Financial security is essential for not only fully enjoying your work but also to stay tension-free so that you could devote all your attention toward effective and dedicated patient care. Doctors who are overworked to meet the ever-mounting expenses like alimony payments, mortgage payments, boat payments etc. are always miserable and pose a danger to their patients. Financial freedom would imply eliminating all existing financial concerns from your lives.
When doctors are adequately insured, out of debts, and are on the right path to fulfill the investment and savings goals, they would be free to make important adjustments in their career. That may imply switching to fewer shifts or fewer callsat nights.It may also imply a relatively slower pace while in the clinic. Experts believe that financial security could culminate in making better doctors. Here are a few solid financial planning tips for young doctors to achieve financial stability and freedom.
Stay Within Your Means
Always get into the habit of saving a remarkable percentage of what you earn every month. Many doctors are using somewhere between 20 percent and 60 percent of their salary in making debt payments, purchasing income-producing assets, and saving for retirement. Even if you are aiming to retire at the standard retirement age, you would require saving at least, 15 percent to 20 percent of your salary all through your medical career.
If you end up spending almost everything you are earning, you are bound to encounter an uncomfortable retirement. You would not be flexible or capable of making any career changes. So, always be within your means and try saving a fixed percentage every month. It is better to seek the help of professional financial services for effective financial planning for physicians but ensure you are getting a good value for your money.
Lead the Simple Life of a Resident Even Few Years Post-residency
Focus on wealth-building activities very early in your career. Start an organized life and focus on minimizing expenses during the first few years post-residency. During the initial five or six years post-residency, you are not at all used to the high income, and so you would not really miss it. It is best to lead a frugal existence and continue typical resident lifestyle for a few more years. Focus on direct savings so that you could pay up your student loans and create retirement accounts.
Remember that things are going to get worse with time. For instance, long hours, frequent calls, disruptive patients, late-night work, and even bureaucratic hassles continue in the same oppressive fashion as time goes by. Assuming that you would not like to go on working hard and keeping up with a hectic schedule even at the age of 45 or so, it is best to sacrifice certain things now and do considerable savings now and enjoy the benefits and the rewards later on in life.
Opt for the Right Insurance
Consider insuring exclusively against financial disasters. Doctors often end up investing in wrong types of insurance. Doctors often end up purchasing insurance on iPhone or whole-life insurance. But it is better to invest in health, disability, personal liability, and term life insurance.
Doctors’ fulfillment would increase dramatically once the financial concerns are eliminated. Start gathering more knowledge about personal finance and start optimizing your financial life. This could be the key to a more successful, wealthier, and happier life.