In my financial advisory practice, I focus on resident physicians and young entrepreneurs. In fact, when I open my own fee-only RIA, the firm will focus even more on just serving those two occupations. I say that to make clear that I have a special interest in focusing on 2 occupations so that I can dig deeper than a general financial adviser. And having served these clients, I have learned a few things that are worth mentioning.
1) It is much easier to begin working from a budget while in med school or the beginning of residency. This is probably because when you make less, there is much less margin for error and the benefits of budgeting are more apparent. It feels good to work off the budget and know you can begin whittling away student loans while affording some niceties in life.
Working off a budget before you reach the larger paydays of working as an "attending" physician also has the added benefit of building good habits. So when you become an attending your allocation amounts ramp up within the budget.
2) You have invested heavily in your education. It makes serious sense to buy disability insurance to protect your earning potential going forward. If you have a dependent spouse or kids, it makes some sense to look into term life insurance. You know what insurance does. It protects in case of disaster. Disaster happens all the time.
3) Keep an emergency savings account to cover your expenses for 6 months. This amount of time varies based on the adviser, but we tend to air on the side of caution.
4) Resist the urge to make a huge purchase that first 6-12 months of attending salary. Purchases still need to be thought out and fall within your long term plan.
5) Resident physicians need to realize that while they will make much more than most other careers PER YEAR, they also face a shorter saving window (thanks to lots of school and residency years) and higher tax rates. So there may be even more need for working off a budget.
Founder of a fee-only, ethical investing firm. We specialize in assisting millennials tired of traditional financial advisers.