Doctors make a sizable income but when they are first starting out, it can be very difficult to get a grasp on their finances because of their huge medical school debt. For some tips on how to save money as a new doctor, please read on!
Start Paying Student Debt Early
Most young doctors graduate with hundreds of thousands of dollars in debt from medical school. Unfortunately, the debt will grow because a lot of the loans they took out have a 5 to 6 percent interest rate. To avoid increasing the amount of debt you are in, you should start paying off your high interest loans as early as possible. The reason is because even if you try to save money instead, the amount your savings can earn will still cost less than your loans.
A lot of young doctors make the mistake of living beyond their means. Instead, you should plan out a budget and focus on minimizing costs. Food, transportation, and housing are usually the biggest costs and so if you are smart about them, you can save yourself a lot of money.
Invest Early and Aggressively
As a new doctor, you do not want to wait to start investing your money. Open up a 401(k) account and start putting in at least 2 percent of your paychecks. Once you get more financially established, you will want to increase the amount of money you invest. Many people make the mistake of not investing money because they think in the short-term. However, once it comes to retire, you will wish you saved more when you were younger. If you want to know how much you should start saving now to accommodate your needs when you’re retired, utilize a retirement calculator.
Consult With a Financial Advisor
It never hurts to turn to the professionals for financial advice. They can assist you with getting yourself on a good track to financial success and also ensure you are protected from potential lawsuits and malpractices.
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