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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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Hey there, doc! You did it. You matched! Now what? Residency is about to kick off, and while you're busy saving lives, you can't forget about your own financial well-being. This isn't just about surviving residency; it's about setting yourself up for long-term financial success. So, let's get your financial house in order.
Congratulations! You're on the cusp of an incredible journey. But between the long hours and learning curves, your finances need attention. Did you know that smart financial moves now can save you big bucks later? This guide is your roadmap.
Why This Matters: Many residents don't realize the importance of early financial planning. Student loans? Budgeting? Insurance? They all seem like things you can deal with later. But trust us, tackling them now makes a HUGE difference.
What You'll Learn: We'll break down everything from student loans to emergency funds. You'll start your residency with a solid financial foundation, ready to take on whatever comes your way.
Let's face it: student loans are a beast. And if you want to make the most of your money, you have to slay this beast. You’ve got a mountain of debt, so let’s look at taming it.
The Grace Period: After graduating, your federal student loans enter a grace period – usually about six months. But here's the deal: doing nothing is not the best move.
Immediate Consolidation: Ever heard of consolidating your federal loans? Consider doing it immediately. Why? To jumpstart the Public Service Loan Forgiveness (PSLF) process. This allows you to make qualifying payments sooner rather than later.
Why is this important? Enrolling early lets you take advantage of income-driven repayment plans. These plans are based on a likely lower income. Some residents may even have a zero income at this point, but those months still count towards PSLF!
PSLF Eligibility: PSLF is a game-changer. But remember: you need to work for a qualifying non-profit organization to be eligible.
Income-Driven Repayment (IDR) Plans: You've got options! Choose an IDR plan that fits your situation.
Key Action: Time for action! Confirm your graduation status has been updated. You need this to access those loan consolidation options.
The Trade-Off Game: Starting IDR sooner? This creates an "arbitrage" opportunity. You’re trading lower payments early in your career for potentially higher payments later. It’s like a financial Jedi mind trick.
Why is this smart? Early payments are based on a lower income. This reduces the total amount you repay.
Non-Profit Employment is Key: Remember: PSLF needs you to work at a qualifying non-profit.
HCA Exception: Here's a curveball. Employment at HCA facilities generally does not qualify for PSLF. Why? Because it's a for-profit hospital.
Long-Term Training Programs: Got a long residency or fellowship? Even better! Start the PSLF clock early.
Example of Arbitrage: Picture this: Your initial IDR payment is $100. Later, your payment would be $2,000. You've created a huge advantage. You’ve locked in those lower payments early on.
It's federal vs. private loans. So which do you pick? When is it right to consolidate them? How do you do it?
Understanding the Risks: Listen up! Once you refinance federal loans into private loans, there's no going back. You lose access to IDR plans and PSLF. This is a one-way street.
Private Practice Considerations: Planning to enter private practice? Great! Still, start the PSLF clock just in case. Life throws curveballs.
Evaluate Your Situation: Ask yourself: Are you 100% certain you won't pursue PSLF? If not, keep those loans federal.
"Undoing" Your Loans: You can't "undo" a private loan refinance. Be absolutely sure before making the switch. No take-backs!
The Long Game: It's better to start the PSLF process. Switch to private loans later if your plans change. You can always change your mind.
Private student loans? These are a different ballgame. They play by their own rules.
Monitor Your Terms: Private loans have highly variable terms and interest rates. You must understand your loan details. Know your enemy!
High-Interest Traps: Some loans defer payments for years. But they accrue interest at high rates (e.g., 12%). Don't fall into this trap!
Refinancing Options: Time to explore refinancing options. Lower your interest rate or monthly payments.
Treading Water Strategy: Focus on cash flow during residency. A slightly lower interest rate might not be worth the extra monthly payment. Keep your head above water!
"No Payment" Deferment: Defer payments with minimal interest accrual if you can. That's often the best option during training.
Credit card debt? It's a silent killer. It sneaks up on you when you least expect it.
Medical School Debt is Normal: Medical students and residents accumulate credit card debt. The cost of living and studying is high. Don't beat yourself up. It happens.
Budgeting is Key: You need a budget. Understand your income and expenses. Know where your money is going.
Use ChatGPT: Use online paycheck calculators or tools like ChatGPT to estimate your take-home pay.
Itemize Your Expenses: Track everything. Rent? Utilities? Food? Entertainment? Know where your money is going!
Income vs. Expenses: Spending more than you earn? Time to make adjustments. Cut back where you can.
Proactive Approach: Attack credit card debt immediately. Your credit score will suffer if you don't.
Personal Loan as a Solution: Refinance high-interest credit card debt. Get a personal loan with a lower, fixed interest rate.
