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Welcome to the latest episode of the Physician Cents Podcast, where we explore complex financial topics tailored specifically for physicians. Whether you're a medical student, resident, fellow, or attending physician, you're going to find valuable insights that can help you increase your financial IQ, further your financial journey, and improve your overall well-being. Hosted by Chad Chubb and Tyler Olson, let’s dive in!
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As physicians, many of you know the feeling of being seen as the primary breadwinner for your families. Once you reach a certain level of financial stability, it’s normal to start thinking about how you might support your loved ones. But how can you help them without putting yourself at risk financially? That's the very question that sparked an important episode of the Physician Cents Podcast, hosted by Chad Chubb and Tyler Olson.
In this episode, a listener asks: “If you have a family member whose expenses you plan to cover, along with giving them some spending money, how do you go about it?” This is a crucial question that many physicians—who often become the highest earners in their families—face after their long and grueling training finally pays off.
Let’s dive into some insights they shared and how you, as a physician, can responsibly support the people dearest to you.
Physicians often have unique financial dynamics. Not only are they tasked with managing the high demands of their own careers, but they may also feel the pressure to provide for family members—whether that's parents, siblings, or even extended family.
Deciding to help family members can be rooted in deep emotional and cultural values. For one physician, the need to support a parent might be endless, while for another it could entail sending a few thousand dollars to a family member every month. The essential part is honoring these values, but doing so thoughtfully.
One of the key points raised in the podcast is that generosity can be tricky. The desire to give financially comes from a good place, but if it’s done on shaky financial footing, it has the potential to harm everyone in the long run.
So, it’s worth asking: How can you help if you don't have your own house in order yet?
The podcast listener who submitted the question summarized their situation well: They wanted to regularly send money to a parent to cover both their expenses and some extra “spending money.” However, they weren't sure about the best way to do it. Should they set up an account? Should they just use their salary? Is this even feasible on a physician’s income?
These are questions many physicians wrestle with. You work hard—you’re earning significantly now—but where do you draw the line when it comes to supporting your family financially?
Before putting yourself in the role of a financial provider, you need to ensure you’ve got your own financial foundation covered. Chad and Tyler emphasize this: build a robust financial plan for yourself first.
That means you should focus on the following:
1. Budgeting: Understanding how much you earn and where your money goes every month is critical before you commit to sending money elsewhere. Take an honest look at your income, necessary expenses, and discretionary spending.
2. Emergency Fund: Before you start providing monthly support, make sure you have an emergency fund in place. A good rule of thumb is having 3–6 months' worth of living expenses saved up.
3. Retirement Savings: No matter how much you want to give to your loved ones, you cannot put your long-term future on the back burner. Aim to participate in your employer’s retirement plan (401k, 403b, IRA, etc.) and contribute regularly.
By getting these basics in place, you'll gain a clearer understanding of how much money you have left over to help someone else.
When deciding how to allocate your money, Chad and Tyler remind us that financial decision-making shouldn't be solely transactional—it needs to reflect your core values.
For some physicians, supporting their loved ones, especially parents, is non-negotiable. Maybe your parents helped put you through medical school or made sacrifices that paved the way for your success. Financial support in return is how many repay these acts.
On the flip side, providing constant financial support can backfire if it starts to negatively impact your life. Chad and Tyler describe how repeatedly giving financially without boundaries can hurt you, your mental wellness, and ironically, the very people you aim to help.
The key takeaway? Balance is everything.
Consider these questions:
The next major consideration is taxes. The IRS imposes limits on how much money you can give to individuals without having to involve Uncle Sam.
For 2024, the gift tax exemption allows you to give up to $18,000 to an individual per year without having to file any IRS paperwork. If you decide to go over that threshold, you'll need to submit a form with your taxes detailing the larger gift amount. It’s important to note that exceeding the $18,000 limit starts to chip into your lifetime exemption—which currently sits at around $13.61 million. However, most people never hit that.
So, if you plan to give a parent $3,000 each month ($36,000/year), you’re comfortably within this cap. Chad and Tyler clarify that this can be managed with straightforward tax forms, noting that most accountants view the extra paperwork as no big deal.
