The time filled with the most financial mistakes for many medical professionals is just after training has finished. The light at the end of the tunnel has arrived. Your monthly paycheck has now doubled, tripled, or maybe more (my take-home residency paycheck was one-fifth of my attending take-home paycheck).

This all sounds like good news, right? Trust me, it won’t be if you don’t apply the 10% Rule.

The problem is that the light we see at the end of training is often blinding. “I’ve put my life on hold for the past ten years. I deserve this!” Or maybe it sounds more like “All of the other people I work with have nice homes and nice cars, don’t I deserve the same?”

It’s a complicated problem. Is living like a resident after training worth it?

Our heads might tell us what impressively frugal people would do: use the increased pay-check directly towards destroying debt and aggressively investing. But our heart’s desire to reap rewards we feel are overdue often pulls us in the opposite direction.

The 10% Rule allowed my family to increase our net worth $254,000 in just one year after training — while paying off $128,000 of student loans in 12 months.

The 10% Rule Explained

There are (hopefully) many times in life where you receive a bump in pay. This may be due to a promotion or a quarterly or annual bonus. It may be because you achieved an incentive milestone such as publications, education, or clinically-related incentives often given out in academic medicine.

Apply the 10% Rule is applied in these situations whenever you receive an increase in your amount of take-home pay.

The 10% Rule is as follows: For every bump in pay, bonus, or unexpected money that you receive, 10% of the money goes towards lifestyle creep, and the other 90% goes towards building wealth.

For example, when my family went from making $6,000 per month in my (non-accredited) fellowship in regional anesthesia to making $17,000 as an attending physician, I took (less than) 10% of this raise (about $900) and I applied this money towards moderately frugal lifestyle creep.

Lifestyle creep on most financially minded websites is considered worse than one of the seven deadly sins. They’ll tell you, “nothing is worse than lifestyle creep!” It usually sounds something like this, “Never ever let your lifestyle creep after training! Otherwise, it’ll start to crawl, and then run, and then sprint away with all of your earnings! It’s a monster that, once fed, becomes uncontrollable!”

Honestly, I find this line of reasoning is ridiculous. I don’t disagree that physicians (and other health care workers) are notoriously bad at spending too much money, but with a little training ,even the financial beast of lifestyle creep can be tamed.

The 10% Rule allows us to given 10% to the heart while we apply the other 90% towards wise financial decisions (destroying debt, investing in low-cost index funds, starting a backdoor Roth, saving for your kids 529, etc.).

The Purpose of the 10% Rule

Wealth without wellness is not good. If we ignore the desires of our heart and simply deny our ability to enjoy anything, this places us in an uncomfortable disposition towards discontent.

Likewise, if we ignore the head (and the financial riches that await us if we make simple, automatic, and disciplined financial decisions) we are destined for a long career and a terrible retirement. This also isn’t any good.

The purpose of the 10% rule is to allow our hearts to remain healthy while we build the financial muscle that is moderate frugality. The more you allow yourself an occasional break while remaining financially disciplined, the more wealth and wellness you’ll obtain. Simultaneously.

This is the purpose of The 10% Rule.

Truth In Advertising

I think that one of the most helpful aspects of any advice is transparency. How exactly I decided to apply The 10% Rule after I finished training?

Well, let the truth be told, I purchased one of the most financially unintelligent things that one can buy. I financed a car (not just any car, a Chevy SS) and bought a country club membership for golf. My take-home pay increased by $11,000 and I let my lifestyle creep less than 10% ($900 per month in changes).

I am a year out from training and nothing else has changed. We still live in the $650-a-month 1100 square-foot starter home that we’ve lived in since medical school (and will continue to live in until loans are paid off).

The car and golf are the only two things I’ve added.

So, where does the other $11,000 per month go? Well, $5,500 goes straight towards medical school debt. $3600 goes towards investments. $1900 goes towards charitable giving.

Honestly, I anticipate a bunch of people calling for my head for spending my money on a car and golf membership. However, many of those same people love to travel and to spend money on expensive experiences that simply don’t bring me a lot of joy. That is what brings them joy.

What brings me joy is putting my kids in the back of my car (it fits three car seats) and taking them to play golf with me. I don’t regret my financial decisions. No buyer’s remorse will be found here. Seriously. None.

By the numbers, I am aggressively investing in my family’s future or destroying debt with over 50% of my gross income. We will pay off $200,000 in 20 months by applying the 10% Rule.

The 10% Rule has made both my heart and my head happy. I am on track to be able to retire in my mid 40s, can enjoy the lifestyle I currently live on, and haven’t regretted a second of it.

A version of this post originally appeared on The Physician Philosopher.

The Physician Philosopher is a husband, father, author, inventor, and craft beer lover. He spends his time writing on his eponymous website to help other physicians achieve wealth and wellness. He also spends 50–60 hours each week as an attending physician anesthesiologist in academia.