Financial Planning for Young Physicians: 5 Fixable Mistakes
By Jared Andreoli, CFP®, CSLP®
Young physicians are confronted with multiple financial difficulties, including student loans, the challenges of starting a practice, and juggling personal goals with professional demands. Making mistakes along the way is common, but the good news is that each mistake is an opportunity to build a solid financial future.
In this article, we share common financial pitfalls for young physicians and provide actionable steps to rebound. We discuss strategies for tackling student debt, lifestyle creep, investment timing, tax mitigation, and estate planning.
Addressing these challenges proactively allows young physicians like you to thrive in 2025 and beyond.
Mistake #1: Focusing Solely on Paying Off Debt
Paying off student loans can feel like an urgent priority, but putting all your extra money toward debt can leave you vulnerable without an emergency fund or retirement savings. While reducing debt is important, neglecting other financial objectives may create challenges down the road.
To avoid this common mistake, strive for balance. Start by building an emergency fund that covers three to six months of living expenses, providing a safety net for unexpected situations. At the same time, contribute enough to your 401(k) to take full advantage of your employer’s match—an easy way to grow your savings while tackling debt.
Mistake #2: Upgrading Your Lifestyle Too Quickly
Bigger homes, fancy cars, and expensive holidays can all be alluring, but it’s easy to upgrade your lifestyle too quickly when your income increases. This “lifestyle creep” has the potential to quickly sabotage financial planning for young physicians and throw off your long-term financial objectives.
To steer clear of lifestyle creep, keep a modest lifestyle and give long-term goals top priority. Establish a reasonable budget and deliberately cut back on discretionary expenses. For example, consider setting a percentage cap on your new income for lifestyle expenses like entertainment, dining out, and vacations. The money left over should be used for debt repayment, necessities, and—above all—savings and investments.
Mistake #3: Dismissing Estate Planning and Insurance
Young physicians with budding careers are often restricted by busy schedules and pressing issues. But this can result in large gaps in safeguarding your family. We all know that unexpected events can happen at any time, and neglecting estate planning and insurance needs can have severe financial and psychological repercussions.
That’s why it’s crucial to prioritize basic estate planning and proper insurance coverage. Take a look at the fundamental steps you can take to safeguard your family:
Verify you have sufficient disability insurance to safeguard your income in case of illness or injury.
Get life insurance to provide a financial safety net for your loved ones in the event of your death.
Set up a simple will or trust to:
Dispense your assets properly.
Mitigate possible legal disputes.
Provide confidence for your loved ones.
Mistake #4: Ignoring Tax-Saving Opportunities
Taxes are inevitable. There are opportunities out there to mitigate your tax burden, but unfortunately, many young physicians overlook these tax-savings incentives. Failure to utilize these strategies can significantly affect your overall wealth buildup.
These are some of the ways you can leverage tax-incentivized accounts and deductions:
Contribute the largest amount allowed by the IRS to retirement plans like 401(k)s or 403(b)s.
Utilize a health savings account (HSA), which provides triple tax incentives:
Tax-deductible contributions
Tax-free growth
Tax-free withdrawals for qualified medical expenses
Explore backdoor Roth IRA strategies to contribute to Roth IRAs indirectly.
Mistake #5: Putting Off Investing
Many young physicians miss out on the potential of compound growth because they put off investing for too long. Procrastination can significantly affect long-term financial results. If you start investing early, your money has more time to grow through the compounding effect, where investment returns create further returns.
To overcome this challenge, start investing early, even if it’s just a little. The secret is to consistently contribute to your investments so compound interest can do its magic. To develop an investing plan that fits your objectives, risk tolerance, and time horizon, think about collaborating with a knowledgeable financial advisor.
Get Professional Help With Financial Planning for Young Physicians
Need help tackling common financial pitfalls? Contact us today to create a personalized strategy tailored specifically to your career as a young physician.
Get started by scheduling a free consultation, or reach out to us by emailing jared.andreoli@simplicityfinancialllc.com or calling 414-207-6473.
About Jared
Jared Andreoli, CFP®, CSLP®, is president and financial planner at Simplicity Financial, a fee-only RIA dedicated to helping early-career physicians conceptualize their financial picture and achieve their financial goals. Jared specializes in devising individualized financial road maps for clients, and he loves nothing more than a full day meeting with clients who value his partnership to solve problems—big and small.
After college, Jared spent six years working as a mutual fund administrator for a large company. While he learned an immense amount about the financial world, he was missing the personal connection of working with individual clients. Combining his passion for finance and personal connection, he established Simplicity Financial in 2017.
Jared has a degree in finance with a concentration in financial planning from Western Kentucky University, along with the CERTIFIED FINANCIAL PLANNER®, CFP® and a Certified Student Loan Planner (CSLP®) certifications. Outside of work Jared enjoys cooking and traveling. He played baseball in college and still coaches occasionally. He and his wife recently welcomed a daughter, who occupies most of their time. To learn more about Jared, connect with him on LinkedIn.