I hear about plenty of doctors graduating from med school with loads of student debt and little knowledge around personal finance. This is unfortunate, and a fault of the med school system, not your own.
Let’s start with your student debt. To help you, I have found three states that currently have student loan forgiveness programs.
Special Forgiveness Programs for Doctors by State
There is no national forgiveness program for doctors. But certain states do offer programs that are dependent on meeting certain qualifications. Currently, there are only three states with forgiveness programs unlike the state programs available for nurses.
New York: The Regents Physician Loan Forgiveness Award Program will award up to $10,000 each year for two years. You have to be licensed in New York State as well as have completed your residency within the past five years. The program focuses on primary care and within a specific area or underserved area. Another program is the Physician Loan Repayment – Qualified Educational Loan Repayment which can award up to $120,000, but you have to commit to working in an underserved region for a three-year term.
Washington: Washington’s Health Professional Loan Repayment Program (HPLRP) applies to healthcare professionals such as doctors, nurses, pharmacists and dentists. They have to provide primary care in an underserved or rural area. It will reward those that qualify up to $35,000 per year for two years.
Pennsylvania: A Pennsylvania program also applies to primary care practitioners who can receive up to $100,000 for full-time work within an underserved area for two years.
Have a Financial Plan
Now that you have an idea of where to start with your student debt, the last thing you should do financially is to buy your dream home straight out of med school. Just because you have a high salary doesn’t mean you should be purchasing or building a $600,000+ home. Just like everyone else, I encourage you to make a plan around your finances.
Build a Budget: I know you may make six figures but you still need a budget to at least get an idea of your daily expenses, debt payments and ability to build your savings.
Emergency Fund: As the saying goes “mo’ money, mo’ problems.” Everyone needs to be prepared for the unexpected. (For related reading, see: Why You Should Have an Emergency Fund.)
Debt Plan: Since 47 of the 50 states don’t have forgiveness programs, you need a plan to pay down your debt. Since most doctors have higher incomes it shouldn’t be too long before you can start living the high life.
Define Goals: What do you want to do? How many kids do you want to have? What’s your dream home (upscale loft, 1920s classic, custom-built lake house)? Do you have travel goals? When do you want to retire? Many doctors don’t save properly and end up having financial trouble when it’s time to retire.
Start investing: Every goal is different and will need a different investing strategy.
Start your career off on the right track and don’t end up a high-earning broke Millennial. Please don’t be one of the many Millennials earning six figures that live paycheck to paycheck and struggle with credit card debt. There is a better way that will improve all aspects of your life and create true freedom and wealth when you take responsibility and action around your finances. There are no excuses to not be financially fit. Our everyday choices impact our long-term wealth, freedom and success.
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