11 Best Financial Tips for Medical Fellows
Writing about the important financial aspects of fellowship is near and dear to my heart. Seeing as I, myself, recently graduated from pulmonary and critical care medicine fellowship, I spent 2019-2022 learning the ‘tricks of my trade.’ Deciding if fellowship is the right choice is the first step on this journey! In fact, I included it as one of the 12 Best Financial Tips for Interns and Residents…because it is an important decision both financially and professionally. Fellowship is not for everyone. It can be hard to approach residency graduation and see your peers signing six-figure contracts while you are choosing to be a ‘resident’ for a few more years. However, for those of you who did select to pursue fellowship, then this post is for you. Fellowship coincides with an important time in many individuals’ personal finances. So, here are the 11 best financial tips for medical fellows!
Table of Contents
1. Focus on acquiring all the skills necessary to be a subspecialist
Before we spend too much time focusing on the nuances of personal finances during fellowship, let’s first address the most important aspect…your training! Look, this may seem trivial of me to write, but I wouldn’t be able to publish this if I didn’t… focus first and foremost on your education.
Acquiring and developing the skills necessary to make you a specialist or subspecialist in your field is the most important part of the year(s) you will spend during your fellowship. This is obvious, but needs reiterating. I understand what it feels like to put your income potential on hold another few years to be a specialist. Like many medical and surgical subspecialties, there is often an income increase that comes with fellowship pursuits. However, it is difficult watching your peers leave residency and earn more than you with the same level of training…but you chose this!
Grit your teeth, keep your head down and focus on being the best you can be. Fellowship will be the last time you receive supervision as a practicing physician. After you graduate, like all your peers before you, you will be the responsible party. Don’t put your future in unnecessary jeopardy by only focusing on future earnings and not on the knowledge necessary to remain in that well-reimbursed role.
OK…with that out of the way, let us start to focus on the personal finance tips while you are completing your fellowship training.
2. Finalize your emergency fund (if you haven’t already)
By now, the concept of an emergency fund should not be new to you. If you are starting fellowship and this is the first time you have heard of this concept… then let this post be the motivation you need! An emergency fund is financial priority number one for you. Briefly, an emergency fund is approximately 3 to 6 months’ living expenses that you have in an easily accessible (liquid) account that you save only for emergency purposes.
In order to build an adequate emergency fund, you first need a transparent budget. I purposefully did not include ‘creating a budget’ as one of the financial tips because as a fellow, you should definitely have a budget by now. Since you do (wink wink)… then you should be able to easily calculate how much money you need to have stored aware ‘just in case.’ This should include literally every last penny you would need to live and not change your lifestyle for 3 to 6 months.
There is a reason this is (technically) the first financial tip on our list of the 11 best financial tips for medical fellows…because it is the most important. If you unexpectedly lose your fellowship, or your car is totaled, or your HVAC breaks, you need a pool of money accessible so that you can keep living your life. While in fellowship, finalize your emergency fund. If you want to learn more, check out our deep dive about emergency funds titled: Emergency Fund: Your First Financial Goal.
3. Review your financial plan
Tip number 3 on our list of the 11 best financial tips for medical fellows is to review your financial plan. If you haven’t already, here is How to Write a Financial Plan. As of fellowship, you should have a strong sense of direction when it comes to your short- and long-term financial goals. These are absolutely open for discussion and change, but you should be thinking about how you will maximize your hard-earned dollar.
For starters, how much will you be saving annually? How will you be investing your money? Will you be dabbling in real estate? Do you foresee yourself purchasing a home soon? Do you wish to pay off your debt as fast as possible? Are you going to pursue Public Student Loan Forgiveness (PSLF)? Think you can reach financial independence and retire early (FIRE)? All of these things and more should be addressed in your financial plan.
If you have already built a financial plan at an earlier point in training (i.e. during medical school or residency) then kudos to you! Fellowship is a great time to review your financial plan. Are you on track? Is there more that you should be doing as you complete the last leg of your formal training? Sit down, review your financial plan, and make sure it is finalized in preparation for the start of attending life.
4. Finalize your budget before your attending salary starts
OK, I lied. I did decide to include a financial tip about budgeting…but this one in particular is more nuanced than it seems. See, in my prior posts addressing the 11 best financial tips for premed and medical students as well as the 12 best financial tips for interns and residents, I focused on creating an honest and transparent budget. It is important to have a visualization of where your money is going month-to-month.
