Common Financial Mistakes New Doctors Should Avoid

Transitioning from medical school to the actual medical practice is a milestone filled with new responsibilities—including managing your increasing earnings. As a new doctor, your financial potential is a powerful asset, but it can also lead to financial missteps if not handled in the right way. Let’s explore some common mistakes new medics make and what you can do to avoid them


Wooden blocks with the text “Mistakes to Avoid” placed on top of a tax form, accompanied by a pencil and a sharpener.


1. Delaying Financial Plannin

Many new doctors postpone creating a financial plan, assuming they’ll have time for this later. However, failing to plan soon enough can lead to missed opportunities, like building wealth through compound interest or optimizing student loan repayment strategies.

The Fix: Set clear financial goals as early as possible. Whether it’s paying off debt, saving for a house, or planning for retirement, a financial plan provides clarity and direction.


2. Ignoring Student Loan Repayment Strategies


Medical school loans are often overwhelming, with interest increasing fast during residency. Many new medical professionals stick with standard repayment plans without considering alternatives that might suit their financial situation better.

The Fix: Look for some other options like loan consolidation, refinancing, or income-driven repayment plans. Depending on your career path, public service loan forgiveness might be helpful for you as well.


 Person writing in a notebook at a desk with a keyboard, calculator, glasses, and financial charts, conveying a work or financial planning setup.


3. Overcommitting to Lifestyle Upgrades


After years of student life, it’s natural to want to upgrade your lifestyle. However, diving into big purchases—like a luxury car or a large house—can quickly lead to financial stress.

The Fix: Stick to a modest lifestyle in the beginning of your medical practice. Build your emergency fund and tackle high-interest debt before committing to significant expenses.


4. Underestimating the Importance of Insurance


Some medical professionals might overlook the importance of disability and life insurance while starting their careers, assuming their good health and medical knowledge will protect them. However, getting older and older or unforeseen circumstances can quickly wreck your financial stability.

The Fix: Secure comprehensive disability insurance and consider term life insurance, especially if you have family. This protects your income and secures your finances if any emergency occurs.


Health insurance forms on a desk with a stethoscope and pen, symbolizing medical and insurance documentation.


5. Neglecting Retirement Savings


Retirement might seem really far away, but waiting too long to contribute to retirement accounts can mean missing out on years and years of compound growth.

The Fix: Start contributing to retirement accounts early on. If your employer offers a 401(k) with a match, prioritize that. What’s more, take into account other options, like a Roth IRA, to diversify your retirement savings.


6. Overlooking Tax Planning


As high-income earners, who often manage side hustles as well, medics often face  very complex tax situations. Failing to optimize your taxes can lead to overpayments or missed deductions.

The Fix: Work with a tax advisor who understands physicians’ unique needs. They can help you maximize deductions, plan for quarterly payments, and ensure compliance while saving money.


7. Not Consulting a Financial Advisor


Many doctors attempt to manage their finances on their own, which can be very hard given their demanding schedules and lack of financial expertise.

The Fix: Partner with a trusted financial advisor who specializes in working with physicians. They can guide you through budgeting, investing, and long-term wealth-building strategies.


Two men sitting at a table talking over documents with an open laptop. One of them is taking notes, the other is explaining something to him. There is also a glass of water with lemon and a tablet on the table.


8. Not Choosing the Right Banking Options


The last bust also important common mistake is not leveraging banking tools and services designed specifically for doctors. Generic financial institutions might not get the unique challenges doctors face, such as managing student loans, irregular income during residency, or planning for higher earnings later. For insights on how tailored banking solutions can support long-term success, read our article here!

The fix: Take into account financial apps and services made specially for medical professionals, like Salve. We are a neo-bank custom built for doctors, we do offer banking solutions designed with physicians in mind, making it way easier to manage your finances well while focusing on developing your career.


Taking care of your finances as a new medical professional doesn’t have to be complicated or stressful. By avoiding common mistakes listed in this article, you can build a stable financial foundation for the future. Remember, your hard work has earned you the potential for a prosperous life—make it count by taking control of your money today.

If you’re looking for tools and resources to simplify your financial journey, Salve is here to help!

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