Tim Church is a 34-year-old pharmacist for the U.S. government. He lives with his wife in Florida. He also co-owns Your Financial Pharmacist, a blog, podcast and fee-only financial firm. We asked him how he budgets.
What makes budgeting as a pharmacist different?
"The biggest thing is that we typically start out with a six-figure income right from the get-go," Church said.
As a result, many pharmacists become susceptible to lifestyle creep, a term for when your spending rises to meet your income.
"If you start out with that big income and you don't already have a plan in place, it's very easy to try to spend up to what you're making and even going beyond that," Church said.
Pharmacist salaries also tend to stay stable, with occasional raises for experience or cost of living. Church decided to pursue additional income streams to reach his financial goals faster.
"The first thing I did fairly early on in my career is I worked at another hospital," Church said. "I was doing some moonlighting on evenings and then on weekends. That got to be a little too much after about two years."
Church developed an interest in personal finance. He co-authored a book on the subject with Tim Ulbrich, co-founder and CEO of Your Financial Pharmacist. The book was called "Seven-Figure Pharmacist."
"That started a partnership with him," Church said. "And then eventually I became a co-owner of Your Financial Pharmacist."
What does it cost to become a pharmacist?
The average student who graduates with a doctorate in pharmacy owes about $170,000 in student debt, according to a July survey from the American Association of Colleges of Pharmacy. When Church graduated, he owed about $200,000 in student debt.
At first, Church wasn't serious about paying off the debt.
"After I realized all the interest that was accumulating, I started to become more intentional," Church said. "And when I got married in 2015, my wife had over $200,000 in student loans. So we started off our marriage with $400,000 in student loan debt. We knew that was going to be a huge burden to deal with."
The couple committed to shifting their disposable income to make higher-than-minimum payments every month. Church's additional income helped as well. They've also refinanced the loans multiple times.
"Each time we've been able to get a lower interest rate," Church said.
As a result, more of their payments go toward the principal of the loan rather than the interest.
What tools do you use for budgeting?
"Generally what we do is write out our budget on paper," Church said. "Then my wife and I review it. Once we agree on what our expenses are going to be for the month, then I import that information into Mint."
The use of a paper budget was inspired by Dave Ramsey. But after a few months, Church noticed he was having trouble sticking with it and started using Mint to allow him to see how much he had spent in different categories.
"Besides this, it has helped me be successful by sending me alerts if I am getting close to reaching a particular budget goal," Church said.
What kind of insurance do you have?
Church bought life insurance privately.
"What was offered through my employer was not portable," Church said. "So I just decided to opt out of that and have my own term life insurance policy."
Church's job offers a disability retirement benefit. He also purchased a long-term disability insurance policy.
Here are the best disability insurance companies for pharmacists.
"I also have health insurance," Church said. "I have a high-deductible health plan so that I'm able to contribute to a health savings account. I knew that was going to be a great option to use as a retirement vehicle."
In addition, contributions to the HSA are tax-deductible, and distributions for medical uses, as well as earnings, are tax-free.
"With a triple tax benefit, it's a great option," Church said.
What influenced the way you think about money?
"Following Dave Ramsey's plan really got me interested in this topic of really being intentional about budgeting," Church said.
Church also cited as influences Robert Kiyosaki, author of "Rich Dad Poor Dad" and Thomas Stanley, author of "The Millionaire Next Door."
How has your approach to budgeting changed since you started?
"I shifted my mindset to have more of what I call a net worth mindset," Church said.
That means maximizing the money that goes toward the family's net worth, whether by paying off debt or growing their retirement accounts. Church's goal is to be able to retire before he turns 50.
"Typically, you have to save a pretty substantial portion of your income to be invested to reach early retirement," Church said.
At the same time, Church makes sure to set aside money for fun.
"You can't just be a miser and accumulate money your whole life and never enjoy any of it," Church said.
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