A solid financial strategy helps you spend and save wisely
If you’re a medical student, you understand that money stress can start early. These money worries can drive you to lose sleep, regret spending decisions, and argue with significant others.
The Association of Faculties of Medicine of Canada recently reported that the median debt of a medical school graduate is $100,000, with 42% of students reporting a debt of $120,000 or greater.
Being in debt from medical school can affect virtually every aspect of your life, from buying a house and starting a family, to work-life balance and retirement plans. That’s why taking control of your money through careful planning—as early in the game as possible—is so crucial.
Young doctors: don’t let debt dictate your decisions
If debt is influencing your career decisions, you’re not alone. It’s a troubling trend that Dr. Moira Somers has seen firsthand among medical students at the University of Manitoba, where she teaches. Dr. Somers is an author and psychologist specializing in neuropsychology and financial psychology.
“If you’re putting everything on the altar of money and what gives you the most pay, you will not be rewarded in the long run,” she says. “There is a levelling-off of the relationship between happiness and earnings, and you will not get a much bigger bang for the buck just by earning more.”
Having a comprehensive financial plan in place, prepared with a financial advisor, will allow you to borrow—and spend—wisely during your school years so you can better control your debt load before you even launch into your career.
Sacrifice for a long-term pay-off when in practice
As you move through your prime earning years, managing your money well will be even more important. As a high earner, you’ll have enough flexibility to maintain a comfortable lifestyle, but it’s essential to build in a plan that helps sustain you through life’s big moments.
If you spend modestly and save as much as possible, you’ll have more than enough to sustain you through anything life might throw at you, including marriage, kids, home buying, and retirement.
Dr. Somers says that maintaining a simpler lifestyle can be tough, especially when the money starts rolling in. It’s not uncommon to see young physicians splurging when they begin earning, and the key is not to fall into a pattern of hyper-consumption.
Buying expensive homes and cars may feel good in the moment, but doing so may force you to work harder and longer in order to keep up with your payments. While you don’t need to be a minimalist, kicking it Marie Kondo-style and spending your hard-earned cash only on the experiences and things that bring you joy will ultimately lead to a happier outcome.
A good advisor goes a long way
Start thinking about retirement as you begin to advance in your profession. Most physicians don’t get any pensions beyond basic Canada Pension Plan and Old Age Security, so saving for retirement during your earning years is a huge responsibility.
Dr. Somers recommends finding a reliable financial advisor you feel comfortable with early on—someone who can help you determine what your retirement will look like and figure out how to plan for it.
Financial advisors can help you sort through other important life transitions, such as budgeting for a wedding, starting a family, buying a house, caring for aging parents, and everything in between. They can also help you lower your money stress, while significantly boosting your sense of financial and emotional wellbeing. In other words, solid financial planning can enhance your overall sense of contentment.
Those findings resonate with Dr. Somers.
“A couple of sessions with a trusted advisor can help to short-circuit the pain of financial problems,” she says. “They will help you arrive at better solutions faster and with less stress.”