The top 3 financial mistakes doctors make (and how to avoid them)
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"Your future income is your greatest asset. If illness or injury prevent you from practicing, the financial impact can be devastating." — @SalaryDr
As a physician, your expertise lies in medicine, not necessarily in managing finances. But the financial decisions you make now can have a profound impact on your long-term well-being.
While many doctors are incredibly skilled at saving lives, they sometimes overlook their own financial health. Here are the top three financial mistakes doctors make, and how you can avoid them, according to @SalaryDr, a "physician pay transparency advocate" on TikTok.
Delaying retirement investing
It’s easy to think of retirement as something that’s far off in the future. For many doctors, the temptation is to wait until after becoming an attending before worrying about long-term savings. But this is a mistake that can cost you significantly in the long run.
Even if you can only save a small amount each month, it’s better than nothing. Time is one of the most powerful tools when it comes to saving for retirement, thanks to the magic of compound interest. The earlier you start, the more your money will grow over the years: "Remember: Every bit counts. Your future self will thank you for getting started sooner rather than later."
Related: How your expenses change in retirement—and what it means for your walletSkipping out on disability insurance
As a physician, your most valuable asset is your ability to work. But what happens if illness or injury prevents you from practicing? Without proper disability insurance, you could face a devastating loss of income.
Disability insurance is a safety net that protects you if you become unable to practice medicine. It's easy to push this decision down the road, but securing disability coverage early ensures that your future income is protected, no matter what life throws your way.
"Your future income is your greatest asset. If illness or injury prevent you from practicing, the financial impact can be devastating," @SalaryDr said.
Lifestyle creep
Once you start earning that attending paycheck, it’s tempting to upgrade your lifestyle to match. A new car, a bigger home, expensive vacations—these things seem to become much more attainable once you’ve reached the peak of your training.
Instead, "try to live like a resident for as long as you can," @SalaryDr advised.
Lifestyle creep can quickly eat into your savings. While it’s natural to want to enjoy your hard-earned money, resist the urge to dramatically increase your spending right away. By maintaining a modest lifestyle, you can prioritize saving and investing, which will pay off in the long run.
Related: 9 residents share top tips for managing finances during residency