New Attendings: Let’s Tackle Debt, Emergencies, and Taking Vacations

June 1, 2024

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.

Today, we’re diving into some crucial financial principles for our newest attending physicians. Hosted by Chad Chubb and Tyler Olson and in this episode, we pivot from the earlier stages of residency and fellowship to focus on your first year as an attending. We’ve split this discussion into two episodes to cover everything thoroughly. Let’s get started.

Watch this episode instead (Don’t forget to subscribe 🙏):

Listen to this episode instead (Once you love it (we know you will 😉), please leave us a review):

Apple

Spotify

Podcast Feed

Follow Us:

Physician Cents

🎥 Physician Cents

Chad Chubb

Tyler Olson

🚨 Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

Addressing New Attendings 🩺

Transitioning from training to attending status is an exciting yet challenging phase. The financial landscape changes dramatically, and it’s crucial to navigate this new territory wisely. On this podcast, we’ve discussed the pressures of matching and intern year. Now, we’re shifting to some vital topics relevant to you as a new attending physician.

With your new title comes a significant increase in income. It’s easy to get overwhelmed with making the right financial decisions. That’s where having a financial plan becomes important. Working with financial advisors can provide you guidance, but it’s also useful to have some basic principles in mind.

Financial Stress and Solutions

One common issue new attendings face is impostor syndrome. The new responsibilities can bring a heavy weight, and you don't want to compound that stress with financial worries. Focused financial planning is key to balancing your new salary and responsibilities. In today’s episode, we focus on three main areas: managing high-interest debt, building an emergency fund, and the significance of taking a vacation.

The Importance of Taking a Vacation ☀

Let’s talk about vacations first. - Yes, you're welcome! 

Significance of Breaks for Mental Health

Training is incredibly demanding. As you transition into your attending role, it’s essential to create a window of time for a break. This isn’t just about relaxing—it’s about maintaining your mental health. A vacation allows you to reset and come back to work rejuvenated.

Planning the Timing of the Vacation

It's crucial to plan your vacation well in advance. Ideally, around 18 months to a year before you finish your training. If you're wrapping up your residency on June 30th, aim to start your new job around August 1st to give yourself a month to relax and recharge. Adjust this timing based on your specific circumstances, such as studying for your boards.

Vacation Financial Planning

When planning your vacation, consider your budget. You don’t have to spend a fortune. Even a staycation where you slow down your pace and enjoy activities around your home can be incredibly beneficial. But do plan it and save for it well in advance. A vacation should be a part of your annual budget, no matter the phase of your career. Don't view it as a luxury, but a necessity for maintaining work-life balance.

Managing High-Interest Debt 💳

Managing high-interest debt is another crucial area. Many new attendings exit their training with significant amounts of credit card debt. Let’s break down how to manage and eliminate this debt effectively.

Typical Credit Card Debt Among New Attendings

It’s not rare to see attendings with debts ranging anywhere from $20,000 to $50,000 across multiple credit cards. This debt often accumulates due to the low salaries during training. If you’re dealing with this, you’re not alone, and there's a way out.

Strategies for Paying Off Debt

First, consider if you should refinance your debt to secure a lower interest rate. If you can, consolidating your debt could save you money in the long run. However, depending on how aggressive your repayment plan is, simply focusing on paying it off as quickly as possible might be more practical.

Example Scenario

Let’s say you have $20,000 in credit card debt and can save $3,000 a month from your new salary. At a 20% interest rate, you might think about refinancing. But if you can pay it off in about 7 months, it may not be worth the extra hassle. Keep it simple and focus on getting rid of the debt quickly.

Aggressive Debt Payoff

In our example, allocate most of your savings to debt repayment, but also carve out a small amount to slowly start building an emergency fund. Even if finance 101 suggests putting everything towards paying off the debt due to the high-interest rate, having a small emergency fund can offer peace of mind.

Emergency Fund Building 💰

Building an emergency fund is your financial safety net. We recommend starting small and aiming for bigger goals.

Initial Savings Goal

Initially, save $1,000 in a high-yield savings account. This serves as a basic buffer for minor emergencies.

Long-Term Goals

Your long-term goal should be to save three to six months' worth of expenses. This might take some time, but it's essential for financial stability.

Using Credit Cards vs. Emergency Fund

While credit cards can be a temporary emergency solution, they’re not ideal. Focus on establishing a proper emergency fund to avoid relying on expensive credit options.

Layered Emergency Fund Approach

We use a different system where we determine a "sleep number" that makes clients feel financially secure. For attendings, this usually sits around $20,000 as a minimum. From there, we build a layered approach, combining savings accounts and low-risk investments.

Additional Points on Emergency Funds

You need to adapt these goals based on your own circumstances. If you’re moving states or waiting for credentialing, you might face a delay in getting your first paycheck. This further emphasizes the importance of planning and having an emergency fund in place.

Considering Sign-On Bonuses and Additional Earnings 💸

Sign-on bonuses can be a great opportunity to immediately reduce your debt. Use these windfalls wisely to improve your financial health from the outset.

Conclusion

If you're a new attending, prioritizing your financial planning can set the stage for a successful career and a well-balanced life. From taking that much-needed vacation to managing debt and building an emergency fund, these initial steps are crucial. Remember, the first year sets the foundation for your financial habits, so make smart choices and stay organized.

Next time on the Physician Cents Podcast, we'll discuss investment strategies, necessary insurance types, and basic estate planning tips. Stay tuned for valuable insights to navigate your financial journey as an attending physician.

Until then, stay focused and keep planning for the future.

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 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.

Listen Now:

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.