Hospitalists setting out on their careers are used to life as struggling students. Once they start earning a sizeable salary, they’re hit with some tough choices: How fast should they pay off medical school loans? Can they afford to give in to the temptation of an expensive reward? How much savings do they really need?
“It is a bit of a shock to start your first job as an attending physician,” says Margaret C. Fang, MD, MPH, assistant adjunct professor of medicine at the University of California Hospital Medicine Group. “Your bank account seems to grow so much faster!” No matter how big that account may seem, it can dwindle away every month if you don’t practice good money management skills.
Sameer Badlani, MD, hospitalist and instructor at the University of Chicago, is faculty advisor to a medical student interest group at his university called Money and Medicine. “It’s all about delayed gratification,” he says of the effect a physician’s salary has on a new hospitalist. “I say, just wait one year in your new job to see what your expenses are before you buy that big house or that expensive convertible.”
Do Your Research
Residents and early career hospitalists—and anyone who is having trouble saving some salary—would do well to tackle the subject of money management as if it were a clinical course. “What you do with your money deserves a lot of attention,” Dr. Fang says. “Vigilance about finances is important, but many physicians are not as prepared to deal with money management as they are to care for patients.”
When you’re about to start a job, find out the financial options before you’re faced with a mountain of forms and a heap of decisions. “When I started here, I had all this paperwork: I had to sign up for health insurance, disability, long-term disability, 401(k) and 403(b) plans, and more. It’s really daunting,” Dr. Fang says. “A little upfront research is important, so you can make good decisions about these things.”
When it comes to figuring out how much to contribute to retirement accounts, savings accounts and investments, consider enlisting some outside help. “Many institutions that hire young hospitalists offer financial counseling,” Dr. Fang points out. “I’ve done a lot of independent reading. But if your finances are more challenging—say you’re carrying a lot of debt—it’s reasonable to work with a financial consultant.”
Deal with Debt
Before you start investing your money, take a look at your debt. What to do with it—for instance, should you pay off all of your loans and bills—will be one of the most important decisions a new hospitalist will make.