Life as a young physician can be pretty hectic, especially for those pursuing complex specialties. At the start of a budding medical career, it can be hard to get your finances in order, but with a checklist, it just got easier. We have a six-point financial checklist that will help young physicians make sound decisions without getting overwhelmed.
Financial Checklist For Young Physicians
1. Identify Your Goals:
Have you ever stopped to think about how much a resident doctor makes? Well, the answer is more than most people at the same point in their lives but less than other medical professionals in the same field. Identifying five-, ten, and fifteen-year goals is a great place to start.
2. Make A Plan For Debt Reduction:
Unless a young doctor completes their education on a full scholarship, chances are they will have some student loan debt. Before planning on buying a new home or car, it is critical that a plan is created to help manage existing debt. This can be as simple as a monthly payment plan or even an employer debt forgiveness benefit.
3. Get Insured:
In life, anything can happen, even if you are a healthy young physician at the start of your career. Life insurance, disability insurance, and malpractice insurance should be among the first steps when building a sound financial plan. Keep in mind these measures are intended to never be used, but rather serve as a safety net in case the unthinkable occurs.
4. Hire A Financial Planner:
It is important to surround yourself with professionals who are trained in proper money management. A skilled financial planner who has experience working with physicians will be able to help you set goals, invest, plan for your future, and grow your income throughout the life of your career. It may seem like a silly expense, but it will eventually pay for itself in spades.
5. Start Thinking About Retirement:
No one is going to work forever, at least that’s the goal. As such, it is important to start planning for retirement as early as possible. Physicians, even younger ones, are in a higher income bracket. It makes sense to start contributing to pre-tax accounts specifically for retirement. This will lessen the tax burden while earnings are high so that lower taxes can be paid on the money post-retirement.
6. Get Estate Documents In Order:
It may seem morbid to think about passing on so early in life, but there is no time like the present to prepare. This will ensure that any income and investments are passed on efficiently and end-of-life care is settled while the physician is of sound mind. This step includes preparing a living will, a healthcare power of attorney, a financial power of attorney, and a standalone will.
There are several advanced planning strategies young physicians can use that will help them build a strong financial future. From professional help to early investments, the possibilities are endless. With the checklist above, young medical professionals can get a clear idea about the steps they should take to ensure lasting financial success.