2 out of every 3 Americans can’t cover an unexpected $400 expense. Terrifying. Absolutely terrifying that society lives on razor thin margins. No room for surprises. It must be better for CRNAs as we make more money.

1 in 3 households earning $250,000+ lives paycheck to paycheck – unable to cover a $1,000 expense. So how do high earners end up here? Basic math really. Make $250,000 – Spend $250,000. Make $2.5M – Spend $2.5M.

Let’s be real, it’s not that difficult to spend that kind of money when the average house price is north of $425,000. $1M+ in high cost of living areas. CRNAs make above average money, so many feel they deserve an above average house. A sense of entitlement among many high-income earners.

Mrs. TFC and I, by showing only our W2 contracts, qualified for a $1.8M mortgage. There aren’t even any $1.8M houses in this small town. I’m not hating on the $1.8M house, but we don’t need one. The $250,000 one  we settled on worked just fine.

There are some arguments to be made for an expensive house. The right move at the wrong time is the wrong move. And when you are broke, it’s the wrong time to buy a house, car, or anything else. This blog entry is about the CRNAs cutting it a bit close to the wire.

I see the same sales pitch for all major purchases. Some “expert” mortgage broker or car salesman tells you what dollar amount you qualify for. But that doesn’t mean it’s a wise financial decision. One of the many ways financial literacy saves millions over a lifetime.

TL;DR

• The average couple spends $6,000 per month, far less than what the average CRNA earns.

• Live to your net worth, not your income.

• Financial firepower first, lifestyle inflation second. 

Reality Check

I wrote a post about how an average earning CRNA could pay off their loans and retire in 10 years. Yes, I made some assumptions, but the numbers work. Much of the disagreement came from those who prioritize much differently and are out of touch with reality. I received messages claiming a family can’t live on less than $15,000 per month.

Unfortunately, the follow-up post didn’t receive nearly the same attention. Many greatly appreciated it. Hopefully inspired a few new to the financial literacy game.

The Bureau of Labor Statistics releases cost of living data annually. This is based on a massive survey. It provides the data used to calculate the inflation numbers. One of a few ways. Also, not the blog entry to discuss the accuracy of inflation numbers and the consumer price index.

Numbers account for changes from the 2021 to 2022 data set. A 9% inflation rate was noted. Average household gross income was $94,003, up from $87,432. Average annual expenditures were $72,967, up from $66,928.

Feast your eyes on this beauty:

What does it mean? The average family of 2 spends $6,000 per month with $2,000 going towards housing related costs and $1,000 going towards transportation related costs.

Housing includes all costs. Some rent. Others buy. The average mortgage payment is just over $2,000, so this number arrives as expected. The average vehicle payment is over $700, so this number is a bit lower than expected considering 2 vehicles in many households. Many urbanites use public transportation which likely lowers costs.

And as expected, larger families spend more. Not much more, but a bit. That data can be found at bls.gov.

BLS also has data on the percentage of expenditures based on income. And guess what? It didn’t change significantly from those in the lowest quartile making less than $25,000 annually to those in the highest making over $143,000 annually.

That means as income grows, expenses grow proportionally. The average savings rate is 4.7%. That rate is the same for those making $30,000, $300K, and $3M. If you want to break the cycle of going to school, getting a job, and working until age 65, don’t follow the heard.

Applied to CRNAs

The average earning W2 CRNA grosses $203,000. For simplicity’s sake, netting around $144,000, which comes out to a cool $12,000 per month. Assuming an average cost of living, there is $6,000 left over. When personal debt exists, try living like the 200 million middle class Americans in this country. Don’t allow expenses to balloon alongside your income (just yet).

Remember, this figure accounts for a household, so there may be another income adding to the equation, but let’s take worst case scenario of a single CRNA income for two people.

Through speaking with colleagues and working with financial coaching clients, I’m seeing new CRNAs emerge with $150,000-$200,000 in debt. This may or may not be all student debt. Some graduate with less debt.

