As a new doctor, you’re starting a new chapter in your career and your life. If you’re recently done with school, then it’s likely you’re earning a decent salary for the first time, and this is a great opportunity to get your finances on solid footing and start saving for your future.
Here are a few tips to help you get started:
Automate your finances whenever possible
This will help you stay on track with your budget and savings goals. If you’ve worked as a resident, you know how quickly time can get away from you and if you’re looking to grow a practice, you’re going to need to ensure your credit history is sound. By setting up automatic bill payments and contributions to your retirement account, you can stay on top of recurring payments and generate savings. Speaking of which…
Get serious about savings
You may be under the assumption you’re in better shape for retirement, but the cost of living continues to rise (faster than inflation). This means doctors need to save more to maintain their standard of living.
Additionally, many doctors have a shorter “work life” than other professionals due to health problems or burnout.
Last, there’s often a lot of debt you need to take care of, so saving 25-30% of your income each month will help you to work down your debt and reach your financial goals (such as buying a home, saving for retirement, and paying off debt).
Protect your income especially considering your health
Disability insurance is important for everyone, but it’s especially important for doctors. It can replace a portion of your income if you become unable to work due to an injury or illness. Not to worry you, but many doctors suffer from musculoskeletal disorders (due to standing for long periods of time). Additionally, the risk of contracting an infectious disease is much higher than other people.
None of this factors into the mental health problems due to myriad stressors such as long hours, workloads and difficult patients. Save as though you’re one of your patients.
Develop a plan to repay student loans
If you have student loan debt, it’s important to have a plan to pay it off. There are a variety of repayment options available, so choose one that works for you. You may also want to consider refinancing your loans.
Now, regarding building your practice, here are some additional tips specifically for small medical practice owners:
Set financial goals for your practice
What do you want to achieve with your practice? Do you want to expand your services? Hire more staff? Buy new equipment? Once you know what your goals are, you can start developing a financial plan to achieve them.
Track your income and expenses
This will help you understand your financial situation and identify areas where you can cut costs. There are a variety of software programs and apps available to help you track your finances.
Create a budget
A budget will help you stay on track with your financial goals. When creating your budget, be sure to include both personal and business expenses.
Get professional help
If you need help managing your finances, consider working with a financial advisor. A financial advisor can help you develop a financial plan, choose investments, and make other financial decisions.
By following these tips, you can set yourself up for financial success as a new doctor and small medical practice owner.