However, financial tip number 4 on our list of the 11 best financial tips for medical fellows is more particular. See, being in the final phase of your medical training before receiving your attending salary is a very important window of time. Soon, your income is going to (most likely) triple or quadruple (or more)! With that will come both the culmination of all your hard work over the past decade, and the temptation to spend it!
It is vital to your success that you finalize your budget while you are still a trainee! ‘Live like a resident,’ or ‘live below your means.’ Whatever you choose to call it doesn’t matter, it is the execution that is important. If you can find a budget that allows you to save money, invest, and afford your current lifestyle, keep that for a few years (3-5 years after training). This way, when your income increases, you do not feel compelled to expand your lifestyle to match your attending salary. Please, keep your fellowship budget for a few years after you start to make attending money so you can create solid financial footing and reinforce good financial habits. Your future self will thank you.
5. Finalize your loan repayment plan
Ok, what would be a ‘best financial tips’ post without addressing the biggest elephant in the room…debt. Most medical trainees have debt from medical school. If you are one of the lucky individuals who graduated medical school without debt, then by all means, jump to financial tip number 6 and skip this one. However, if you have medical student loans like so many other medical fellows, now is the time to make sure you are executing your debt elimination plan.
Take the time during fellowship to explore all the options available to you and then start to enact your plan during training. No matter what, life will continue to get busier and more expensive after you graduate fellowship, I promise. You will want to own a home, likely start a family (if you haven’t already), and your grace period will end on your debt and larger monthly payments will begin. Figure out how you plan to navigate this now.
If you are pursuing PSLF, then make sure you know what your payments will be once you are no longer a trainee. Instead, if you are planning to refinance your loans (or already have), call up your lender and determine when your grace period ends and what your payments will be at that time. If you have been making large payments towards your loans during training, ask for a re-amortization of your loans to see if it will lower your monthly payments. No matter what you do, use the final portion of your training to solidify your loan repayment plan. That way this portion of your financial plan can be on autopilot after you graduate.
6. Moonlight (if you can)
Moonlighting is a great way to supplement your income while you are in fellowship. I was not allowed to moonlight while I was in residency. When this option became available to me during fellowship, I threw myself at it. I was astounded that I could double my fellowship salary just by working two 12-hour moonlighting shifts a month. Not only was this life-changing money, but it allowed me to utilize my internal medicine training too.
To anyone who is given the option of moonlighting, I think it should be seriously considered. In our current era of physician burnout, it can be a tough sell to ask individuals who already feel stretched so thin to work more. There are upsides to moonlighting however. Some gigs are relatively laid back, and pay well for minimal work. Secondly, moonlighting allows trainees to practice with more autonomy. It can be anxiety provoking to practice without supervision. The sooner you rip the band-aid off, the better. Get your feet wet and start relying on yourself to make decisions and care for patients. The money is icing on the cake!
Lastly, I will add that if you are motivated to destroy your debt as fast as possible, moonlighting is a great way to make dents in your balance. I would moonlight between 2-4 times a month, and (generally) every dollar was put towards my loans. This allowed me to keep our families current budget while still putting between $4000-$6000 extra towards my loans every month. Not too bad!
7. Apply for multiple jobs
As you begin to gain financial footing, make sure that you understand the opportunities that await you. Personally, by spending the majority of our early careers in training and academia, it can feel comfortable to stay put. Join the faculty who trained you, remain in academics, and make the transition after fellowship an easy one. Actually, I did just that and I wrote about the pros and cons of academic medicine too! However, this is not necessarily the best decision for everyone.
As you begin the job hunt, do yourself a favor and apply for multiple positions. Take the time to go and interview at various locations with various employment models. Private practice, academics, hybrid models, etc. Only by exposing yourself to these opportunities can you truly understand your worth. This can also be a great time to understand the interplay between reimbursement and work-life balance. Yes, some positions will pay you astronomical amounts of money, but these may simultaneously occupy a majority of your time. On the other hand, maybe you are willing to accept less income for a better quality of life. All of this will hinge on what is important to you. But you can only know how to best navigate these questions if you understand what opportunities are available. Cast a big net and take every interview you get!
8. Understand the cost of location
Tip number 8 on our list of the 11 best financial tips for medical fellows has also made all the other ‘best financial tips for trainees’ list. Cost of living can make or break a budget. For this reason, I have included it again here.
For starters, your subspecialty services will be needed all across the country, that is almost guaranteed. This will make you valuable and offer you the chance to take your talents (likely) wherever you choose. If you wish, you can use this opportunity to explore areas that simultaneously offer a great place to practice while also lessening your financial burden. Geographic location can really have substantial effects on your finances.
