Money Hack for Medical Professionals - You Need to CLAP!

I'm a firm believer of automating most aspects of personal finance, but I also believe that what gets measured gets improved and managed. Over the years, I've developed end-of-month and end-of-financial-quarter routines that have guided me from paying off $161,000 in student loan debt to reaching millionaire status through investing. Today, I'll break down my monthly routine that ensures long-term financial success.

If you have any debt with an interest rate above 10%, you need to snag this free checklist before you implement the CLAP system
 

CLAP: A Simple, Effective System

To remember this routine, I use the acronym CLAP. It's catchy and easy to remember. Here’s what each letter stands for:

C - Categorize

Start by categorizing every single financial transaction into appropriate buckets. Whether it's on your credit card or debit card, each transaction needs a specific category. This helps you track where your money is going and prevents any single category, like "miscellaneous," from becoming a financial black hole. For instance, if you have a miscellaneous category, keep it small—$200 to $300 max.

You can use apps that automate this for you, but I find it frequently is inaccurate and not truly reflective of your spending patterns.

L - Lock in a Plan

Lock in a plan for every single dollar. This involves a detailed breakdown of your take-home pay and assigning every dollar a specific purpose. One useful tool is to track the percentage of your take-home pay allocated to each category. This helps you identify areas where you might need to adjust your spending.

Do this both at the conclusion of any month to ensure nothing slips through the cracks, but also BEFORE the upcoming month begins. Doing everything retrospectively gives away your power to create change.

A - Ask the Critical Question

Ask yourself the most important question: "What percentage of my financial take-home pay is going towards progress?" This question keeps you focused on your financial goals and ensures that you are consistently working towards them.

The answer should ALWAYS be at least 20% of take home pay, with a minimum of $1,000 if you're a medical professional. 

If you haven't hit that key metric, it's the #1 reason you're not winning with money.

P - Plan for the Upcoming Month

Finally, plan for the upcoming month. Review your spending and allocations from the previous month and adjust as needed to stay on track with your financial goals.


If you didn't hit progress dollar goals for the preceding month, design an intentional spending plan for the upcoming month that ensures it happens.

Example: Categorize in Action

Let's pretend you have a $6,000 take-home pay for the month. You categorize every transaction, whether it's a credit card or debit card purchase. Avoid listing a lump sum like "credit card payment: $1,200" in your budget. Instead, break it down into categories like groceries, utilities, or entertainment. This makes your budget meaningful and actionable.

Once this is done each month, you ensure that you are making deliberate and effective financial decisions that will help you build wealth over time.

Remember, the key is consistency and keeping a close eye on where your money is going.