This applies not only to residents who need to learn to live on their limited salary instead of taking on additional lifestyle loans, but especially to brand-new attendings.
The solution to the many financial dilemmas that physicians face resides in the choices they make in their first five years out of training. If they can just avoid growing into their attending salary (or beyond) all at once, then there is plenty of money available to pay off loans, purchase a nice home and catch up to their college roommates with regards to retirement savings.
Physicians who have been living off $40,000 per year who now have a $200,000 salary can live off $80,000 and easily cover the additional taxes, student loan payments, insurance expenses, and still carve out plenty of money to build wealth while living a significantly increased lifestyle.
But if they immediately upgrade their lifestyle to $150,000 a year, they’ll feel like they are living paycheck to paycheck the rest of their lives. The secret to a comfortable life lies on the spending side of the equation.
March 1, 2010
Deborah Walker Keegan, PHD and Elizabeth W. Woodcock, MBA, CPA
