This article may contain references to products or services from one or more of our advertisers or partners. We may receive compensation when you click on links to those products or services. Nonetheless, our opinions are our own.
You might have heard top financial influencers talk about the importance of saving and investing money once you start medical residency. Some even recommend living below your means so you can save enough to secure your golden years of retirement.
Does saving money in your 20s sound like throwing your life away? If so, you are not alone in this sentiment.
As a young physician, you want to spend every dollar you make and enjoy your life to the fullest.
But there are a couple of downsides to living paycheck to paycheck.
- You might not have enough money in your bank account for a rainy day
- You may have to work beyond your retirement years in order to pay your bills and medical expenses
To avoid any of the above situations, here are a few money-saving tips young physicians like you will find useful.
Occasional Penny-Pinching Won’t Hurt
A penny saved is a penny earned. When you apply this philosophy in every area of life, those pennies can add up to dollars. Here are some of the easiest ways to do that.
#1 If you live in a rented apartment, find a roommate you can split the rent and bills with. It’d be a great idea to approach a college friend, a colleague or your friendly next-door neighbor.
#2 An average American throws away 25% of the food they cook or buy. If you cook for yourself, repurpose the leftover food for brown bag lunches or use it for snacking between meals.
#3 Do not strain your AC/heating system. If it’s cold, wear thermals or keep a small blanket handy instead of turning up the heat. You will be shocked to see how much money you can save in energy bills every month.
#4 Using high-end cleaning and laundry supplies can cost you a fortune in the long run. Instead, use a mix of warm water, bleach and vinegar to clean all kinds of hard surfaces around the house.
#5 Sell the stuff you no longer need by setting up a garage sale or creating free online listings. Doing so will not only declutter your space, but will also recover some amount that you spent on things you didn’t need in the first place.
Refinance your debt
Whether it’s a student loan, credit card debt or car loan, refinancing can help you save a lot of money. If your new lender manages to knock just 1% off your interest rate, you can potentially save thousands of dollars in the long run.
Most physicians refinance medical school loans the moment they graduate and get a job. There are several benefits to doing so. Refinancing can open up various possibilities for more convenient repayments or loan forgiveness options. Plus, you could get better interest rates and use the savings to invest for the future.
Don’t splurge on a brand new car
It may be tempting for you to buy a new car, but that would be a mistake, considering you have a student loan, bills to pay, or perhaps a family to support.
Since buying a car is indispensable to your job, your best bet would be a used mid-size sedan that is not older than 4 years.
A well-maintained 4-year-old used car (preferably a Toyota or Honda) can save you thousands of dollars in upfront cost and insurance charges.
Conclusion
Saving doesn’t mean you shouldn’t enjoy your life. Follow the 50/30/20 rule to strike the perfect balance between maintaining a decent lifestyle while saving for your future. The rule states that:
- 50% of your income should go towards bills, rent and food.
- 30% towards your lifestyle expenses.
- And 20% towards saving.
We hope this article encourages you to make positive decisions around your spending, saving and investing decisions.
Reviewed and edited by Albert Fang
Did you like our article and find it insightful? We encourage sharing the article link with family and friends to benefit as well - better yet, sharing on social media. Thank you for the support! 🍉
Article Title: Money-Saving Tips for Young Physicians
https://fangwallet.com/2022/04/27/money-saving-tips-for-young-physicians/
The FangWallet Promise
FangWallet is an editorially independent resource - founded on breaking down challenging financial concepts for anyone to understand since 2014. While we adhere to editorial integrity, note that this post may contain references to products from our partners.
The FangWallet promise is always to have your best interest in mind and be transparent and honest about the financial picture.
Become an Insider
Editorial Disclaimer: The editorial content on this page is not provided by any of the companies mentioned. The opinions expressed here are the author's alone.
The content of this website is for informational purposes only and does not represent investment advice, or an offer or solicitation to buy or sell any security, investment, or product. Investors are encouraged to do their own due diligence, and, if necessary, consult professional advising before making any investment decisions. Investing involves a high degree of risk, and financial losses may occur including the potential loss of principal.