Money Meets Medicine Podcast
MMM 76: The Top Financial Rules for Residents and Fellows
What are the top financial rules a resident should follow while in training?
What if you had to write down a list of the most important financial tasks to tackle for physicians in training, what would be on it?
Ryan and I recently received an email from a listener of the Money Meets Medicine podcast who is a physician in training asking what the top things financially residents need to take care of before graduating from training.
So here is the official list from us here at Money Meets Medicine for The Top Financial Rules for Residents and Fellows.
Rule #1: Get a Financial Education
In order to do this you need to establish a base education on finances and they continue your education.
There are two tasks you need to check off when you are starting out. First, start reading or enroll in a course that is available to you where you are. Reading introductory books on finances is where to start. Then don’t stop. Keep reading, listen to podcasts (like Money Meets Medicine), and blogs like this one to stay up to date.
Rule #2: Create a Budget or a Cash Flow Plan
When you are still in residency, start your budget. We often talk about living like a resident once you become a physician and your budget will help you make these types of sound financial decisions. Don’t skip the budget!
Rule #3: Get Disability Insurance when you have a Current & Future Income to Protect (i.e. during residency)
Believe me, I have a personal story about why this is so important. I have lived through why it is important to have disability insurance to protect your income.
If you currently do not have medical problems, then recommend getting your own occupation specialty specific disability insurance from Ameritas, Guardian, Mass Mutual, Ohio National, Principal, or Standard.
If you currently are experiencing some problems, see if your employer has a Guaranteed Standard Issue (GSI) policy.
Rule #4: Get life insurance when someone is dependent on your income (spouse, children)
If it is not just you that you need to take care of in the future, life insurance is really key. Get it while you can.
Rule #5: Make a plan for your student loans
This is a big one!
Those student loans aren’t going to pay themselves and will keep you held back from financial freedom for a long time if you don’t make a plan. Make a plan and make it a priority.
Rule #6: Save 10% (conveniently the size of an IRA)
When you budget, make a plan to save 10%. Actually, start saving 10% of your income while you are still a resident. Make it a habit. Because when you can save 10% making about $64,000 a year, you can save 10% as your salary increases. Conveniently increasing your livelihood for the future.
Rule #7: When finishing, have someone review your contract!
Remember that everything is negotiable, including whether you sign that contract. Too many people get into a thought pattern that they are lucky to have a job and don’t have options. In reality, the job needs you and you have choices!
We also recommend really reviewing any non-competes in the contract and potential buyouts before becoming partner.
Rule #8: Don’t buy a house in training…
We know it is tempting, but when you are in training you need to focus on rules 1-7 to put yourself in the best financial position. Trust us, one day you will have the house, but training is not the time.
There you have it. The Top Financial Rules for Residents and Fellows so you can understand exactly what you should be doing and taking care of BEFORE graduating from training.
You don’t have to wait until you become an attending physician to get your financial house in order. There are key items you should be taking care of while in training to ensure your financial success and working on these important foundational items will set you up for early financial success as a practicing physician.
Physician freedom to choose to practice medicine because you want to and not because you have to come from the three pillars. One of those pillars is money. Learn how reaching financial freedom actually makes you a happier, better doctor inside the Alpha Coaching Experience. Join the interest list at https://thephysicianphilosopher.com/waitlist.
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