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While very few doctors will say that money was a primary motivator for their career choice, most of us were reassured that it was a financially lucrative profession – icing on the cake to the calling of a field that allows you to impact lives. There are no standard conversations about the financial investment needed to reach the “doctor income” and certainly no guidance on money management or financial planning to help along the way.
Unfortunately, it’s this exact unstable foundation that sets many young doctors up for years of unnecessary financial stress. I learned that the hard way and watched a lot of brilliant colleagues make the same mistakes.
So, before you sign that first medical school loan promissory note, or as you’re getting ready to sign your first resident contract, or even before your first (or next) attending job, here is the “money talk” that we should get during training but never do.
Your “Future Attending Salary” Can’t Solve Everything
One of the biggest financial illusions in medicine is the idea that you can ignore money in training because you’ll “make up for it later.” I told myself this. My friends told themselves this. And then we all hit attending life and realized something: higher income doesn’t magically fix bad financial habits.
When you get in the habit of living paycheck to paycheck, that’s the relationship you build with money and savings. It might be $70k as a resident, but “more money, more problems” and suddenly even a $350k attending salary seems to vanish after each pay period.
Avoid this by:
- Learning to budget NOW! Create a basic written budget that helps you understand your needs versus your wants.
- Tracking where your money actually goes. This can help to identify “money sucks” and push you to identify ways to downsize or streamline. (Think about all of the different streaming service subscriptions you have and how much they all probably cost you each month.)
- Being wary of “lifestyle creep.” In the world of medicine where EVERYTHING is a delayed gratification, wellness sometimes comes from spoiling yourself. With each pay bump, we chip away another “struggle habit,” and that’s okay! Just be careful not to lose your good money habits along the way.
Not Every Credit Card Offer Is A “Deal”
Medical students and residents are easy targets for credit card companies and lenders. Credit cards help to fill the gap where our income falls short. Some credit cards also have great perks, or reward systems that you can cash in for flights, hotels, restaurants, and other discounts. Credit itself isn’t the issue—it’s treating it like free money.
Avoid this by:
- Limiting yourself to 1–3 credit cards. If you spend a lot of your money on something specific, consider strategically choosing a credit card to optimize rewards. All the points I earned on my airline credit card that I opened for residency interviews paid for my flight to relocate for residency and my first vacation!
- Paying off balances monthly. This isn’t always possible but at least consider paying more than the minimum balance to avoid high interest charges.
- Avoiding complex premium cards during training. Annual credit card fees can vary from free to upwards of $1000 per year. Think about this annual fee as part of your budget and part of your credit card limit..
Student Loans Don’t Just Go Away – They Build Interest
Medical training is long. That can work in your favor if you choose the right student loan repayment plan. Many trainees put loans into forbearance for years, letting interest balloon. If you have loans from different levels of education (undergrad, graduate school, etc.), make sure you keep track of all of them!
Avoid this by:
- Enrolling in Income-Driven Repayment early. If you are enrolled in Public Service Loan Forgiveness (PSLF) or a standard graduated repayment plan, you could make several years of qualifying payments at a lower income-based payment to help you pay less in the long run.
- Recertifying income on time. There are lots of steps involved in keeping track of loan repayments. You may need to consolidate; you may need to submit recertification to confirm income – don’t miss these deadlines!
- Documenting for PSLF if you’re pursuing it. Most ACGME residency programs qualify for PSLF, but you have to keep track of your documentation and submit it on time for your count to remain accurate.
Emergency Funds Are For The Unexpected
The average resident is one unexpected car repair away from chaos. You don’t always have the luxury to just pick up an extra shift or moonlight to fill the gap.
Avoid this by:
- Building a $1,000–$2,000 emergency fund during training. Work towards 3-6 months but at least have some money saved for that unexpected medical bill or car repair.
- Automating savings and avoiding credit card balances. Set up direct deposits or automatic transfers to a savings account to help you avoid spending all of your paycheck each month.
You Don’t Have To Be The Wolf Of Wall Street To Invest
Many trainees don’t consider investing as an alternate savings stream because they “don’t feel like they have enough money yet.” A $50 monthly investment in residency matters more than $500 as an attending because of compounding. In residency, I bought stock in Peloton, and then later sold my shares to buy a Peloton bicycle.
Avoid this by:
- Opening a Roth IRA. Start saving for retirement now. You might be able to do this through your employer or consider finding a financial planner to help.
- Automating tiny monthly contributions. Every little bit helps – contribute what you have. Pre-tax contributions can also help optimize your take-home amount.
Smart Decisions Start Now
You didn’t come this far to end up feeling financially overwhelmed as an attending. A few smart decisions early in your career can change your entire financial trajectory. Start small. Start now. Money isn’t about being perfect—just intentional.
