Recently, I was asked to be on a great podcast created by medical students for medical students called The Premed Scene. They were running a Money Management special for their podcast which was when they interviewed me. I had a great time and it really made me focus on think about money management tips for medical students.
And I want to share my top 5 money management tips for medical students!
Top 5 money management tips for medical students
Here we go!
1. Minimize debt
In medical school, you are not in the money making part of your life.
Instead, you are most likely in the debt accumulation phase of your life.
Even if you have scholarships or family helping defray or pay from medical school, you still are not making money. So, even at best, you are in a money neutral phase.
So, the goal becomes to minimize the amount that you put yourself in the negative, financially speaking.
You will need to use the money from your loans to pay for school, live and eat, etc. There’s nothing you can do about that.
But you can minimize the amount of discretionary money you spend. There will be a time in your life for extravagant vacations and meals and toys. But as a medical student, that time is not now.
Every $1 you send of your loans now will increase exponentially by the time you are paying it off.
So think of that $100 meal out as the $800 it will become by the time you pay it off. And maybe eat at home this time…
2. Start learning about personal finance philosophy
Increased your financial education early is maybe the best thing that you can do.
But I would encourage you to learn about the philosophy of personal finance as a medical student rather than the nuts and bolts of investing.
Read books like The Millionaire Next Door and The Richest Man in Babylon.
These books will teach you that being wealthy is not equivalent to having the fanciest car in the doctors’ parking lot or the biggest house on the block.
You will learn to cultivate the habits of saving, spending intentionally, and investing that will serve you well thiguhout your career.
3. Avoid investing gimmicks
People, including fellow medical students, will probably come to you talking about get rich quick investing schemes like investing in cryptocurrency or day trading stocks.
For every person that has hit it big with these investments, there are so many hundreds more who have lost big.
These “investments” are really just bets. And betting or speculating is not investing.
You can’t afford to get caught up in these gimmicks when you are actually making money, let alone when you are accumulating already huge amounts of debt.
The 3 Most Tempting Current Investments to Avoid
4. Build a budget
People hate budgets.
But I don’t. I consider my budget to be a treasure map. If I follow up, I know that I can save money and invest money and reach financial freedom.
The earlier you build this habit, the better.
Start now when your expenses are low. Learn to track your expenses and be mindful of your monthly ins and outs.
Then, when you start making money, you will have the discipline to keep up this habit and build wealth!
You can download and use my budget template for free here.
5. Pick the right specialty
Probably the single biggest decision you will make in medical school is what field of medicine you choose to go into.
Here’s my financial advice for picking your speciality: follow your passion.
Not what you expected maybe?
I’m serious. Follow your passion. As a doctor, you are going to be making a lot of money regardless of specialty. Even family physicians and pediatricians make a lot of money. And with sound financial habits and strategies, you will be able to achieve financial freedom no matter what you choose.
But, if you choose a specialty for the “wrong reasons,” no amount of money will make up for you not enjoying what you do. That is a recipe for burnout.
And last, it’s important to realize that the “intra-specialty” range of incomes is much wider than the “inter-specialty” income range
This means that the income range among internal medicine docs is much wider than the range between internal medicine and plastic surgery.
This post contains an in depth analysis of these physician income trends.
So, follow what you love and the money can follow. The reverse is not really true. No amount of money will make you love something that just doesn’t fit with you.
You can make a big difference in your personal finance as a medical student
It doesn’t seem that way. But it’s true.
Follow these money management tips as well as these other simple finance habits and you will set yourself up to be finally independent as a doctor.
And remember, the best day to start was yesterday. But the next best day is today.
I didn’t do any of this as a medical student. I didn’t even do it as a resident. In fact, I started in a worse financial hole than anyone else that I have met.
So, no matter your situation, you can be successful too!
In this podcast, we also talk about:
- The path to becoming a plastic surgeon
- Passive income
- Real estate investing
- And more!
What do you think? What money management tips do you have for medical students? Have you tried any of these? Let me know in the comments below!