Throughout a physician's career, he or she encounters different financial stages and should prepare for optimal financial success, according to Physician's Money Digest.
Here are the three financial stages.
1. Post-residency. Coming out of residency, many encounter large amounts of debt or other expenses. Saving all you can may seem obvious, but is a valuable lesson to ensure you have ample savings as you move onto the next phase of life. Allot a certain amount of your budget to cover groceries, dining out and entertainment. However, budgeting is essential in this phase of your career.
Some key ways for residents to save include:
• Enroll in the Public Service Loan Forgiveness program if you work for a nonprofit.
• Put $300 each month into an account you don't touch.
• Pay for your next car in cash.
2. Joining a practice. As you begin at a practice, you are likely to assume more financial responsiblity. The key when beginning this phase is to not purchase a house. If you purchase a home, a significant portion of your paycheck will go toward a house. To ensure you spend your money wisely, consider hiring a financial advisor who specializes in working with physicians. Do all you can to ensure you live debt-free.
3. Financial accumulation. When you are between 35 and 60, you may soon be facing retirement. This phase is highly focused on financial accumulation. Max out your retirement plan for a tax reduction and clear you student loans. Work with an advisor on a solid financial plan for retirement.
More healthcare news:
7 things for ASC leaders to know for Monday — May 23, 2016
Most non-group healthcare insurance enrollees satisfied with plans — 25 survey statistics
Start planning that trip to Maui: 5 ways physicians can retire at 45