A penny saved is a penny, a penny earned is not…

If you really want to get rich you need to get your spending under control instead of working hard for the money. Why? Because a penny saved is a much less.

th-1When transitioning from residency to independent practice you will be struck by how much free time you have. You may be tempted to pick up extra shifts to make some fast cash, and there will definitely be plenty of locums headhunters trying to convince you to do so.

So why should you elect to save money over just picking up a shift:

The real value of picking up that extra shift:

Picking up that extra shift for additional money can be a good, thing, but it does not compare to the benefit of money saved by cutting expenses. Why, because you will pay a greater proportion of your earned income to taxes.

For instance, if you are making single filer making 190K base each additional moonlighting shift you pick up is going to be taxed at a federal income rate of 33%. That mean’s 1/3 of your work is going to uncle sam, this is not including any local taxes you may have to pay. In addition, upping your income may also push you into the AMT range and exclude you from various tax deductions, which means you’ll end up paying even more in taxes.

The value of reigning in your “expenses”

In contrast, cutting cost such as not buying Starbucks every day or not eating out every day can save you a couple hundred to thousand dollars, and also save you the empty calories.

Break free of those golden handcuffs

thThe other costs of picking up that shift is that those Golden Handcuffs can get tighter. Many locum tenems companies really push you to just pick upthat extra shift when you want to by a new fancy toy. It seems like an easy enough answer to your money problems, but lifestyle inflation starts to trickle in when you do that and the next thing you know you are picking up shifts instead of spending time with friends and family. Why not practice a little delayed gratification and save money from your next couple paychecks to pay for your new toy, you may decide that you don’t really need/want it.

Focus on experience over material goods

Since I have stopped moonlighting to make extra cash, I have found my self buying less material goods and spending more time on the things I enjoy (spending time with family and friends, teaching, reading, and spending time outside). Then when I do want to splurge on an experience I have plenty of money and time to go on long family vacations.

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