Cost of living means that there will be variability with many standard living expenses based on your location. For this reason, I constantly advocate that you apply to multiple jobs (i.e., financial tip #7) and that you go out of your way to ask about the cost of living during your interview. This is a reasonable question. Look, doctors hoping to maximize their money by strategically practicing in a location that has a lower cost of living can really boost their earnings. Couple this with the high income you are bound to generate and you will start life post-training on sound financial footing.
9. Hire a contract negotiator
Tip number 9 on our list of the 11 best financial tips for medical fellows is another that makes more than one list. Hiring a professional to advocate for your wants and needs can prove quite important. For fellows, this tip remains applicable to you all. As you begin the interview process, you will start to understand your worth. It will be somewhat jarring to see what certain hospitals or practices are willing to pay you for your time and expertise. Each and every dollar they are willing to offer you is the culmination of your hard work and dedication, make sure you milk it for all it is worth!
However, as altruistic and compassionate physicians, our negotiation skills can be…lacking. Why not hire an individual who does this day in and day out! Contract negotiators can help you navigate reimbursement, moving expenses, signing bonuses, cost of living adjustments (see above), weekend coverage, call schedule, etc. These may all seem like monetary issues, but many of these will also optimize your quality of life as well. The cost of a contract negotiator is well worth the money if it affords you better wages and a better work-life balance.
10. If you haven’t gotten disability and (term) life insurance yet, do it now!
If I have said this once, I have likely said it a thousand times. Please get your term life insurance and (long-term) disability insurance before you graduate! This is incredibly important. There is a reason so many individuals, physicians, and insurance agents advocate for this. First, you will never be as young and as healthy as you are now. Yes, I understand that there are exceptions to his rule, but age will undoubtedly bring more issues. Often with disability and/or life insurance, there will be a comprehensive physical and screening blood work. Completing this process as early as possible (especially in residency) helps you demonstrate to the insurance provider that you are healthy and your premiums should be low.
Secondly, if you are able to get disability and life insurance during training, you can lock in much lower rates. There are nuances to these contracts (i.e., getting ‘own-occupation’ disability insurance as well as various particular riders that allow you to increase your disability coverage as your income rises), so make sure you have a great insurance agent looking out for you. Depending on the terminology in your contract, these riders and coverage increases can be obtained later or modified without repeat physicals, blood work, etc. So please, do yourself a favor and do not complete fellowship without disability or life insurance. Honestly, this really should be completed during residency, but it is never too late!
Disclaimer: I generally recommend you avoid whole life insurance. Whole life insurance is complicated and couples investments with your life insurance coverage. This interweaving causes conflicts of interest. Personally, I recommend term life insurance. If you want to know more, here are a few helpful posts:
11. Cultivate skills to prevent burnout
As I approach the end of this series on the ‘best financial tips’ for each stage of medical training, I have always commented on burnout. I remain unsure if burnout is a new phenomenon plaguing our profession, or if it has always been present, only receiving more focus. Whatever the case, it is real, and it will manifest differently for each and every one of us.
As you continue onward through your medical career, inevitably you will face new challenges. These challenges may be an overwhelming career. Maybe these struggles manifest as health concerns for you or your loved ones. Perhaps your children require more of your attention than anticipated, or you find difficulty conceiving children in the first place. No matter what life throws your way, cultivating skills that help you cope with physical, mental, and emotional stressors can (literally) save you tens of thousands of dollars (if not more)!
In a post-COVID world, our profession is seeing incredibly high rates of burnout. Physicians and other healthcare workers alike are leaving the profession in droves. This, unfortunately, coincides with the baby boomer generation reaching retirement age and becoming more reliant on healthcare. I do not see the stresses of modern healthcare going away… That is why it is important for individuals in healthcare to learn the skills necessary to combat burnout.
Take home points
This post marks the third of four planned posts in our ‘best financial tips for trainees’ series. The only one that remains is new attending ‘tips.’ I have enjoyed writing this series as it has allowed me to reflect on my own financial journey. I have definitely made mistakes and learned a lot along the way. There is oddly a sense of therapy in writing about my past and hoping that some of you will be able to learn from my mistakes. This particular post on fellowship hits home as I just recently graduated from pulmonary and critical care fellowship. Fellowship (for me) marked the transition from linear to exponential growth regarding salary, as well as financial goal achievement. If you can exit fellowship with your financial affairs in order, then you will afford yourself an easy transition into a long and prosperous career! As always…
Stay motivated!
The Motivated M.D.
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