How doctors can weather the COVID-19 financial storm

By Physician Sense
Published April 19, 2020

Key Takeaways

There likely will not be a bailout for the American physician. With doctors ranking among America’s top earners, many will find themselves out of luck when stimulus checks and direct deposits start hitting mailboxes and bank accounts. Depending on your political and philosophical beliefs, you might think this is justifiable. That doesn’t change the potential financial hardship faced by physicians who were unprepared for a one-two punch of a pandemic and economic downturn.

Specialists may have the hardest road ahead. With elective and non-emergent surgeries on hold and office visits suppressed by social distancing, specialist revenue streams are trickling or have run dry. But even if you aren’t a specialist, your investment portfolio is likely just as bloodied as everybody else’s at the moment. Taking all of this into account, here’s what physicians should do to weather the financial storm, according to W. Ben Utley of Physician Family Financial Advisors.

The low-hanging financial fruit

First, let’s get the basics out of the way. You can do these things in an afternoon to boost your liquidity and prepare to weather the financial storm. Take a few hours to knock these out.

Revisit your budget

The bill comes for your top-of-wallet credit card and (hopefully) you pay it. But when was the last time you looked at the transactions? All of those recurring charges add up. Review your most recent credit card statements for services you aren’t using and cancel them to free up some extra money. Here’s what to look out for

Put major purchases on hold

It’s time to put a freeze on discretionary spending, especially major purchases, Utley says. Situations like this often require cash, and you don’t want yours to be spent on something that you’ll come to regret later. If you were considering buying a home, a car, or undertaking some home improvements, it’s time to press pause and wait to see how this thing shakes out.

Cancel your vacations

This week’s news about the potential human cost of COVID-19 — anywhere from 100,000-240,000 — was probably the most dire we’ve encountered to date. That said, it doesn’t look like any of us will be traveling anytime soon. If you have summer vacations pending, it might be wise to cancel and get a refund while you still can. 

Bigger-picture financial moves

These tasks are a bit more time-intensive, but they’re where you’ll reap the biggest savings during financial turmoil. Put in the legwork now and you’ll be happy you did later.

Refinance your mortgage

Refinancing is going to require a bit more work on your part. There’s a bit of homework involved. You’re going to want to know how much equity you have in your home, your credit status, and your debt-to-income ratio, among these other factors. But it will be worth it, Utley says, and the time to act is now.

“If you own a home, you need to be looking at your mortgage because rates are at historic lows,” Utley says. “This is the first year we’ve seen the 10 Year Treasury Note break 1 percentage point.”

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