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Bradly Stevens MBA, LUTCF®, CLU®, ChFC®, WMCP®, CEPA™

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Financial Issues Facing New Physicians

Financial Issues Facing New Physicians

| March 02, 2023

Becoming a physician is a significant accomplishment that requires years of hard work, dedication, and sacrifice. However, along with the satisfaction and fulfillment of a career in medicine, new physicians also face financial challenges that can be daunting. In this blog, we will discuss some of the most common financial issues that new physicians face and offer some tips to help them navigate these challenges.

  1. Student loan debt: The average medical school graduate has a staggering amount of student loan debt, with some estimates putting the average at over $200,000. This debt can be a significant burden for new physicians, especially those who are just starting their careers and may not have high salaries yet.

Tip: Consider refinancing your student loans to get a lower interest rate or consider a loan forgiveness program.

  1. Low starting salaries: While physicians can ultimately earn high salaries, many new physicians start with relatively low salaries, especially when compared to the amount of student loan debt they have accumulated.

Tip: Create a budget and live below your means. Consider taking a part-time job or moonlighting to earn extra income.

  1. High cost of living: The cost of living in some areas where new physicians practice can be quite high. This can make it difficult to manage student loan debt, save for a down payment on a home, or afford other expenses.

Tip: Look for ways to cut costs, such as living with roommates, taking public transportation instead of owning a car, or living in a less expensive area.

  1. Saving for retirement: New physicians may feel like they have plenty of time to save for retirement, but it's important to start early. Delaying retirement savings can mean missing out on years of compound interest.

Tip: Start contributing to a retirement account as soon as possible, such as a 401(k) or an individual retirement account (IRA). Consider automating your contributions so you don't have to remember to save every month.

  1. Lack of financial knowledge: Medical school may have prepared you to practice medicine, but it may not have prepared you to manage your finances.

Tip: Consider taking a financial literacy course or working with a financial planner who can help you create a plan to manage your debt, save for the future, and achieve your financial goals.

In conclusion, new physicians face several financial challenges, from student loan debt to low starting salaries and high costs of living. However, by creating a budget, living below your means, and taking advantage of opportunities to earn extra income, you can manage your finances and achieve your financial goals. Remember that it's never too early to start planning for your future and working toward financial security.