Posted on: 14 March 2017Share
If you are a doctor that has recently completed your residency and is now practicing, you are likely relieved to have a steady, relatively high income. This will allow you to pay off your medical school debts, as well as allow you to live a little bit more comfortably. You might feel like you want to blow your money each paycheck as soon as you get it on the nice items that you were unable to buy during your long years in school. This is not the wisest way to use your money. Here are some financial planning tips for young physicians that will enable you to be successful.
1. Don't Ignore Retirement in Favor of Debt Repayment
You might feel as though your medical school loans are hanging over your head. If this is the case, you probably want to get rid of them and pay them down completely as soon as you possibly can. You might be putting every spare dollar towards paying off your loans. Don't do this. Be sure that you are putting a few hundred dollars a month, or as much as you can possibly afford, toward your 401k or other retirement plan. This will allow you to make sure that you are going to be set when you get older. You will be paying off your student loans for a long time. A few months more isn't that big of a deal, especially compared to the amount of money that your 401k will generate.
2. Start Saving
Create an emergency fund, regardless of your student loan payments. This will allow you to ensure that you do not have to miss work or are otherwise derailed. You need to continue to pay back your loans as consistently as possible. Having an emergency fund will allow you to take care of yourself and ensure that you are able to keep working. Whenever you get paid, put between 10% and 20% into a savings account. This will allow you to not feel tempted to spend it.
3. Consider Disability Insurance
Finally, be sure that you get disability insurance in order to make sure that you have the money that you need to continue paying off your student loans and living in the unfortunate case of your disability. This will give you some peace of mind, as well as make your loved ones feel more comfortable.
For more information, talk to a company that specializes in financial planning.