Using simple math and living like the average American, this household could throw $6,000 at $150,000 and have it gone in 2 years. Expensive school or bad job, a 3-year horizon is all it takes. Throw in some overtime or a high paying job and the debt vanishes in 18 months.

Deviations from the Timeline

CRNAs are not 18 years of age. Entry to the profession requires a terminal degree. That means new CRNAs are +/- age 30-35. This is the point where many start a family, if not already.

Mrs. TFC and I are at this stage of life. No personal debt. Emergency fund in place. Solid W2 jobs. We have appropriate health insurance to minimize damage from any maternity visits and delivery costs.

With 2-day delivery services readily available, we didn’t overdo the baby stuff up front. We purchased the necessities and accumulated the luxuries along the way.

Mrs. TFC was telling me the social media circles were promoting all kinds of unnecessary shiny toys. We put together a respectable newborn setup for $2,500. And even that included a high-end car seat and stroller. We prepared for Mrs. TFC’s income to decrease during maternity leave. Short term disability in place. This becomes difficult when it’s the CRNA income that decreases instead of the Nurse Practitioner income.

Family building is an amazing blessing that warrants a deviation from the timeline. Note, I said deviation, not 180-degree turn. If the financial blocks are in place, you can enjoy the time and not be distracted by financial strain.

Social Pressure

This is the point in which the social pressure is thick. Feeling behind if you don’t already have a spouse, 2 kids, and a house with a white picket fence. Feeling behind at 35 because your friend from nursing school has a family and they have lived in a nice house for 5 years by this point.

And you make too much to drive a beater car. Any respectable professional needs to look the part by driving a new ride. You aren’t impressing anyone with that new ride. The admirer at the stoplight only sees himself in your car. No respect gained.

The social pressures are endless. Vacations, toys, activities, affiliations, etc. Stand by your budget to keep the ship on course.

Unwarranted Deviations

Everyone has unique priorities, so this one is really in the eye of the beholder.

It doesn’t bother me when CRNAs deviate from the short path. Who I am to say what is best? One must make their bed and have their room in order before they tell others how to manage. I’m not saying my room is impeccable, so do as you will.

I will say this blog is not written by a 60-year-old who has already made their millions. It’s written by someone grinding it out day by day to reach financial independence early. Fighting to get out of the “trading time for money” game.

Case Studies

Take care intentionally halting your timeline too frequently as the unexpected will surely arise.

I know a family paying $16,000 for each of 4 kids to attend a private middle/high school. That’s $64,000 annually. That’s a dollar amount. Likely/hopefully a great opportunity for the kiddos. A terrible decision if they have not yet reached financial independence. Plenty of kids have survived public school.

A physician I know continues to work simply because he promised to pay for each of his 4 kids’ college. And guess what? They are going to private colleges. Not a problem in itself. But they are attending expensive universities for degrees that pay average at best.

This physician is delaying his retirement to fund his adult children’s education. He doesn’t enjoy work. He doesn’t want to continue working full time but remains indentured based on his decisions. His children are grown, and his efforts would have be better used starting their financial literacy journey 15 years prior.

Reality Slaps Back

When a group of high school students were interviewed, they stated 6 years down the road, they would be making an average of $145,000 annually with their college degree. The average baccalaureate educated earner earns $54,000 annually.

There is nothing wrong with $54,000 annually. But when you expect to be making the coveted “six-figures” and fall significantly short, problems manifest. These kids are likely planning their future based on $145,000. The house and car such an income affords.

CRNAs don’t need to be broke.

The data is out. The math is clear. The priorities are NOT typically financially focused. In a way, I’m appreciative because I have an audience. Unfortunately, I don’t have as large of an audience as I could based on who could use a bit of financial education.

Jokes aside, I’m seeking answers as to why CRNAs aren’t flourishing financially. Is it prioritization? Entitlement? Lack of financial education? Self-conscious?

Whatever it is, I wish the CRNA community well. And that all of their problems become known and solved in the coming year. Merry Christmas and thanks for reading.