How Personal Finance Affects Physician Health

Many of the distressed medical students, residents, and practicing physicians who make their way to us at Physician Health Services are contending with financial stresses and challenges that contribute — in a significant way — to their personal and professional difficulties. Here are six common pitfalls we’ve observed at PHS, along with some advice about how to avoid them.

1. Excessive debt. It is not uncommon these days for newly minted physicians to leave medical school with a debt burden in the range of $200,000 to $300,000. Debt of this magnitude can be crushing in the early stages of a career, with the downstream consequences lasting decades. Young people should consider educational options, such as excellent state medical schools, as well as employment options that offer potential loan repayment.

2. Following the money instead of the passion. Although some specialties are far more lucrative than others, it is important to pursue a career in medicine that is, in part, governed by what Sigmund Freud referred to as “the deep inner needs of our nature.” Going for the gold can often backfire, so beware.

3. Wanting to have it all. Life is all about tradeoffs. Maximizing one’s earnings may not square with spending quality time with one’s children, or with distinguishing oneself academically in a teaching hospital. Physicians who take on too much may be more susceptible to occupational stress and burnout than those who learn to pace themselves without reaching for the stars. Pay attention to the larger picture, especially your home life.

4. Not living within your means. Most financial planners will tell you that the expense side is as important as the revenue side of personal finance. Lavish primary residences, vacation homes, fancy cars, and private schools are luxuries, not necessities. A problematic expense item that comes up frequently involves physicians’ financial support of their adult children, which sometimes lasts into the fourth decade. Foster financial independence in your children from an early age. Ron Lieber’s book The Opposite of Spoiled is a must-read for every physician raising a family.

5. Assuming a long and lucrative career. The saddest physicians are those struck down by serious medical, psychiatric, or family problems in mid-career. Protect yourself and your family with adequate and competitively priced disability, long-term care, and life insurance policies.

6. Inadequate retirement planning. Aim to maximize your annual contributions to your retirement plan every year, and confer with wise domain experts to determine a balanced investment strategy that will allow your nest egg to grow. Many physicians think that we know more about investing than we actually do. Try your best to become financially literate. The National Assoc. of Personal Financial Advisors offers a how-to guide on its website, www.napfa.org.

In conclusion, managing your finances effectively throughout your career can be a source of joy, security, and well-being.

For more information, call Jessica Vautour, education and outreach director at Physician Health Services, at (781) 434-7404, or visit www.physicianhealth.org. –