The 4 Financial Stages of Physicians

financial stages of physicians

As a medical student, you are thrilled to start your residency to put your four years of studying and clinical rotations to the test. Now the time has come to begin earning a paycheck. This is the beginning of the financial stages of physicians.

As an attending who has transitioned into practice, you may be stressed, wondering if you are on track to meet your financial goals. You are asking yourself, colleagues, or family how to organize your finances and what you should do with your money.
You may not realize it, but you have already been making financial decisions all along. It is important to articulate your short-term and long-term goals, so you don’t look back in few years and wish you had made a plan sooner. Practicing physicians go from $55,000 annually in residency to $200,000-$400,000 annually as an attending. Quite a big jump, right?

The truth is, more money doesn’t make planning any easier. The more money you are making, the more “big ticket” items you can buy, along with larger loan sizes lenders will offer you.

What you are rapidly discovering is the financial stages in the life of a physician from medical school to grandchildren.

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Those four exciting years of undergrad and freedom from home quickly come to an end. You find yourself going through another four years of medical school where you may have a few hours a week for a part-time retail or serving job, or an unpaid internship. Even better for your bank account!

When residency begins, you finally have an income. Unfortunately, it’s not a significant amount and additional student loans, along with credit cards, can bring stress.

Protection is typically the theme of this stage for physicians, to position yourself for success post-residency. You may have different goals depending on your family or relationship status. Either way, sufficient cash flow and adequate insurance coverage is a goal for most. Take advantage of your employer retirement matches that are available.

In addition to insurance, creating a budget is important and there are lots of resources to help you find the right budget that works for you. The tricky part is sticking to it. The fancy apps and excel sheets take time to track your spending. Make it simple and remember cash flow is key.


There is an abundance of unknown and lots of what ifs during the transition stage for physicians. Many medical specialties require another year of education through a fellowship. Depending on where your fellowship is located, you may have to move to a city far away for the year.

Upon completion of your training you now must decide where to practice. Should you start your career at a non-profit hospital or take your skills to a private practice? There are costs associated with traveling to interviews and settling into a new home, while still factoring your medical school debt in your budget.


At last, after twelve long (or even more) years of preparing to enter your career as a physician, it can take time to fully adjust from transition to practice. You are even more likely to be married and starting a family. With a family, comes more financial responsibility.

You may be ready to buy a home for your family and your larger paychecks are becoming more of a reality. But… it’s also time to focus on paying down your student loans and maxing your 401k contribution. Review your asset protection policies before you go for the luxuries. Also consider the type of school you plan for your kids. How will you pay for your children’s tuition during grade school and college?

Financial success is defined differently by many. Shedding as much debt as possible can offer a sense of freedom. But, deciding the best strategy around student loans, your mortgage, cars, and credit cards can be confusing. You are also feeling the need to finally begin to accumulate wealth- an important strategy to carry out during your mid-thirties to sixties. Know the difference between a traditional IRA and a Roth IRA. These two retirement options have differing benefits, so you will want to take advantage of both.


You have reached the end of your career in medicine. If you have had a solid plan all along, you should be able to live the retirement you want. Three factors that will affect your financial situation now include your income, living expenses, and savings. After working hard to take care of your patients and family, you have time to yourself. Do you want to travel to see the world, volunteer, be there for your grandchildren’s milestones or a combination of those three?

No matter what stage you are in now, or how well you have navigated to this point, it’s never too late to improve your future. Contact Spaugh Dameron Tenny if you need help navigating.

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John Dameron

John Dameron | Financial Planner and Partner with Spaugh Dameron Tenny since 2002. Through a long-standing relationship with Atrium Healthcare, John created a lecture series called Physcians Financial Focus, authored a book call The Residents Survival Guide and has coached hundreds and hundreds of physicians from residency and fellowship into practice. Interesting fun fact about John is that he’s one of 7 kids, has 3 boys of his own (plus one more on the way) and love hunting and grilling meat.