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A Budget for Doctors

A Budget for Doctors

August 03, 2022

Everyone needs to know their budget numbers.  It gives you control and even freedom to know when you can splurge.  I firmly believe budgeting apps have made it much more complicated than it needs to be.  In fact, you only need 4 numbers.  They are fixed, future, “f”ilanthropy, and fun.  Know how much of your income should be going toward those 4 F’s and you’ll have a solid budget.

 50% Fixed.  These are your survival expenses and should be 50% or less of your income.

  • 20-25% housing. If you own a home, stick with a fixed rate mortgage while low rates are still available.  A 15-year fixed rate mortgage is preferred because the home will be paid off before the start of kids’ college expenses and retirement.
  • Utilities like natural gas, electric, water, and internet are approximately $300 for the average household.[1]
  • Cell phone $104 per person (while this is the national average, much less expensive plans are available)
  • Transportation $130
  • Food $247-437 per person[2]
  • Childcare $868 to $2,000+ monthly[3]
  • Insurance $varies
  • Minimum debt payments $varies

 15-25% Future.  This percentage is only for your retirement.  Money you save to replace a car or for kids’ college is in addition to this.

  • $1,708 for 401(k) or 403(b) ($20,500 per year max / 12 months)
  • $1,000 for backdoor Roth IRA ($6,000 per spouse per year max / 12 months)
  • $7,300 health savings account (7,300 family max / 12 months)
  • Non-retirement investments $varies

 10% “F”ilanthropy.  Pretty self-explanatory.  However, bunching charitable gifts using a donor advised fund if you are under age 70 ½ or utilizing a qualified charitable distribution over age 70 ½ can increase the tax deductibility of your gifts.

 15-25% Fun.

  • Vacations, monthly entertainment, etc.
  • Recurring lifestyle expenses such as a TV package or streaming services go here, not in the fixed category.
  • Debt snowball is a strategy to pay off consumer debts like credit cards and auto loans by paying extra on one debt at a time to eliminate them all.  It’s in the fun category because excess debt inhibits your ability to spend on other items.  Paying off those debts gives you the freedom to spend more on actual fun.

 Note –Students and retirees can omit the Future category from their budget.  Rather than saving for the future, it’s usually best for students to pay bills and avoid accumulating more debt.

[1] Federal Reserve Bank of St. Louis. (n.d.). All consumer units:expenditures. FRED. Retrieved August 3, 2022, from

[2]USDA food plans: Cost of food reports (monthly reports). Food and Nutrition Service U.S. Department of Agriculture. (2022, April 20). Retrieved August 3, 2022, from

[3] Center for American Progress. (n.d.). Where does your child care dollar go? Retrieved August 3, 2022, from