Managing Your Finances as a Doctor: 5 Tips for Staying on Track

As a doctor, you likely make a significant amount of income.

But this doesn’t exempt you from the need to manage it wisely.

Here’s the thing:

Doctors need to manage their finances strategically in order to stay on track for the future.

Sure, you earn a pretty decent wage as a doctor.

But it’s also true that a high wage can easily be spent far too fast when it isn’t managed properly.

So in this blog post, we’re going to dive into this topic by sharing our top 5 tips for staying on track financially as a medical professional.

With your high-value skills and expertise, you could set yourself up for a fantastic life of financial peace.

It’s just really important that you follow these tips so that you can make the most of your advantageous position.

Let’s dive into it.

Table of Contents

1. Make A Budget

This may sound like cliche advice.

In fact, it’s technically the oldest advice in the book.

But it’s still really important.

Until you make yourself a dollars in-dollars out a budget, you’ll constantly run the risk of shorting yourself in the long term when it comes to your income.

It can be surprisingly easy to spend even a higher than average doctor’s wage when you aren’t paying attention to how much is coming in and going out of your bank account each month.

So just remember—making yourself a simple budget and sticking to it every single month is going to be crucial to making the rest of your financial plan work.

2. Contribute To Your Retirement Account

As a medical professional, it’s going to be crucial that you contribute handsomely to your retirement account every time you get paid.

There are multiple reasons for this.

First of all, you get tax breaks on the extra income generated from contributing to your retirement.

Secondly, your employer probably matches your retirement contributions up to a certain percentage—and that’s pretty much like getting an extra raise and free money.

Thirdly, you’re going to want to set yourself up for a comfortable retirement so that you can look forward to some time off after your career.

You deserve to look forward to that ‘life after work’ after a successful career as a medical professional.

You, as a doctor, dedicate your entire career to helping others and saving lives, often at the expense of your own personal time and well-being. Therefore, you deserve to enjoy a fulfilling retirement with ample time for rest, relaxation, and pursuing your hobbies and interests.

3. Live On Less Than You Earn

Right next to the advice on making a budget, this is probably the oldest financial advice in the book.

But guess what? Some of the wealthiest people in the world still live by this principle, even when their income has greatly exceeded the average earnings potential.

The truth of the matter is that you can never outwork an unbalanced budget and lifestyle.

It’s really important for you to live on less than you earn so that you don’t spend all of your money at the wrong time and on the wrong things.

It may sound square and boring at first. But in the long run, it’s the right financial play.

4. Invest In Your Future

Investing in your future basically means putting money aside for the things that really matter.

For example, you may want to buy a house one day.

You may want to go on vacation, buy a new car, or even start a side business.

You may also want to purchase stocks, or even purchase a rental property that you can use to generate more income in the future.

Regardless of what it is, it’s really important for you to set money aside for the things you really care about in your life—things that will contribute positively to your future.

5. Use Loans Strategically To Raise Your Credit Score

Sometimes, doctors have a challenging loan situation with money.

When you first get out of medical school, your debt-to-income ratio won’t look very good.

And this can make it difficult to get loans.

With that being said, it’s really important for you to look for alternatives that you might be able to use to supplement your credit line in the short term.

Physician’s loans are one example of this.

They’re basically specialized loan products that will help you to get loans even when your financial situation might not look that great on the traditional loan paperwork