5 Financial Issues Young Physicians Face

MyLife Financial Physician Financial Planner

It's no secret that physicians spend the bulk of their younger lives in school and training for a career in medicine. The hope is that this career will bear the fruit of a lifestyle they want to live. While some physicians may take a personal finance class in school or follow their favorite personal finance blogger or podcaster, many don't have the time or inclination to want to learn the ins and outs of comprehensive financial planning. The easiest way to get through the first few years after Med school is to "spend less than you make," right?

While that's sound advice for anyone, there are a few financial issues at the beginning of a physician's career that can bog them down if not handled well.

Student Loan Debt

Skyrocketing student loan debt has been a hot topic for this country for a while now. According to a Forbes article, the average student loan debt per borrower is $28,950 while another article published by Forbes stated the average medical school debt is $194,280; THAT'S NEARLY 7x MORE THAN THE AVERAGE COLLEGE GRADUATE. There's a saying in the financial industry, "Once in debt, interest is your companion every minute of the day and night.... whenever you get in its way or cross its course or fail to meet its demands, it crushes you."

Early in a physician's career from residency to your first attending position, it's important to create a repayment plan for your student debt, one that doesn't interfere with both your lifestyle and savings goals. The key to paying down student debt is to pay it down as fast as you can. While this sounds like common sense, "paying down student debt as fast as you can," looks different for everyone because we all have different needs. This is why it's important to re-evaluate your repayment plan annually.

Lifestyle "Creep"

Lifestyle "creep" is something that occurs to a number of us when our income rises. It's normal to want to buy nice things or things "we deserve" now that we're able to afford them. This phenomenon typically occurs in young physicians when they get their first attending physician offer. Thoughts of owning a Tesla or building a new home may start to creep up. And why not? You may be able to afford them, right?

While you may be able to afford a lot of the finer things in life now, it's important to remember two things, 1.) You may have student loan debt still hanging around and 2.) You started saving for retirement later in life. Increasing your standard of living is not a bad thing, however, you may be better off deferring the bigger home or fancier car for a few years to put yourself on sturdier financial ground.


It's only natural to want to settle down somewhere after spending a year or two there. After a while, it becomes "home." Young physicians in residency, while they don't earn as much as an attending physician, can still make an income sufficient to get them in a starter home. While this can be the entryway into real estate investing, at a young age, liquidity is typically more important.

After all, a physician in residency typically ends up taking their first attending offer in a different city or state. The same applies to young physicians with their first attending position. After the first few years in the field, they have a better understanding of the type of work environment they want to be in, where they would prefer to work, and how they prefer to practice. Owning a home during the early years of practice comes with the usual hurdles when relocating, finding a buyer, making sure the home is up to date in code before the sale, potentially paying for a mortgage and rent while selling, etc...

Investing in Private Real Estate Too Early

Diversifying your investments is key to reducing market risk and adding real estate to your investment portfolio is a smart thing to do. Real estate is generally unassociated with stock market correlation and can bring positive gains in times when the stock market takes a dip or when inflation is high. Generally, when talking about investing in real estate, private real estate investing is what people talk about. This includes rental properties like single-family homes, multi-family homes, and commercial rental spaces. As mentioned earlier, tying up money this early in a career can be a recipe for trouble. It can mean not paying off your student loans fast enough, not adequately funding an emergency fund, and potentially not being able to occasionally splurge to relieve burnout due to the ongoing cost obligations that come with rental real estate.

This is not to discourage young physicians from ever owning rental properties, however, at the beginning of their careers, there are so many competing agendas that private real estate investing may not fit in.

Not Saving for Retirement

Life happens to all of us and sometimes we put off the things that are furthest away or have less priority due to need. I mean, what 20-something-year-old is really thinking about retirement, right? Because physicians tend to start their careers later in life and tend to want to retire earlier due to a demanding schedule, this leaves them with a compressed time frame to save for retirement with little room for error.

Many young physicians can get sidetracked with financial opportunities and side hustles early in their career that saving for retirement can sometimes take a back seat. Don't let that happen to you. Start building the habit of saving as early as possible and use time to your advantage. In the grand scheme of saving and investing, the earlier you begin the better.


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MyLife Financial is a fee-only, virtual financial advisor providing objective and independent advice virtually. Our clients are busy professionals that face daunting questions of how today's financial decisions will affect their long-term financial success. Everything written is strictly for informational use only. Please seek the advice of your CPA, Attorney, or financial professional before implementing any strategies.

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