The Importance of Financial Literacy for Physicians
When you have money, letting other people handle it for you is easy. However, your higher income often comes with substantial debt when you’re a physician, and understanding your financial literacy can help you accrue your wealth and eliminate your debt faster.
As crucial as financial education is to your overall wellness, it’s not something most people are taught. If you’ve been raised around people with a firm grasp on financial literacy, you’ve likely picked up some crucial nuggets of information. Otherwise, learning what to do and what not to do with your money is usually a “learn as you make mistakes” part of life.
However, when you’re dealing with money at the level of a doctor, mistakes can be quite costly. This guide shares the importance of financial literacy in your career and how you can learn from other people’s mistakes instead of your own.
You Can Never Be Too Educated
You’ve already gone through a decade or so of school, but continuing education is part of your career. Sliding in information about your finances can become a seamless part of this learning process.
Although your financial options might not be overly complex yet, the more you know, the better you can set goals and plan for retirement. For instance, learning about taxes and tax deferment can help you decide where to invest. Recognizing that those in your career are more open to lawsuits than the average person can change how you manage your money, shifting your focus to include asset protection for physicians, as discussed in this article by OJM Group.
Without an education on your finances, you rely on others to make these decisions for you, or you become a passive participant in where your money goes. Learning the nuances of financial health lets you make informed choices and actively decide the status of your money.
You’re Vulnerable to Trusting Others
You’re busy saving lives. We get it. There’s not a more impactful way to make a living than to help others in need. But that busyness leads you to delegate many of your responsibilities, including paying your bills and managing your money, to others.
There’s nothing wrong with this lifestyle. You’re an expert in medicine and healthcare, and others are experts in their jobs. Hiring a financial advisor, a medical billing specialist, an office manager, and an accountant to make your job easier is a common part of physician life, especially for those who own a practice.
However, if you don’t understand what you’re looking at when you review your finances and look at your accounts, you become vulnerable to those who do. It’s crucial to trust that the person you hire knows how to do their job — but not to give them carte blanche to handle your money without your educated oversight.
You May Overspend Your Way Into Debt
Physicians deserve to earn their high salaries, and you’ve worked hard for every penny in your bank account. Still, it’s easy to overspend if you’re not careful with your money.
Financial literacy ensures you recognize your income and expenses and predict how they will change over time. It helps you learn how to control your spending while enjoying a healthy quality of life and saving for emergencies and retirement.
When you understand where your money is going, it’s easier to pinpoint any problems and determine your strategies to solve them. If you haven’t started saving for retirement, you learn how to allocate your investments to reach your short- and long-term goals.
Wherever your debt and income situation is currently, learning more about financial literacy will help you understand how to improve it. But ignoring the problem and assuming you’re making a good income and can spend it is a quick way to overspend yourself into debt.
Conclusion
Financial literacy isn’t taught in med school but is a crucial part of your overall wellness. Money stress can lead to significant health issues, including heart attacks, depression, and burnout. Reach out to a financial advisor or mentor to learn more about taking control of your economic situation and maximizing your money today.