All day long, I see people with problems, and use the SOAP note (1) to document the visit and, quite frankly, help me organize my thoughts. I thought I might apply it to a financial problem and see how it goes.
CC: I have a bonus coming and I don’t know what to do with it.
S: PiN is a 50 year old breadwinner with a PMH (past money history) which includes LCS (late career start) and PCS (primary care salary), who presents today with the above complaint. She has recently completed a multiyear plan of using any and all bonuses to pay down her mortgage; now that her mortgage payoff is complete, she is unsure of how best to use any extra income. Her uncertainty has been exacerbated by the announcement of an upcoming bonus. She wants to be sure she is putting the bonus to its best use. She has never had this problem before. In the past, she has had a written plan for her income (2), but she is not sure it is still applicable.
O : Vitals: Reviewed and stable.
- General: Appears stated age, married, sole breadwinner, no dependent children, in no acute distress.
- 6-month emergency fund: complete.
- Retirement fund: 18.3 times 2018 spending (less mortgage P&I payments).
- Retirement contributions:
- 403(b): maxed.
- IRA (backdoor): maxed.
- Spousal IRA (backdoor): pending.
- Additional contributions, either to taxable account or 457: pending.
- Mortgage: complete.
- Car Loan: at 0%, no plans to pay off early.
- 529 accounts: for nieces/nephews. All contributions are voluntary.
- Special savings. These accounts were raided to help pay off the mortgage:
- Travel fund: restored.
- House fund: restored.
- Car Fund: still below goal.
- Unfunded plans:
- Multiple house projects of unclear scope and cost.
- A piano purchase remains on the horizon.
A: On review, the patient has 3 clear insufficiencies: funding the spousal IRA, restoring the car fund, and assuring sufficient savings to cover the house projects which cannot be postponed. For the long term, her retirement contributions would likely benefit from an increase in either her brokerage fund or from contribution to a 457.
P:
- Discuss spousal IRA with spouse.
- Top off car fund.
- Enjoy a little of that bonus money for frivolous treats (see The Physician Philosopher’s 10% rule).
- Set aside remainder of bonus (if any) for house projects. Preferably in a high-interest savings account (must research).
- Once scope of house project(s) is clear, it is time to consider further contributions to retirement funds.
(1) For those not in medicine, the SOAP note format is thus: the chief complaint (note there is no “C” in the abbreviation); subjective (the patient history), objective (physical exam, including vitals!, and data, like labs and imaging), assessment (what do you think is going on), and plan (what are you going to do?).
(2) The IPS, alternately noted as the Investment Personal Statement and Investor Personal Statement, should be a thoughtful exploration of life goals and how you will manage your money to achieve them. See also The White Coat Investor and Physician on Fire posts on an IPS).