7 Financial Tips for Residents & New Physicians
Updated: May 26, 2022
The transition between training and a new attending job is one of the most important times in a physician’s career. Residents and Fellows focused on science and training with a grueling schedule, may enter their new positions feeling uncertain of how to manage their personal finances. Building a solid financial plan, making sure their money works as hard as they do, is imperative. By focusing on future financial goals and practicing smart money management, physicians will be able to enjoy the lifestyle they have worked so hard to achieve.
Partner with a financial professional as early in your career as possible. Financial professionals bring evidence-based expertise to the table, and allow your future financial goals to become a reality. Having a professional objectively review your personal finances can ensure that you are able to maximize your success during each stage of your career.
Devise a plan for student loans. Depending on your salary, it may be difficult to manage student loan payments while also setting aside money for retirement, down payments on homes, etc. Consider creating a monthly budget with a student loan repayment included. Student loan repayment options can be confusing, so consult an expert if this feels overwhelming.
Build an emergency fund. This will help bridge any gaps that are created by unexpected expenses, and can prove critical to achieving financial success. Without an emergency fund, you may be tempted to reach for money in your retirement account when faced with a financial discrepancy, causing potential fines and loss of funds intended for your future.
Learn how to effectively budget. Organizing your finances with a budget will allow for the protection of your money. Many credit card statements can divide your spending into categories, which can help you to more closely examine your total purchases. Also, there are also many smartphone apps that allow for the digital tracking of your finances.
Maintain a modest lifestyle for the first 3-5 years. It will be much easier to increase your budget as you advance within your career, rather than limiting yourself and your finances in the future.
Make sure you are appropriately insured. As you begin your journey as a physician, you will likely have high-income earning potential. Protecting your livelihood and income with Disability and Life Insurance can be smart financial moves, and becomes even more critical if you have a family or are planning to start one in the future.
Make intentional goals for yourself and your personal finances. Consider the bigger picture, and the “why” behind your money decisions to understand what financial goals you truly want to achieve.