3 Tabs You Need in Your Budget

Here are 3 tabs you need to have in your budget to help you grasp your financial standing

I have previously published posts regarding how I built our shared budget.  We use Google Sheets for this task.  Google Sheets was chosen for ease of access, ease of sharing, and ease of spousal use.  Others use Microsoft Excel, hand-written budgets, the “envelope” method, or other budgeting tools/apps. 

For individuals who create their budgets using a virtual spreadsheet, many of the concepts that I mention should feel elementary.  I have tabs in my master budget for each calendar year.  As each subsequent year passes, a new tab for that respective year is added.  As the years go by, I am able to return to prior budgets to reflect, review progress, and see how we have allocated our funds overtime. 

I started using a shared budget with my wife (then fiancé) back in 2017.  We are now in 2022 and it has evolved significantly the past few years.  However, that is a topic for another time.  What I wanted to talk about with this post are the 3 tabs every physician should have in their budget!

1. The ‘Student Loans’ tab

First and foremost, I have a tab labeled “Student Loans.”  This may seem self-explanatory but humor me for a moment. 

Following the annual budgeting tabs, you will first come to this particular tab.  In it we incorporated a number of things.  At the top I have a location that differentiates my medical student loans from my wife’s. 

Loan specifics

What I have first is the name the loan is in, followed by the lender.  I have a column that demonstrates the interest rate of the loan.  Next to that I have a column demonstrating the original principle, followed by the remaining principle. 

Finally, at the far right I have a column that demonstrates the total loan amount remaining (interest plus principle).  In the row below this I have the exact same information as it applies to my wife’s loan. 

Loan totals over time

Further on down I have two columns.  The first column is a running list from oldest (top) to most recent (bottom) of each month of each year.  I was able to retroactively review my loan information as well as prior budgets.  This process helped me determine the total amount of our shared loans on the first day of each month.  For us, we have data starting for 2019, and then every month (of every year) after that reveals a snapshot of our shared loan totals. 

This portion of the student loans tab is really useful for a few reasons.  One is it is a visual representation of your progress.  Secondly it shows you how regular, large payments towards your student debt cause an increase in your debt reduction.  This method also demonstrates the rate of acceleration your debt takes with each subsequent payment as more and more bites into principle.  I think having a portion of your master budget dedicated specifically to your student loans, or any debt for that matter, is incredibly important.

2. The ‘Net Worth’ tab

Next on the list is our “Net Worth” tab.  Again, pretty self-explanatory, but essential none the less. 

Having an all-in-one location to review all your assets and liabilities is crucial.  When I was building the budget, this was absolutely the most depressing tab to look at.  This was because my net worth was overwhelmingly negative given our combined medical school debt. 

Bank accounts

To begin, I break down the net worth by bank accounts, both individual and shared.  I have a subsequent section for our retirement accounts.  This is followed by a section for our taxable investment accounts, and lastly our student loan debt. 

To explain in more detail, the first few rows are color coordinated to demarcate each of our checking and savings accounts.  My wife and I each have our own individual banking accounts where our income is deposited.  Each of us has a savings account with our respective banks as well.  All of these are color coordinated (green) with the last row in this section acting as a total for all we have in these checking/savings accounts. 

Retirement accounts

The next rows down represent our retirement accounts.  Each of us have both current and prior retirement accounts from our current and prior employers.  We place our backdoor Roth IRAs in this section as well.  Here these rows are color coordinated too (blue).  Again, there is a final row that totals all we have across these retirement accounts.  Any FSA or HSA I would likely place in this section as well. 

Investment accounts

Third down are the rows representing our investments.  This is a short section as we only have our Vanguard investments and our (very small) Robinhood investments.  Our Vanguard account represents all of our passive income investments.  As it stands currently, I do not break this down by how much is invested in stocks, bonds, international, etc. as this is provided on the Vanguard site itself.  All I have is the combined total of taxable investments.

Student loan accounts

Last but not least we have our medical student loan debt.  This represents all of our liabilities.  Here I only have a row for the sum total of my student debt (principle plus interest), and a similar row below for my wife’s student debt.  These are obviously all subtracted from the assets mentioned above.  At the time this was written we did not own a home.  We also paid for both of our vehicles in cash therefore avoiding any car payments that would thus go into the liabilities section. 

Net worth total

The last row in this section acts a final sum total of all of our combined assets and liabilities.  All checking and savings accounts, as well as all retirement accounts and investments are added together.  Our liabilities are then subtracted from this final sum of assets thus giving us our total net worth as a family. 

All of that aside, the net worth tab is essential for developing a ‘forest from the trees’ view of your overall financial standing.  I think this is the best visual motivation for why you should live below your means following completion of training.  It takes no time at all to realize how poor the average physician is if they accumulated student debt.  Use this tab as motivation to do any-and-all things necessary to improve your net worth and eliminate your debt!  

3. The ‘Financial Goals’ tab

The last tab on my list is personal for me. 

My wife and I share annual financial goals.  We use the last tab in our shared budget to formulate significant but achievable financial goals for the year.  Examples include:

• How much we plan to put toward our debt for that calendar year
• Paying for a vacation in cash
• Making a large expected purchase
• Contributing a certain amount to our emergency fund
• Performing our Backdoor Roth IRAs for each

These are big picture goals for the year.  These can act as a great reminder when we need some extra motivation.  It is nice to return and review what our goals were previously, and celebrate in all our accomplishments.

Take home points

The purpose of these 3 tabs is to act as a visual representation for your current financial standing, your real net worth, and your financial goals. 

I think these measures have allowed me to better understand where I stand financially.  This process has provided motivation when the “Groundhog Day” sensation of debt repayment and frugal living can become monotonous.  I encourage you to consider implementing these tabs into your budget in some form or fashion.   I hope they provide the same benefits for you as they did for my financial life!  As always…

Stay motivated!

The Motivated M.D.

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