The public generally doesn’t think doctors are financially stressed, but in many cases they are.
April is Financial Literacy Month, which is timely for many residents, doctors and other healthcare professionals who have struggled during the pandemic. Unfortunately, by the end of March, about $15 billion in novel coronavirus aid had not passed Congress, with the White House warning that inaction threatened to jeopardize the country’s ability to provide testing, therapies and vaccines. Alongside this overarching problem, the medical community also has other serious concerns.
The public generally doesn’t think doctors are financially stressed, but in many cases they are. The International Journal of Medical Education, in a study published last September, found that medical residents and fellows have low levels of financial literacy and high debt. Nearly 33% of respondents said they struggled to find funds for their monthly expenses, even though their median income was around the national average. The researchers concluded that education in budgeting, estate planning, investing, and retirement planning is essential to providing medical students (and physicians) with the ability to effectively manage their finances.
I alluded to the pandemic at the start, but the recommendations I made to customers at that time still stand. These tips can reduce anxiety and provide a justifiable sense of security.
Tip #1: Do a cash flow exercise. Review after-tax income from all areas and examine current expenses. It can be painful, but consider it a first step towards more peace of mind.
Tip #2: See what percentage of expenses can be reduced. Keep in mind that many people spend “side by side” or throughout the day, especially if they work in offices or even if they are part of the Zoom workforce. After a busy day at work, we order takeout but now that the Covid regulations change, we return to the restaurant. A cash flow statement might help you visualize where you could cut those expenses.
Tip #3: Set a time to deposit your savings into an account. If you save once a week or twice a month, you’ll be surprised how quickly the amount can grow.
Tip #4: Find a trusted advisor. Finally, ask your friends and family if they have a trusted advisor they work with who can help them prepare for these unprecedented times, as the impact of the pandemic has eased but the Inflation drives up the prices of many goods and services.
The points I have raised, of course, go beyond the needs of individual physicians. After going through a period of great stress, the medical community needs help and recognition of the underlying problem. As reported in Physicians Weekly at the end of 2021, a California Medical Association survey found that 64% of physicians expressed a need for financial assistance, 47% needed temporary housing, and 95% of medical practices said they were concerned about their financial well-being.
Ultimately, what we’re talking about is financial literacy, which has been my favorite subject throughout my career, leading me to write the Peter Saves series of books to help increase financial literacy among children. The book series helps children understand savings accounts, rainy day funds and life insurance. Not only the medical community, but many Americans, from all walks of life, can benefit immensely from their financial knowledge.
I wrote “The Peter Saves” series of books to start an educational movement to instill financial literacy in children. I know from experience that introducing the concepts of savings accounts, rainy day funds, and life insurance provides children with the building blocks of a solid understanding of finance. Inspired by my seven year old sonPeter saves for a rainy day is a great first step for any child to learn the basics of financial literacy. It sparked a passion in me to impact as many children as possible – and to help our larger medical community than ever before.
Rosanna Guardavaccaro is a financial planner based in Barnum Financial Group’s New York office. She can be contacted at [email protected] or by phone at 212-631-2061
Rosanna Guardavaccaro is a registered representative of and provides securities and investment advisory services through MML Investors Services, LLC. SIPC member www.SIPC.org 6 Corporate Drive, Shelton, CT 06484 (203) 513-6000. CRN202503-2121815