While earning high-income promises a better quality of life and a plethora of other benefits, it doesn’t guarantee long-term financial security. It’s crucial to make consistent and timely sound decisions to keep your finances in check.
In this post, we’re sharing certain financial blunders physicians often make. Take a look.
Neglecting Financial Literacy
While you learn a lot in school, financial literacy is often not prioritized. It’s no wonder that many graduates are clueless about financial matters. If you are still in med school, we urge you to sign up for a finance class that will help you take charge of your finances.
On the other hand, it’s not too late if you have graduated. There are plenty of resources available that will guide you through your personal finances.
Not Creating a Repayment Plan
Compared to an average college graduate, a medical student is likely to have significantly higher student loans. It would be best to go through all your loans and come up with a suitable repayment plan. We also urge you to seek student loan forgiveness programs to reduce your debt.
Drastically Changing Your Lifestyle
It’s normal to feel excited about receiving your first paycheck as a practicing physician. Though you are making a good living, don’t let that cloud your long-term financial goals. Many young physicians end up drastically changing their lifestyles according to their higher income. We encourage you to be mindful of your spending habits and try to save more.
Physicians are usually exposed to infections and other risks associated with the profession. Moreover, the past few years of the pandemic have highlighted the importance of dependable health insurance. Therefore, don’t neglect life and health insurance. Additionally, you should also consider auto and renters insurance to protect your assets.
Forgetting Tax Planning
Tax planning is an essential aspect of financial management. A little planning can go a long way in ensuring you can make the most of relevant benefits and rebates.
There’s no question that saving is a healthy habit. However, money holds the potential to make more money! Your savings aren’t doing much sitting in your bank account. You should explore different investment opportunities and start investing. From stocks to mutual funds, there are plenty of options.
Seeking Traditional Loans
Are you planning to buy a house for yourself and your family? Unfortunately, physicians and other medical professionals might not qualify for regular loans because of their high debt to income ratio.
But who said traditional loans are the only option? You can apply for a specialized loan known as Physician Mortgage Loan. For a physician loan, you don’t have to pay a Private Mortgage Insurance (PMI) or down payment. Moreover, these loans also offer flexibility when it comes to borrowing capacity. Head over to Leverage Rx to compare rates from the best doctor loan programs.
Trusting Risky Ventures
You have probably heard of the investment principle ‘higher risk, higher reward’. But you should be cautious about investing in risky ventures. If something seems too good to be true, that’s because it probably is. Make sure you practice due diligence before going ahead with a high-risk investment.
Not Consulting a Professional
Do you lack time to manage your personal finances? Instead of neglecting such matters, you should consult a financial advisor. A skilled professional can help you stay on top of your finances as well as avoid bad moves.
Understandably, your demanding profession probably doesn’t allow much time for anything else. However, it’s imperative that you take proactive steps to build a dependable financial future. Hopefully, the above-mentioned tips will help you avoid serious financial missteps.
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