Debt Management After Residency: Pay off credit card debt aggressively once you become an attending physician.
Unsecured Debt: Credit card debt is "unsecured." It's not backed by collateral. That's why interest rates are sky-high.
Foundational Pieces: Getting credit card debt under control? It's a foundational step toward financial stability.
Long-Term Habits: Develop good habits early on. Avoid credit card issues in the future.
It's time to build your first budget. Let’s start simple, okay?
Income: Estimate your take-home pay. Use online paycheck calculators. Don’t forget state income taxes!
Expenses:
The Budgeting Reality Check: Expenses exceeding income? Cut back!
Personal Financing: For larger debt, consider financing into a personal loan. Check out companies like Laurel Road.
Imagine a financial safety net for you. That is an emergency fund. It will help cushion the blow when life throws unexpected challenges your way!
Why You Need One: An emergency fund covers unexpected expenses. Car repairs? Medical bills? Job loss? You're covered!
Start Small: Aim for $1,000 as your initial goal.
One Month of Expenses: Gradually build up to one month's worth of living expenses.
Separate Account: Keep your emergency fund separate. Make it easily accessible.
High-Yield Savings Account: Maximize your returns with a high-yield savings account.
The Power of Habit: Small contributions add up!
Peace of Mind: An emergency fund gives you peace of mind. You're prepared for the unexpected.
Employer benefits are a great way to save money and protect yourself. Take advantage of these opportunities!
403(b) Plans: Many residency programs offer 403(b) retirement plans.
Employer Matching: Take advantage of employer matching! It's free money.
Roth 403(b): If available, consider contributing to a Roth 403(b).
Contribution Limits: The 403(b) contribution limit is $23,500 (for 2025).
Roth IRA vs. Roth 403(b): If you want to invest Roth contributions, start with a Roth 403(b).
Auto-Pilot Investing: Automate your contributions. Set it and forget it!
Disability insurance is one of the best ways to protect your earning potential. It's a financial safety net for your future income.
Why It's Essential: Disability insurance protects your income. What if you can't work due to illness or injury?
Guaranteed Standard Issue (GSI) Policies: Many programs offer GSI policies. These let you get coverage without medical underwriting.
GME Office Incompetence: GME offices may not be aware of GSI policies.
Agent-Insurance Company Contract: The contract is between the insurance company and a specific insurance agent.
Independent Insurance Brokers: Use a reputable broker who knows about GSI policies.
GSI Confirmation: Confirm with an agent if your program offers a GSI policy.
Transparency is Key: Don't let agents sell you "shiny products" instead of a GSI policy.
Limited Window: You typically only have access to GSI policies during residency.
Peace of Mind: Disability insurance gives you peace of mind.
Podcast Plug: Check out previous episodes on disability insurance.
Ask Questions: If your program offers GSI, take advantage of it!
Long-Term Impact: Missing this opportunity can have life-altering consequences.
Federal Student Loans: These loans offer more flexible repayment options.
Private Student Loans: These typically have less flexible repayment options.
Loan Consolidation: Combine multiple federal loans into a single loan.
Loan Refinancing: Replace existing loans with a new loan.
Tax Credits and Deductions: Explore available tax credits and deductions.
Filing Status: Choose the most advantageous filing status.
Estimated Taxes: If you have income outside of your program, you may need to pay estimated taxes.
Credit Utilization: Keep credit card balances low.
Payment History: Make all debt payments on time.
Credit Monitoring: Regularly check your credit report for errors.
Start Early: Begin investing as soon as you can.
Diversification: Spread your investments across different asset classes.
Low-Cost Index Funds: Consider investing in low-cost index funds.
Retirement Accounts: Maximize contributions to tax-advantaged retirement accounts.
Investment Strategy: Develop a long-term investment strategy.
Financial Advisors: Consider working with a financial advisor.
Online Calculators: Utilize online calculators.
Books and Articles: Read books and articles on personal finance.
Professional Organizations: Join professional organizations.
Prioritize Financial Goals: Identify your most important financial goals.
Avoid Lifestyle Inflation: Resist the temptation to increase your spending.
Track Expenses: Keep track of your spending.
Make Informed Decisions: Make informed decisions about large purchases.
Financial Planning: Consider working with a financial advisor.
Student Loan Counseling: Seek guidance from student loan counselors.
Legal Advice: Consult with an attorney for legal advice.
Peer Support: Connect with other medical residents.
You've matched! Congratulations! Now it's time to take control of your financial future. You can build a strong foundation for success.
Good luck on your residency journey!
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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Conversations helping graduating medical students to attending physicians build a strong financial foundation
