Despite the stereotype, being a physician doesn’t guarantee financial wellbeing. Truth is, many physicians struggle financially, as doctors are like most people when it comes to money. In fact, many physicians aren’t disciplined financially and are lacking both financial literacy and foresight. Add to that today’s uncertain times, which is likely to saddle more physicians in financial trouble. Fortunately, this is an avoidable burden with the help of this financial success guide.

Live like a resident and budget

For those physicians who are struggling financially, it may be best to go back to their resident days and practice strict budgeting. This will help show them where their funds are going. They can start by listing down all their monthly expenses and then identifying the unnecessary ones that can be eliminated. Then, whatever is saved can be funneled into savings and investing options (see below). The most efficient way to budget is to use an online budgeting tool, like Mint or Personal Capital. These allow users to immediately enter any expenses and have them recorded, which in turn helps the user better track where their money is going.

Related Article: Can Telemedicine Increase Practice Profitability?

Take advantage of retirement plans and savings accounts

MainLine Private Wealth’s Gary Droz rues that physicians often overlook saving properly. This is a grave mistake that can lead to much financial strain down the road. The solution? Save as much as possible — and as soon as possible. An easy and convenient way to do this is through a qualified retirement plan that most health systems will offer, such as a 401k or a pension plan. Those in large health systems must leverage the often generous qualified plans these systems provide. Aside from those options, physicians should also open their own savings account, preferably one that is high-yield or high-interest, to reap the most benefits. As a baseline, it is recommended to save at least 10–15% of one’s income, though that’s just a general guideline.

Start investing

Due to the nature of the job a side hustle that requires active engagement is likely out of the question. Therefore creating a passive income is the best option to earn money on the side and physicians can do that by investing. A popular option is trading in the stock market, with this environment seen as ideal for physicians as they have right mindset due to their composure and ability to make split-second decisions. Having said that, trading stocks won’t appeal to everyone, especially given the time commitment it will take. In this case, an alternative would be to build a Certificate of Deposit (CD) ladder, which is seen as a tactical way of boosting one’s savings. Put simply, think of it as growing time deposits across multiple high-interest accounts or CDs that mature one at a time at specific intervals, allowing the owner to access the amount deposited plus the interest it earned. This setup allows for short-, immediate-, and long-term investing making it ideal for those who with busy lives. The main benefit of this is that the investors’ money is spread out compared to putting it in one savings account, increasing the chance of revenue. This is why it is considered a tactical way to save.

Get professional advice

All told, it’s getting increasingly hard for physicians to be financially healthy, especially with the challenges they are facing this 2020 and beyond. Notably, there is now increased competition, with the proliferation of online physician directories likely to affect physicians’ bottom line adversely. Given these challenges, physicians ought to ask expert help from financial professionals, who are best equipped to dispense advice on how to navigate today’s financial landscape. Although it may seem like an unnecessary investment, it could save a lot of money in the long term.

As this guide shows, there are many options open to physicians who may struggle with their finances. If they are organized and plan ahead, or are smart with their investments, there is no reason why a physician cannot achieve financial success.