How To Prevent Broke Doctor Syndrome


By Jonathan Ford Hughes

Be honest. A big paycheck makes becoming a doctor awfully attractive. W. Ben Utley, a professional provider of financial advice for doctors, has some simple guidance: Don’t blow it.

He’s seen it all. New doctors who bought houses that were too big too soon. First-year physicians, fresh out of residency, who got blindsided with surprise tax bills. And ill-advised investments, like cryptocurrency.

Utley, a Certified Financial Planner (CFP) and President of Physician Family Financial Advisors, says when the cash starts coming in, put the plans for that new car on hold and instead take these 5 steps in the following order:

Determine Your Budget and Cash Flow

The cornerstone of any financial advice for doctors is budgeting, Utley says. Budgeting determines how much you can afford to save, and how much you can pay when servicing your student loan debts. It’s also a cold shower when you start lusting after the latest Tesla. Here are some budgeting apps to help get you started.

Build an Emergency Fund of One Month’s Pay

“Typically the first year of practice doesn’t work out the way they think it will,” Utley says of new doctors. It may involve a move. If they’re partnering with a doctor in private practice, the partnership might fall through. Maybe they’re faced with a costly auto repair, or some other unforeseen expense. “There’s room for problems to crop up, and those problems need to be addressed in cash.”

Deal with Your Student Loan Debt Load

Remember the thousands of dollars you borrowed to go to med school? So does the bank. Your debt didn’t just disappear.

One key piece of financial advice for doctors: You have options.

You may qualify for federal loan forgiveness. Consolidating or refinancing student loans is also an option. Utley says doctors must know the difference between the two. In a consolidation, all loans are combined, with the loan holder retaining most of their rights a debtor.

When refinancing, all loans are paid off by a single loan with a lower interest rate. “The question is, how much loan can you afford?” says Utley. Knowing your budget will answer this question, helping you select the duration of your new loan. A word of caution, refinancing comes with its own risks:

“The new loan has its own covenants and responsibility,” Utley says. “Typically, in that process, you lose the benefits that you might have under the federal direct loan program.”

Obtain Disability Insurance

Maybe it’s time to reconsider your passion for street luge. If you can’t work due to a disabling injury, then you have no income. “This is the fuel for your economic future,” Utley says. Generally, the more manually intensive the medicine a physician practices, the more expensive their insurance. You are not invincible. Safeguard your future, Utley says. Weigh your policy options carefully and be sure that it matches your specialty — whether you’re a surgeon with golden hands, or a psychiatrist with energetic patients.

Save for Retirement and Set Goals

Unless you’re into the idea of working till the day you die, it’s time to start thinking about investing and setting financial priorities. Investment strategies will vary, Utley says. A cardiologist making $400K will want to max out any available match on their 401k or 403b. A pediatrician working for a non-profit might want to skip their first year.

Utley breaks goal setting into three categories: saving for retirement, a house, or college for children. He’ll ask young physicians what their priority is.

“If you’re going to have a large income, you can have all three of these. But not all doctors have a large income.”


Take these steps in the following order: Create a budget. Build an emergency fund. Pay down your student loans. Get disability insurance. Plan for retirement and set financial goals (retirement, a house, paying your children’s college tuition).


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