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Saving, Tithing, and Paying Off Debt: A Case Study

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I’ll ruin the surprise and tell you that this case study will be on myself. You may have read that I’m a pharmacist, but there is a period in some of our lives where we aren’t making that “pharmacist money” and are struggling as a resident. For me, that period was 2015-2016 and was part of the catalyst for me trying to figure out my financial life.

Let’s Start With Some Numbers…

My residency salary was $41,000 per year which averages to $3583 per month. After getting slashed by federal and Arkansas state taxes, the take home was $2669 and they paid me once a month on the last day of the month. Occasionally, I moon lighted outside of residency for extra money, but if I were to average that out over 12 months I don’t think that it would be over $100 extra. During that time period, I was an E-4 in the Reserves which added an average of about $240 after taxes.

Total Net/Month = ~$3009

For Perspective

  • National Average Wage Index: $48,642.15
  • AR Pharmacy Technician Mean Salary ( $30210
  • AR Elementary Teachers Mean Salary ( $48110

Now I know what you’re thinking, “it was only one year, stop complaining.” Well that’s not the point of this post. Really, what I want to show is that you don’t have to have an influx of cash from your parents, retire from investment banking, or start life with a small loan of $1 million in order for you to live, pay off debt, and save.

Now For the “Fixed” Costs…

I’m looking back at bank account statements to get this data, so some of it will be estimates as some figures varied

  • Tithing: $356.19 (I committed to donating 10% of my gross income monthly to my local church. I know I did something with the 10% from the other income sources, but I can’t totally remember)
  • Savings: $266.96 (I transferred 10% of my net pay to my savings account)
  • Student Loan: $400 (This one hurt. A nasty private loan from undergrad that didn’t let me defer it based on being in residency like Federal ones allow for)
  • Car Note: $250 (The result of buying a fancy new car when I was still living off of refund checks. Brilliant)
  • Car Insurance: $120 (This kicked in when my dad gave me the awesome Christmas gift of having to pay my own insurance)
  • Phone: $87 (Tried to save money by hopping on my brother’s family plan, but ended up with a leased phone and paid more that I’d have liked)
  • Rent: ~$740 (This accounts for the variety in utilities based on heating cost fluctuations)
  • Cable/Internet: $80 (I think this was $80. I was paying it with a since-closed credit card so I don’t have the exact amount. However, I do remember feeling like a true goober for not just getting the internet only package when I looked at the final bill)

Total Cost/Month = ~$2300

What’s Left to Live off of?

Just after bills/automatic transfers alone, I was left with about $700 each month to live off of. This is why automating was so important for me. That savings allocation ended up being super clutch when I was transitioning to a new city and job after residency as I didn’t receive a paycheck from mid-July 2016 to mid-August 2016.

There are a few costs missing from the calculation because they varied way too much. I had a fat credit card debt from moving from Maryland to Arkansas to start residency. Then there was an old dental bill that I was paying about $100/month on. Also, there was credit card debt, a gym membership, gas for the car, etc… Sheesh.

So truly, if lucky, there was an average of $500 to live on each month (or $125/week). That’s more than some people, but still not a lot to work with for most millennials. They say that Arkansas has a low cost of living, but I noticed sales tax on items was nearly 10% which was much higher than the 6% that I was used to.

So How Did the Numbers Work for Me?

It didn’t take long before I realized that I had a crisis on my hands. I was using a credit card more and more to account for poor spending habits. Once I got past my Zero Moment, I realized that I had to take advantage of a few things to make the money work:

  1. Monthly Paychecks were a blessing – Getting paid only once a month, made it much easier to see what I had to work with. I worked all of my bills out to be due on the 1st of the month so by the 2nd, I could see the exact amount of cash that I had left to budget with. Usually, if you call whoever you have a bill with, they can finesse some magic to change your due dates. Very clutch.
  2. I was around people who were not flashy with money – How many times have you been invited to a restaurant that you didn’t want to go to, but you decide to be social…then you look at the menu and the prices are steep? Often peer pressure can be the biggest cause of poor spending habits as we don’t want to look like the broke friend in the group. Thankfully, people in Northwest Arkansas were pretty low-key and I wasn’t going home after outings wondering what have I done. If you find that your circle is full of these type of people, then it might be time to mute your groupme threads for a while and be more careful about what you agree to attend.
  3. Learning to grocery shop – Part of my residency had me working in a Wal-Mart Neighborhood Market so I was in the grocery store once a week at the least. There really was no excuse to not put on the big boy pants and adult a bit. When you’re the one stocking the fridge, you don’t live all too close to fast food, and pizza doesn’t deliver it becomes pretty easy to start cooking for yourself.
  4. Taking advantage of perks at work – I find it interesting how many people will still buy coffee in the morning when there is a Keurig or some other machine in their break room. Then again, we had a gym next to my dorm in college and I didn’t go very often. Anyways, if your job has various amenities for employees, take full advantage because the money to sponsor them is coming from somewhere (by somewhere I mean your pay scale). Also, talk to your HR department (if you have one) and find out what various discounts may come to employees. You might have a free language learning program that you could be accessing, yet you’re paying for Rosetta Stone. Sad!
  5. Living a short drive from work – This one has compound effects. Not only does living close to work cut down on gas costs, I think you end up with more time in your day to focus on you before and after work because your commute is shorter. I had the added annoyance benefit of living away from the things that take your money to do in town so once I was in my apartment, I was in.

Now everyone’s situation is different. You may have children or someone else you are taking care of that makes it just seem impossible to save. I know for me though, treating savings as if it were a bill to be auto-drafted from my account just like any other was a large factor in getting things to work. I ended up finishing my residency year with the equivalent of a month’s paycheck left to last me until I started the next job as a result.

Many people don’t budget their income, their income is their budget.

A smarter, thriftier you can be the solution to your money problems, but it will take action and identifying where change can be made. I felt broke at the time, but I managed to make it. Would love to hear any stories that you have about saving and budgeting in the comments below.


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Prince is a full-time pharmacist, part-time blogger that enjoys a lot of the simple things in life. Definitely a natural minimalist and that's that.

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