedom.
You will be able to work less because you do not need the money.
You will be able to retire earlier.
You will be able to spend your money on experiences such as vacations vs paying off debt.
You will not be panicking if you lose your job.
The benefits are numerous…
The easiest way to lower your personal expenses is by decreasing your biggest expenses first. The three largest expenses in your life are taxes, housing, and automobiles. Add student loan debt to that list if you have some. It is simple:
You can lower your taxes legally by having businesses and utilizing every deduction available.
You can live in more modest housing which results in a cheaper mortgage payment.
You can drive a slightly used vehicle that is just as nice and reliable as a new one.
You can pay your student loans off faster by living more frugally.
This is not difficult to accomplish. All it takes is a mental adjustment. Who cares about keeping up with everyone else? Everyone else is in debt! Live for you. Do what makes you happy that is within your financial means!
If you want to follow the Elite Nurse Practitioner Model and increase your personal freedom, you must learn how to live below your means. It will make implementing the model much easier. It will result in more happiness and financial security in your life. If you have low personal expenses in addition to the other principles of the model, you will be an unstoppable force. I discuss this in more detail in my new upcoming book “The Elite Nurse Practitioner Model.”
Great blog this week! Living within our means is something that we hardly ever discuss but is absolutely essential to reach financial freedom. It’s Time out for “Keeping Up with the Jones… Khardashians…or who ever else..!” Thank you for this important reminder, especially as we go into the new year. I think this is a valuable lesson for us all.
Any suggestions for NPs living in very expensive areas of the country? A modest house where I live is $500k…McMansions are closer to $1 million! I really do love where I live, and the school system is fabulous, but it certainly makes it difficult when housing costs are so high.
I think you need to ask yourself if the area you live in really is worth it? Is being in debt up to your ears and living way above your means worth “fabulous” schools? There are great schools in cheaper areas. You make the same amount as a NP who can have a McMansion for $300,000…. Who will be more ahead in life in 15 years? The NP who makes just as much as you but lives in a cheaper area. There is no debate about that. If you want to live in this high cost of living area, then it is imperative you break away from the employment model and start your own business. When I charge $200 for an initial evaluation at my clinic, you could get away with charging $500. Make up the difference. But if you continue to work for an employer under standard insurance models, remember, medicare reimburses the same amount in your area as podunk Mississippi.
We live in an area similar. We had to buy fixer uppers and my husband focused on that while I worked. We were able to flip up to the more expensive home. We are older are in a different place financially now but it’s an option.