Doctors often focus on helping everyone but themselves. New doctors and residents can spend days without sleep in the pursuit of their careers, yet not spend a minute planning their finances. And that practice can lead to overall bad ‘financial health.’
Just as physical and mental health are important while growing your practice, so too is your financial health.
Here are some of the most important things to keep in mind as you pursue financial health as a new doctor.
Pay Off High-Cost Debt
One of the best ways you can take care of yourself financially is to pay off expensive debt. Credit cards are usually the most expensive type of debt to carry, followed by revolving store accounts.
The amount you pay for this type of debt each month varies based on your annual percentage rate (APR) and the amount of debt on each card. The average credit cards in the U.S. start at just over 16% APR.
If you have a credit card with a $10,000 limit and you have it maxed out, even a low-interest rate of 10% could cost you $1,047 per year (with monthly compounding interest).
Bankrate reports that medical students hold $5,000 in credit card debt on average, while the number rises to 26% for employed physicians. Paying those cards and accounts down or completely off can potentially save thousands of dollars each year.
Personal loans for physicians can help to pay down your most expensive credit cards and accounts. By paying off high-interest credit cards or consolidating your debts into a lower-interest loan with a single payment, you can free up funds to use elsewhere.
Put Money Into Savings
Even the healthiest people can end up in the hospital unexpectedly. That is why physicians also need to put money into savings.
Your financial health will be in a better state if you can save up about three to six months’ worth of expenses in case of an emergency. While that’s not always possible when you’re also dealing with a high debt load, even starting with as little as $1,000 in an emergency savings account can help you to prepare for unexpected expenses.
By saving money regularly, you’ll be able to absorb the financial impact of that surprise with little or no financial changes required in your everyday life.
Invest in Your Well-being
Mental and physical health depend heavily on being able to rest and recharge. Over 50% of physicians report experiencing burnout. Of those, more than 10% reported making medical mistakes because of their burnout.
While it can feel like you never have time to step away from the demands of the job and decompress, in reality, it’s a vital habit that can help to improve your mental health, help you to connect with your loved ones, and help you to approach your medical career with renewed energy.
With this in mind, set aside a little bit of money for when you want to do something fun. You might go to dinner, catch a movie, or take a camping trip.
When you put aside money for fun and relaxation, you’ll come back to your career with better focus, serving your patients — and your family — better.
Build Long-Term Wealth
As Benjamin Franklin once famously said, “By failing to plan, you are planning to fail.” You don’t have to learn how to invest in the stock market or understand cryptocurrency to successfully build wealth. Building long-term wealth can be as simple as contributing to your retirement account, investing in diverse ETFs and funds, finding competitive loans for physicians, or paying off debts.
At Doc2Doc Lending, we understand that all of these elements are necessary to build a strong, sound financial base. We also understand that you might not always have the cash to make these goals a reality.
We designed our physician loans to help doctors achieve important personal and professional milestones in their lives without being hindered by short-term cash needs. As a company built by doctors for doctors, we provide an array of solutions for personal loans for doctors, all at reasonable rates. Get the financial support you need in a way that makes sense for your financial future.