However, should you find that gift thresholds are too tight, salary-based compensation might be an alternative. Setting up a family member on payroll (for example, a parent babysitting your children) not only benefits them but can also help them accrue Social Security credits. As a result, they might also become eligible for Medicare in the future.
If direct gifts of money cause hesitation, there are still multiple creative ways to support your family.
1. Put Them on Payroll:
This option is very common when family members contribute to the household by offering services like childcare, cleaning, or even errands. Setting up a proper payroll through platforms like Gusto is fairly simple. This also ensures Social Security credits accumulate, which could benefit parents down the road with Medicare.
It's worth noting that Chad advises caution here, as you’ll need to formally structure this through proper documentation to avoid any questionable family lawsuits. Yes, suing family members sounds pretty wild, but at times, it happens!
2. Set Aside Excess Wealth:
If you’ve got a decent amount of savings and want to support a loved one over the long term (but don't need to give them money regularly), you might consider a separate account like a high-yield savings account. This would allow your money to earn interest while sitting in a safe, FDIC-insured account. You can earmark this for future emergencies, large gifts, or ongoing support when the time arises.
3. Automate the Monthly Transfers:
Sometimes, a simple solution is best. If recurring monthly gifts of a couple thousand dollars are doable, consider setting up automated ACH transfers from your account to theirs. You can achieve this through online banking quite easily through services like Zelle or AppleCash. This saves time and reduces the monthly stress of manually transferring funds.
Now comes the conversation nobody loves: discussing money with your family.
Chances are, as a physician, you’re highly focused on keeping your own financial life on track. But when you’re stepping into the role of supporting someone outside your immediate household, it’s time to initiate a more open conversation.
You may want to approach parents carefully about their finances. Are they prepared for their future? Do they have savings or any debt? Although these conversations can be tough, they’re often necessary if you want to provide the best kind of support.
Chad and Tyler shared personal stories about how many clients have little idea about their parents' financial situation. Often, that ignorance can lead to bigger problems later—like discovering that a parent is working with an outdated financial advisor or has their nest egg sitting in a low-interest account without realizing there are better options.
Here’s an example approach:
The goal? Transparency. Having conversations around estate planning, current debt, or investments can help everyone involved feel more secure.
While it’s crucial to help loved ones, you can’t deplete your resources. Many financial planners promote the "oxygen mask" metaphor: Put on your own mask first before helping others. If you give endlessly to help someone else, you could hinder your well-being and your future.
Decide what boundaries need to be in place. That might mean you forsake a vacation or delay a big purchase—but it doesn’t mean destabilizing your financial life.
Supporting your loved ones financially is undeniably important. As physicians, with usually high incomes, we sometimes feel expected to help not just immediate family but distant relatives too.
However, it must be done wisely. Chad, Tyler, and the podcast make clear that managing personal and family finances, particularly for physicians, is a balance of values, strategic planning, and sometimes difficult but necessary conversations. Whether you’re automating monthly transfers or considering setting parents up on payroll, there are multiple ways to stretch your financial generosity while keeping your own financial well-being in check.
Don’t hesitate to reach out for guidance when facing these tough decisions. A financial advisor can help you map out the best plan while respecting your values—and protecting your future.
The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don’t expect!) about a sponsor, please let us know. We call it the “best of the best” for a reason, and we will maintain that standard for our listeners & viewers.
This information is for general purposes only. This information is not intended to be a substitute for specific professional financial, tax, or legal advice, as individual circumstances vary. Please see a financial professional, CPA, and/or an attorney in regards to your own individual situation.
Wealthkeel’s Advisory Services and Financial Planning offered through Vicus Capital, Inc., a Federally Registered Investment Advisor. WealthKeel LLC, 615 Channelside Drive, Suite 207, Tampa, FL 33602 -- 267.590.9533.
Olson Consulting LLC, Offering Advisory Services and Financial Planning, is a State-Registered Investment Advisor.
A podcast designed specifically for physicians, offering a breakdown of complex financial topics to help you develop your financial IQ, further your financial journey, and improve your well-being. Whether you're a medical student, resident, fellow, or attending physician, you're sure to learn something new that will benefit your journey.
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