Preparing a personal budget (and sticking to it)

By Jean Murray, PhD

Having and using a monthly budget is always a good idea, but it is particularly important as you graduate from chiropractic school and begin your new career.

Budgets are like exercise machines: they are often put in place but seldom used. Setting up and maintaining a monthly budget is mandatory while you are in school and getting ready to start your practice. Here are some thoughts on how to make it easier.

The importance of starting now

As a student, you should keep your monthly expenses at the lowest comfortable level so you can minimize student loan requirements and save some earned income for startup. As you start your practice, you’ll need to stay within a budget so you can keep your withdrawals from the practice at a minimum, particularly in the beginning, when you will probably be operating with cash-flow deficit.

When you prepare your business plan, you’ll need to include the amount of cash you plan to take out of your practice to live on each month (your “draw”), if you are a sole proprietor, or the amount you’ll need as a salary if you are incorporating.

When you go to a bank looking for a startup loan, the bank may ask you for your monthly budget information. If you are working as an associate or independent contractor, you must know the minimum you will need to live on, so you can negotiate your base salary.

Tips for keeping on track

Your budget should be easy to use. There are online tools and Excel spreadsheets that can help you set up budget amounts and input expenses and income. Here are some suggestions for keeping things simple:

  • Have as few categories for expenses as possible. The fewer the categories, the easier the decisions are. For example: You can lump a lot of stuff into “miscellaneous” expenses.
  • Include a category for “unexpected” expenses (like repairs), and keep a little money in your checking or savings account for these things.
  • Don’t underestimate expenses. The reason most people don’t stay with budgets is that they forget two major categories: “miscellaneous” and “fun.” If your budget doesn’t include some money for entertainment (eating out, small indulgences, or movies) you won’t stick to it.

Similarly, not setting aside enough for miscellaneous expenses means you won’t have enough to pay for the small unexpected purchases that come up.

  • Get into the habit of budgeting.

Additional suggestions

  • Use duplicate checks. They cost a little more but they save the time and frustration of trying to figure out what a check was written for.
  • Set a jar or container in the kitchen or on your bedroom dresser. Put your receipts in it and enter them in your worksheet at the end of the week.
  • Pay your bills online. Use bill-paying software or your bank’s free bill paying service to schedule and pay bills. Not only do you get the benefit of saving on mailing, but you also get a record of bills paid.
  • Set aside a time each week to catch up on your weekly expenses and enter them into your worksheet.

Finally, a word of advice from a very wise chiropractor: Don’t spend all the money (DSATM)!

Jean Murray, PhD, has been counseling small business owners since 1974 and is currently helping chiropractic students and graduates who want to start their own practices.


Resources for budgeting

Here is a useful household budgeting work sheet for Microsoft Excel:

Commerce Clearinghouse has several tools that can help you with setting up and maintaining your monthly budget:

When you use this calculator, remember to include:

  • monthly payments on your student loans
  • malpractice insurance, if you are an employee and expected to pay for your own (If you’re in your own practice, this cost is a business expense)
  • health insurance for you and your family (even if your practice has a healthcare plan, this cost will probably not be covered completely by the business)
  • other sources of income (e.g., your spouse’s income, any salary you will be taking from your practice, income from investments, or from alimony/child support)