Financial fitness for physicians

In an economic environment filled with headlines of major policy shifts, student loan reform and healthcare reimbursement changes, it’s easy to feel like your financial plan needs a constant overhaul and important to be knowledgable about financial plans for physicians.

For physicians, the question isn’t if the economic and legislative winds will shift; they most certainly will. The question is if and how much those shifts should influence your personal financial strategy. Let’s break it down.

Understand what shouldn’t change about financial plans for physicians

Regardless of who is in office and how policy is changing, the following financial principles never go out of style:

Spend less than you make. Living below our means and spending less than we make is the one sure way to build wealth and financial security. 

Automate savings and investing. Consistent investing will remain a long-term win, especially in tax advantaged accounts such as retirement accounts and HSAs. Consistency is increased when saving and investing are automated, especially for busy physicians.

Protect the downside. Having adequate protections in place in case of calamity such as a three- to six-month emergency fund, disability insurance and life insurance will remain important components of the umbrella of protection for our families no matter who is in office.

Make debt decisions deliberately. Whether you’re paying off debt or counting on debt forgiveness, the best plan is one that aligns with your values, goals, risk tolerance, lifestyle and career trajectory. 

Understand what might change about financial plans for physicians

Economic and policy trends can warrant updates to your financial plan in a measured and deliberate way—not in panicked overhauls. Here are times when it may make sense to pivot:

Student loan policy shifts. Student loan management is an area greatly affected by varying ideologies. If you have student loans, it is important to pay attention to proposed changes and their potential effect on your forgiveness timeline. 

Tax code changes. Understand and review tax code changes with your accountant or financial advisor to maximize tax efficiency.

New opportunities. Recent legislation and Congressional bills clarify that direct primary care arrangements are not health insurance, thus allowing DPC participants to contribute to HSAs without risk of audit or penalty. If passed, this legislation could help make DPC more attractive to patients and physicians. Recognizing opportunities in new legislation can be an opportunity for financial growth. 

How to stay centered

Having a personal Investor Policy Statement helps ward off fear and panic-based decisions. Think of the Investor Policy Statement as a personal constitution that outlines your risk tolerance and goals. Lean on your statement during times of panic and only modify it periodically with your entire financial team, keeping the long view in mind.

The physician advantage: Stability and margin

Despite chaos, market turmoil and changing legislation, healthcare workers have unique advantages. We have relatively stable, high income, in-demand jobs. A high paycheck paired with a high savings rate can help weather many storms. Changing legislative landscapes can also provide opportunities for entrepreneurship. Keep these advantages in mind as you read the headlines. 

Stay the course, but stay informed about financial plans for physicians

New proposals also create opportunities for advocacy. As a subject-matter expert, your opinion matters, and your voice is important to lawmakers. Be sure to contact your legislators about topics that matter to you and your patients. 

Economic and policy changes will come and go. Your financial plan should be flexible enough to adapt, but strong enough not to break under every new headline. •