Financial Freedom for First Responders

Disclaimer: I am not a financial advisor, nor have I received any formal education on personal finances. My learnings have come from my parents, personal experience, and the reading of books and trade journals that help me better understand personal finances. I wrote this piece with the desire to help other mobile medical professionals better manage their finances – or at least change their mindset - so that they can remain an active part of our industry. All content is strictly my opinion and should not replace the advice of a licensed financial advisor. One last thing – I have not included any advice that I have not, or would not, take myself. You have been warned.

The path to a brighter financial future rests in?your?desire to improve it.

This is a topic I continue to see across our industry, and not synonymous with age or experience in our field. As I drive past ambulance services or walk through the parking lots of my own organization, I’m often blown away by the high dollar cars that fill them. Our industry is full of bad decisions when it comes to financial health and wellness. Our inability to properly manage our personal finances is having a multi-tiered effect. Anxiety, depression, and more are exacerbated by our lack of financial intelligence and freedom.

In sharing a piece of my story, it is my hope that you will take a new approach to managing your personal finances.

Personal Financial Management:

I purchased a brand-new truck when I was 19 years old and paid it off within the first year of owning it. How? In 2007, a new Ford F-150 (depending on the model) could cost as much as $40,000. I paid $15,000 for mine – representing a 62.5% decrease in cost over Ford’s top model. The truck had four miles on the odometer when I completed the paperwork, and two of those miles were from a test drive that I had completed before drawing up the documents. On the exterior, my truck looked every bit as appealing as the higher-end models, and I had a full eight-foot bed. On the inside, there were fewer electronics, hand-cranked windows, manual door locks, and the most basic AM/FM radio available at the time. Even without all the “extras”, my truck accomplished everything that I needed. It was brand new, and it was mine.

When I was twenty years old, I bought my first house on an EMT wage of $11/hour. My house payment was nearly $300 less per month than what I was paying for my one-bedroom apartment, and my house was in a good neighborhood – an added bonus.

I didn’t go out to eat every night, I didn’t have the nicest watch, newest phone, or any of the sort. What I did have was a steadfast focus on my financial well-being. I didn’t seek to create debt, I sought to eliminate it. And despite my low wage generation, I found that I was able to live a comfortable life without the burden of mountainous debt.?

If I know our industry well enough, I would venture to guess that many of you are scratching your heads in disbelief – refusing to believe that this is true, or more so, a disbelief that this very scenario could work for you.

Living within your means does not equate to short-changing yourself or enjoying life less than you should. It simply means that you may need to live life?differently. While it may be your desire to have your own house or apartment, you may need to get a roommate to assist in covering the costs. The inconvenience of having a roommate may be the difference between you living paycheck to paycheck and living comfortably. Strategy: The real “winner” in this scenario is the one that purchases a home and then rents space to a roommate – allowing your roommate to help build equity in?your?home.

“I can’t afford to save for a down payment on a house” you may say, as you look down at your brand-new iPhone while sipping your six-dollar specialty coffee. Whenever I hear this statement, I regularly ask, “are you on a budget?” The resounding response is often, “no”. While I first thought it may be due to a lack of knowledge, I have come to realize that financial planning is a very uncomfortable topic for most within our industry.?

There are several FREE resources online that will help you craft your personal budget. One of the first that I came across is:

Personal Budget Tool:?https://www.youcandealwithit.com/borrowers/calculators-and-resources/calculators/budget-calculator.shtml

Try it out and see what numbers you come up with. If you find that your overall budget lands you in a zero or negative value, keep playing with the numbers until you find the appropriate balance. In some cases, where expenses can’t be reduced any further, you may have to increase your income (don’t lift that middle finger just yet – hear me out). If this is the case for you, it may be time to consider picking up a few extra shifts to make up the difference.?

And there’s a strategy there too…

If you work for a mobile medical organization that offers a shift differential to work the less desirable shifts (e.g.: nights), jump on it. We all have the same amount of time in a month, so why not maximize your hourly value? As an example, my company pays an additional $0.50/hour to work night shift. That may not seem like a lot, but over the course of one year, you will make $1,000, or more, than you would working the?same number of hours?during the day.?

My company also offers double-time pay for all recognized holidays. Another no-brainer. If you are saving for a house, retirement, or simply looking to improve your quality of life, volunteer to pick up these shifts. Using the same methodology as the shift differential, earning double the compensation to work the same shift on a holiday makes total sense. And as a paramedic, I’ve had Thanksgiving on plenty of weekends over the course of my career to take advantage of working on the actual holiday. Small sacrifices can equate to big financial gains.

Outside of selecting the right shifts, do not be afraid to work extra shifts. I’m not suggesting that you burn yourself out or work so many hours that you lose your desire to work at all. What I am suggesting is that you pick up just enough to improve your financial position without sacrificing all your free time.?

Let’s use another example to illustrate the point.

