A white coat and financial stability do not necessarily go hand in hand.
Many physicians struggle to learn how to spend cautiously, save money and avoid debt. These financial obstacles can be attributed to a number of factors, including:
- Student loans. Years of schooling can cause many physicians to start their careers with large amounts of debt.
- Higher income taxes. As physicians start to take home bigger salaries, many forget to consider that they may have to pay a higher percentage in taxes than before. Such budget miscalculations can lead to large purchases, such as houses and cars, that physicians subsequently struggle to afford.
- A lack of financial expertise. Money is often considered a taboo topic in academic healthcare environments, which can deny physicians the opportunity to learn from the failures and successes of others.
- Private practice is a small business. Physicians who enter into private practice may lack the business acumen or the bandwidth to successfully manage the business while simultaneously practicing medicine.
Seeking the help of a financial advisor can help physicians mitigate many of these money problems and ensure that their earnings are subsidizing their financial futures. However, not every consultant is a good fit, according to the American Medical Association. Physicians should aim to partner with financial advisors who are familiar with the particular challenges they face.