Financial Planning for Doctors

What do you think the correlation is between burnout and money? Believe it or not, your relationship with money might have something to do with your burnout.  Your feelings surrounding it can have a huge impact on your well being. The truth is that money can be used as a tool, or it can serve as a shackle around your feet caused by financial burdens.  Used in the right manner, smart financial decisions will allow you to reach financial independence, and FI can wield powers against burnout.

Financial Independence gives you a choice.  You can choose how you spend your time, including continuing your work as a Partial FIRE physician.

The goal is to practice medicine because we want to practice, not because we have to due to financial constraints.

In other words, working toward financial independence can mitigate your risk of burnout!

The Financial Burden of Debt

Debt in our country is off the charts. The Wall Street Journal pointed out some of the largest sources of our debt, and I thought I would share them with you. 

These are in order from the first-largest expense:

Student loan debt is a national crisis that is growing. In 2004, it was $346 billion. Now, national student loan debt is almost two trillion. There are people refinancing their debt with family involvement or using their home equity line of credit.

Student loan debt is such a financial burden that employers are noticing the effect it’s having on their employees, too.  Recently, some have been stepping in to help them out! How? By matching their employees 401K for money they pay toward their student loans.

That may be even better than a student loan refinance ladder!

Physician Debt

Most employees would feel like their employer is invested in their well-being if they offered student loan help. This would surely lessen their financial burden.  It would show that they understand the huge financial burden and the ill-effects of stress on an employee. 

I think that is especially true in a profession as demanding as being a physician. 

Recently, someone told me about going to an EM conference. He talked to representatives from a big emergency medicine company, USACS. They employ several thousand physicians, and they had negotiated some student loan refinancing. 

If you refinanced through the company, you’d get an interest rate that was better than what you would get through a federal program. Even if you didn’t have great credit. As a part of their benefits package, if you refinanced with them, they would subsidize you down to four percent. They would do this by adding the difference to your paycheck. 

With our current interest rates, that may not sound like the best deal, but the point is that this employer was trying to help lessen the financial burden that debt has on their physicians.

The Survey Says…

Have you responded to a survey on physician burnout and depression?  Medscape releases one every January.  In it 35%-40% of all respondents had issues with burnout

What contributes most to feeling burned out? Physicians said…

Notice that none of those top reasons include the physician financial burden.

Yet, when the survey asked what would fix the 35-50% of doctors who are burned out (out of 15,000 respondents), what did they say?

Out of left field, the number 1 response was increasing compensation.  Apparently, doctors don’t make enough money.

Where is the Disconnect?

Something is not adding up…

There are so many things that need to be fixed in the system, but – despite our financial burdens – getting paid more is not the primary solution to fixing burnout.

As a reminder, what were some of the things that cause a physician’s frustration and burnout?

A lack of autonomy, dealing with the electronic medical record system, pre-authorizations, and insurance companies. Then there is the frustration of practicing medicine differently than you would otherwise, because of all these administrative issues. 

So how is more money the answer?

The short answer is…it’s not. 

In order to get to the real answer, we need a better question:

What leads to the chain of events that causes burnout, depression, and the hope that more money will make a physician feel better?

It starts with a story that I hear all the time. It’s the common story of the road to burnout

It begins when a physician is in their rigorous training. I’m talking 80-100 hour weeks, and with little to no sleep. They are missing many of the crucial family events, which causes them to miss their family and feel disconnected.

They witness the worst that life has to offer individuals and the people who love them while they are in training.  But the resident has hope that eventually they will be in a position to help people and make a difference.  

However, when they become a new attending physician, the burnout often becomes worse. They exchange the frustrations of being a resident for the different stressors of being an attending physician.  In the end, the light at the end of the tunnel isn’t as bright as it seemed.

Like Dr. Jones, they compensate by trying to buy happiness.  However, this just adds to their financial burdens given their looming student loan debt. In the end, these purchases often make a bad situation worse. 

There it is, the recipe for burnout and depression. 

Your Money or Your Life

Money can’t buy love or happiness. However, it can be used as a tool if wielded properly. 

We can make smart financial decisions to lessen our financial burdens.  Then, we can find the work-life balance to make the journey one we will want to travel.

Most physicians didn’t go into medicine just to earn a bunch of money.  They did it to help patients. Yet, more and more often, physicians area also declaring that they want work-life balance.  They want to enjoy life outside of the hospital, too. 

When a doctor’s work-life balance is missing, and they have a system that is so broken staring them in the face… physicians start looking for a way to join the drop out club.

And the one thing a physician feels like they can control is their finances, which is likely why they feel like getting paid more will fix their burnout.  Unfortunately, it doesn’t work.

How to Fix The Financial Burdens

In order to become a physician, you must be intelligent, dedicated, and hard-working.  If you apply these principles to personal finance, it can become quite easy to manage on your own.  Medicine is much more complicated than learning about money.

Yet, I know most doctors won’t do that.  In my opinion, many physicians could benefit from using a fee-only financial planner. The right one can help educate you regarding money and finances. 

If you choose not to learn what a doctor needs to know about money work or work with a fee-only financial planner, you could end up backing yourself into the proverbial corner, with a huge yearly income, but living paycheck to paycheck. 

You’ve worked too hard to put yourself in that position. That is a surefire way to increase your feelings of being overwhelmed by financial burdens, stress, burnout, and then feeling unbearably stuck.

It comes down to your relationship with money, and what you want out of life.  Becuase, in the end, your relationship with money has a profound impact on your ability to prevent and treat the burnout that threatens your career.  It isn’t the answer to the systematic problem of burnout that exists, but it can help (or hinder) your journey along the way.  

It’s your choice.

Are you experiencing burnout or depression? Learn how to fight back with financial indpendence!  Leave a comment below.

TPP

3 thoughts on “Financial Burdens and Physician Burnout”

  1. Jimmy-
    I’m loving the Wednesday podcasts with you and Financial Residency. You’re doing awesome! Great post on the financial burdens of debt. I’d love to see all physicians get completely out of debt and feel the freedom of being debt-free.
    -Brent

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