Christie Costello, PharmD, BCPS, BCPP
Clinical Psychiatric Pharmacist
McLean Hospital
Belmont, MA
Christie Costello earned her Doctor of Pharmacy degree from the University of Connecticut (UConn) in 2020. She completed her PGY1 pharmacy residency at Bridgeport Hospital (Yale New Haven Health), followed by a PGY2 residency in psychiatric pharmacy at the Medical University of South Carolina (MUSC). Since completing her training, she has worked as a clinical psychiatric pharmacist at McLean Hospital, a world-renowned, free-standing psychiatric institution in Belmont, Massachusetts. During her time at McLean, she has served as both the PGY2 residency program coordinator and the student coordinator.
Full disclosure: I am not a financial advisor. I am a pharmacist who once assumed that earning six figures meant instant financial comfort. I quickly learned that a solid paycheck does not automatically translate to effortless wealth or luxury living, especially in certain parts of the country where a modest condo feels out of reach. Pharmacists earn a respectable income, and I am not here to downplay that. However, many of us end up in a middle space: on paper, we appear financially secure, but we’re still balancing student loans, rent, and everyday expenses that increase each year. Pharmacy school taught us how to manage complex pharmacotherapy, but it did not teach us how to budget, navigate major financial decisions, or invest. These are the financial lessons I wish I learned earlier in my career, because even a little awareness from the start can prevent a lot of stress later.
Building a budget
Before you begin building a budget, tracking spending for a few months helps you understand where your money is going and identify patterns. There are a variety of mobile apps, such as Monarch and You Need a Budget (YNAB), that can automatically compile, categorize, and summarize your transactions, though some may come with a cost. Many people find it just as effective to create their own spreadsheet, which allows full control and flexibility. Creating a budget begins with understanding what you want your money to accomplish. This includes thinking about short-term goals, such as saving for a vacation or a down payment on a house, as well as long-term goals like family planning or retirement.
Once you have a sense of your spending and goals, identify your net pay and subtract your fixed expenses, such as rent or mortgage payments, utilities, insurance, loan minimums, and transportation costs. Then estimate variable expenses, including groceries, dining out, personal purchases, and social activities. These naturally fluctuate, so it is helpful to give yourself some breathing room. Many people use the 50/30/20 guideline as a starting point for structuring their budget, with 50 percent of income going toward fixed expenses, 30 percent toward variable expenses, and 20 percent toward savings or debt payoff. This does not need to be followed rigidly but provides a framework. You can also consider setting up automatic distributions from your paycheck at work, directing a portion toward savings to make it easier to stay on track. The goal is to create a plan that reflects your priorities and remains flexible as your life changes.
Understanding the importance of an emergency fund
An emergency fund is something many people do not think about until they need it. Having money set aside for sudden expenses such as car repair, medical bills, or unexpected changes in employment can prevent reliance on credit cards or loans during stressful situations. The common recommendation is to save three to six months of living expenses, although the right amount for you depends on factors like job stability, dependents, and overall spending. For pharmacists who reside in high-cost-of-living areas or who have substantial fixed expenses, aiming toward the higher end may provide better peace of mind. Whatever amount you choose, keep this fund in a place that is easily accessible without penalties but still earning some interest, such as a high-yield savings account or a money market account. It is not intended to be an investment. Its purpose is to provide a safety net and the confidence that you can handle life’s curveballs. Having that cushion changes the way you approach stress and keeps unexpected events from derailing your long-term goals.
Investing and planning for the future
One thing I’ve learned over the years is that money does not grow on its own – it only grows when you put it to work. Even if we enjoy our careers, most of us do not want to work forever. Planning for the future requires intention, and relying on hope alone does not build retirement savings. Most employers offer a 401(k) or 403(b), which is often the most straightforward place to begin. Be sure to contribute at least enough to get the full employer match – this is essentially free money. Beyond workplace accounts, consider opening an Individual Retirement Account (IRA). Understanding the difference between a traditional and Roth IRA is important so you can choose the option that best fits your goals, income, and tax situation. It is also worthwhile to learn about Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) and determine whether they make sense for your healthcare and financial needs. By taking the time to understand these accounts, you can start putting your money to work in ways that compound over time.
A friend once told me that time in the market is better than trying to time the market, and that advice has stayed with me. If you want to grow wealth outside of retirement accounts, take the time to learn about the stock market and how to invest. Platforms like Fidelity, Vanguard, and Schwab let you open individual brokerage accounts and provide educational resources to help you understand different investment options and strategies. Start by understanding your personal risk tolerance and the differences between individual stocks, index funds, and bonds. The basics of investing are not as intimidating as they seem, especially when you approach them gradually and stay consistent. Even small contributions add up over time and can make a meaningful difference in the long run.
And while I am not a financial advisor, there are plenty who can help if you need guidance. But truly, if I can do this, so can you. Pharmacists are trained to think critically, analyze complex information, and pay attention to the details that matter. Those same skills translate surprisingly well to understanding the fundamentals of money management. The sooner you start, the closer you get to a future where your money works as hard as you do (and maybe even lets you retire early).