If a brand-new EMT within our company (making $17/hour) is assigned to a 12-hour rotation, their base annual salary is $38,896. This assumes no holidays or shift differentials. If that same EMT picks up ONE eight-hour shift every short week (36-hour) of their rotation, their updated annual pay is: $45,968.00, representing an increase of more than $7,000 annually. This methodology would require that you work 208 days (56.9%) per year. That’s 157 days OFF from work. Turn that into a night shift opportunity, and you’re making more than $8,000 in additional income.?

Planning on mobile medicine as a career? Do not stop at the EMT level. This isn’t a knock on EMTs, but a reality check. If you are truly passionate about this field, and desire to promote within it, you need to take the appropriate steps to achieve higher certification levels. In doing so, you will not only find greater fulfillment in your work, but you will also achieve your financials goals quicker and more efficiently. And in today’s struggling mobile medical environment, most (good) employers are going to cover the cost of your paramedic program. Free education, with personal financial incentives, while improving upon your craft, is about as good as it’s going to get. If you have the opportunity, take advantage of it. If you work for a provider that is not supporting your on-going pursuit of financial and professional growth, find a new employer.

If you’re still unsure, or confused by all of this, I highly recommend that you visit with a licensed advisor to build out your personalized game plan for financial success.

Retirement:

Let’s talk about retirement. What if I told you that a career EMT can accumulate nearly $1.5 million in wealth over the course of their career? According to Bankrate.com, a twenty-one-year-old EMT, making $40,000 per year, can achieve this with the proper planning and discipline.

Retirement Calculator:?https://www.bankrate.com/retirement/calculators/retirement-plan-calculator/

Earning a million dollars takes just 10% of your gross earnings, placed into your company’s 401k plan, to achieve. Ten percent sounds like a lot, right? On a bi-weekly pay structure, that equates to approximately $154 per pay period. If that doesn’t sound realistic, spend a minute to think through your monthly expenses. Now, $154 per paycheck doesn’t sound so bad, nor does it sound unrealistic.?

If you’re a smoker, you’re likely spending half of that on cigarettes each month. Coffee drinker too? That can represent another $120 per month. I’m not suggesting that you stop drinking coffee, I’m recommending that you drink it?differently. (And yes, you need to stop smoking so that you can actually enjoy your retirement funds one day!)

I love Dunkin’ coffee. I’m from New England, so it is part of my DNA – there’s no way around it. Instead of buying coffee every morning on my way into work, I brew Dunkin’ coffee at home. I do this because of the compounding savings that I achieve by doing so. I still get to enjoy the quality taste of a Dunkin’ product, but I enjoy it at a much lower cost by brewing it at home. Too often, I feel that financial advice means a total forfeiture of something you love, and that’s not necessarily the case. You just have to be smarter in how you enjoy the finer things in life.

If the brand of your coffee doesn’t matter, then you can save even more without sacrificing your desperately needed (and earned) caffeinated beverage(s). As an example, our organization supplies a myriad of coffees to our team members at no cost – and it’s not the cheap stuff. Yes, you can enjoy a delicious coffee at a Thorne Ambulance Service location at zero cost. A small savings, compounded over time, to achieve your financial goals.

Retirement: Private vs. Government

I have heard the argument on private vs. government ambulance services. Some providers prefer to work for a governmental entity because of the allure of the illustrious state retirement. However, I must caution you – if it sounds too good to be true, it often is, which is especially the case with government. Keep in mind that many government-based providers take more than 10% out of your paycheck for state retirement, and it places a great deal of trust in the government to appropriately manage your finances. And, if you have seen what the government pays out for ambulance services, you may think twice about entrusting your hard-earned dollars to them.?

What do you know about your government-based retirement structure? If all you know is that twenty-five years of service equates to retirement, then I highly suggest you do a deeper dive. You need to understand the administrative costs of the plan, the length of time until you are vested, average annual returns, etc. Ultimately, I’ll need to do a separate article on this topic. There are far too many intricacies in government vs. private retirement types. All I’m trying to say is that you have an equal or greater chance of achieving your financial goals with a private employer – debunking a lot of the inaccurate or misleading arguments I often see on social media – as you do with a government provider.

What about Social Security? While I would not suggest placing a great deal of faith in this benefit, especially if you are many years away from retirement, it is still worth noting the benefits that you?should?be entitled to. Interested in learning what your monthly Social Security benefits could equate to??

Check out the calculator:?https://www.ssa.gov/cgi-bin/benefit6.cgi

A bright financial future is possible regardless of your hourly or annual income. There are steps that you must take, along with a few sacrifices, to gain the financial freedom you seek. Begin with small steps, make a conscious effort to budget, and don’t forget to save for that rainy day. Working in mobile medicine and financial well-being should be synonymous with one another and is achievable if you’re willing to step outside of your comfort zone and take the leap to financial freedom. While there is far greater depth that we can and should explore on the topic, it is my hope that these initial thoughts and recommendations help to shape your financial future.