In 2020, primary care physicians earned an average of $243,000 while specialists earned $346,000, according to Medscape’s Physician Compensation Report 2020. These numbers were a lot bigger than in previous years, which means that doctors are earning more, especially since there is a huge demand for their service due to the pandemic.
But it’s also no secret that a lot of doctors are still struggling financially not only because of their medical school debt but also because of poor money management skills. So, it’s very important for you as a doctor to learn how to take care of your finances just as you would take care of your patients.
Get a clear picture of your finances.
The first step to being smarter about money is to educate yourself about it. To get a clear picture of your finances, you have to know how much you’re earning and how much you’re spending every month.
Keep track of the money that comes in from your different sources of income like consultations, professional fees, clinic operations, and other services. Then, compare this number with how much you’re spending, especially when running your clinic such as utilities, rent, etc.
This will help you determine where you’re overspending so you can make the necessary adjustments. It also allows you to allocate your money well so you are only spending on things that can help improve your practice.
Create a feasible budget plan.
You hear this a lot, but budgeting is key to staying on top of your finances. Investopedia defines a budget as “an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis.”
After comparing your revenues against your expenses, it would be easier for you to create a realistic budget that covers all of your basic expenses and savings. If you have any debts to pay, include them in your budget so you don’t spend money on penalties and bank charges.
It’s also important to build an emergency fund and always keep your personal finances separate from that of your business to avoid confusion and overlap.
Invest your money wisely.
It’s true when they say that you shouldn’t put all your eggs in one basket. As a doctor, there will be good and bad days for your business, but your expenses will not stop just because you’re not earning a lot in a month.
A lot of doctors have put their money on investments that allow them to live comfortably, run their operations continuously, and still have enough money for retirement. It could be stocks, managed funds, or an IRA plan.
Learning the ropes of investing will allow you to put your money where it can grow.
As a doctor, it’s essential to take advantage of the opportunities that are ahead of you, so that you can enjoy the fruits of your labor later on. Good financial management is the first step to plan a bright future not only for yourself but also for the members of your team.
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