Welcome to this week's Future Proof post on Physician's Money Digest (PMD). A large proportion of FPMD readers are medical students, residents and fellows who are at various stages in the "tunnel". Here are what I consider the top 5 items on your financial checklist as a young professional to be better prepared for that bright light at the end. As usual, read the full post at PMD. An excerpt is provided below.
This post is inspired by a story a friend shared with me on 10 Financial Milestones Successful People Hit Before They Turn 30. While many of the milestones mentioned also apply to healthcare professionals, our unique career choice and the sacrifices we make demand a different set of priorities. Here are what I consider the 5 most important financial milestones for healthcare professionals to hit before they turn 30.
Develop a plan for your student debt - according to the AAMC, 81% of all 2015 medical school graduates owe education debt with a median value of $183,000. For many of us, our student debt is the largest liability in our young financial lives. While it is unlikely for a medical trainee to generate enough income to pay off such a substantial amount before age 30, you should have an idea of how you can pay it off in the future. Whether you are planning to refinance, enter a loan forgiveness program, standard repayment plan, income based repayment plan or any other payment option, it will serve you well to establish a plan.
Know your assets and liabilities - while your student debt may be your largest liability, we all have other obligations as well. Part of planning for the future is knowing where you are today. Luckily for us, both assets and liabilities are relatively easy to track: your assets are your income, your car, your house, computer etc. Your liabilities are your student loans, mortgage, car loan, credit card debt and any other bills. Do not be discouraged if your net worth comes out to a negative value - your student debt will likely overwhelmed all of your assets. If you don't feel like adding everything up manually, mint.com offers a free service for keeping track of all your financial accounts.
Read the rest at PMD, then come back here to share your thoughts and comments.