There’s no doubt about the fact that doctors make quite a bit of money—and for good reason.
According to a blog post by LeverageRX, the average salary for a practicing doctor is around $313,000 a year.
But there’s another side to this.
They literally go to school for years.
Plus, they’re often required to rack up pretty considerable amounts of student loan debt, just to make it through college.
According to Forbes, the median medical school debt among the class of 2021 was $200,000—and that was not including the undergraduate debt.
And honestly, this places a pretty severe barrier to entry on becoming a doctor in the first place.
So, when doctors actually get to work—due to the in-demand nature of their highly specialized abilities—they can generally command a pretty formidable wage.
However—a lot of people don’t realize this, but some doctors actually run into quite a few financial troubles, despite the fact that they’re making all of this money.
And the reason for this is pretty simple.
As it turns out, if you don’t obey some pretty common sense financial principles once you come into that larger amount of money, you can really set yourself up for disaster.
And sometimes, you can even end up worse off than you were before you started school.
So let’s talk about 5 tips that doctors can use to effectively manage their personal finances.
If you’re a doctor who’s planning a bright financial future, here are some tips to consider.
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1. Take Stock Of Your Income
Understanding your income is crucial to the process of taking charge of it and making good decisions about it.
Hopefully, you make really good money as a doctor.
However, it’s important that you don’t just cash your paycheck and spend it all.
Take some time to plot out your income versus your expenses, and really make sure that you do the math between the two.
2. Resist The Urge To Start Spending
When you start cashing those big medical doctor paychecks, you may start to think to yourself:
“Wow, now I can afford that car I always wanted. Now I can afford to buy that bigger house. Now I can afford to buy those trips and toys I’ve been wanting to buy my whole life.”
But here’s the thing.
Don’t forget that it’s crucial that you set yourself up for success before you start spending a bunch of money.
Here are some tips on how to do exactly that.
3. Live Beneath Your Means
The best way to get started on the path to financial freedom as a doctor is to start out living far beneath your means.
Keep living in that cheap apartment, and keep driving that beat-up car (at least for a little while).
When you start to get those big paychecks, you’ll want to put most of them in the bank and save up a bit of cash.
There are a few different reasons for this.
4. Aggressively Pay Down Your Student Loans
Unfortunately, those student loan payments won’t mess around.
You’re going to end up needing to pay them down sooner than you think.
And if you don’t start whittling away at them and taking big chunks out of that principle, you’re going to end up hurting yourself in the long run.
For best results, start paying down your student loans very aggressively.
Once you get those out from under you, you’ll breathe a sigh of relief as you enter a more stable financial chapter of your life.
5. Pile Up An Emergency Fund
It may not feel as glamorous to save as it does to spend.
But here’s the thing.
The better you get at saving up some cash to help you in the event of a rainy day, the more secure you’ll feel—and the better off you’ll be in your life situation.
Eventually, you’ll be able to leverage some of this money to upgrade your car, get yourself a new house, and hopefully, start building some financial investments for yourself that’ll help you to contribute to a big retirement.
But all of this is going to require that you start putting some money away and that you don’t blow it all on stuff right in the beginning.
Hopefully, this post has helped you to understand how doctors can make some smart financial decisions when they start getting those big paychecks.
Hey, Congratulations On Becoming A Doctor.
You can make a huge difference in the world, and those paychecks can make a huge difference in your life.
Just make sure that you use them wisely.