As we've reported previously, being a new doctor--with debts to pay and a practice to build--makes for some complicated financial planning. But a new, seven-part guide based on the book, Generation Earn, by Kimberly Palmer, is designed to help young doctors make decisions that will deliver them safely from digging out of debt to beginning a family and beyond.
Among Palmer's tips, plus interviews with young doctors and financial experts, as summarized in U.S. News & World Report:
- Budget. Try to contain what you spend on food, transportation and housing to comprise half of your income rather than the typical two-thirds. Set some of the savings aside to invest in association memberships and post-graduate education.
- Open a 401K right away. To take full advantage of the power of compounding, contribute at least 2 percent of your salary when you're starting out, and gradually raise it to 10 percent or more.
- Create an emergency fund. Before beginning to attack debt (beginning with the highest-interest loans), build enough of an emergency fund to pay your bills for at least three months.
- Practice post-baby poverty. Before beginning a family, try to live on $1,000 less per month. This both gives you a reality check into the going rate for child care and helps you build up a stash to pay the estimated $40,000 you'll spend on a child in the first two years.
- Seek professional advice. Consult a financial advisor for guidance with insurance and eventual asset protection.
To learn more:
- read the article in U.S. News and World Report