3 things physicians should know about saving during residency

For doctors, the assistantship is an essential step towards a long career in medical practice. It can also be your first opportunity to plan your financial future.

A healthy financial plan always includes some kind of savings account. Kaitlin Walsh-Epstein, Senior Vice President of Marketing at Laurel Road – a digital banking platform and brand of KeyBank – gave insights into the first steps in building your savings and how a resident doctor can implement them.

It’s important to have a plan

It’s important to have a plan

Resident doctors find themselves in the exceptional situation that they tend to earn significantly less money than after completing their training. The first step in building a nest egg is to determine what your long-term financial goals are and how you can achieve them.

“You need to understand what your priorities are and create a plan for them,” said Walsh-Epstein. “If you want to pay off more of your student debt as soon as possible, you should use more of your monthly income on your loans.”

In addition to the repayment of loans, Walsh-Epstein cites buying a house and the cost of children as two important life events for which general practitioners want to save. In addition to refinancing student loans – for which Laurel Road is a preferred provider of the AMA – Laurel Road members also have access to Financial Insights, a product that enables them to compare their financial plans with those of their peers.

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Budgeting is really important

Budgeting is really important

The old saying when it comes to saving is, “Pay yourself first,” said Walsh-Epstein. To do this effectively, you need to understand what is coming in, what is going out, and how much you can afford to put away.

“Budgeting is important in developing a practice,” she added. “It should be part of your daily financial health. Your budget will change based on your needs and what is happening in your life, but you need to try to stick to it. It is common for people to want to live in the moment, but planning for the future is also important. And this is exactly where your budget helps you. “

Let your money work for you

Let your money work for you

If you are a resident who finds you have extra cash in your pocket and wondering what to do with it, a savings account might benefit you. When you open a savings account, you can put that extra income aside. In general, many savings accounts are risk free and more liquid. This approach also mitigates the risk of some other investment strategies. Walsh-Epstein suggests a balanced approach when it comes to investing and saving, and doing thorough research to find out what works best for you.

“It’s really important to keep your balance,” she said. “Know what you are investing, what you are saving and what are the risks associated with the investments you want to make.”

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Laurel Road offers a high yield savings account offered by Laurel Road that offers an annual percentage rate of return (APY) of 0.75%, which is 10 times the national average APY offered by the Federal Deposit Insurance Corp. was reported in June. The specified variable APY is correct as of June 28, 2021 in this article and can be changed before or after the account is opened. No minimum balance is required to earn the APY. The maximum credit to earn the APY is one cent less than $ 2 million. For balances of $ 2 million or more, the APY is 0.05%. Fees can reduce the income in the account.

In order for a resident doctor to open a Laurel Road High Yield SavingsSM account, you must either be an existing Laurel Road customer or a new customer with an MD or DO degree.

AMA members who open a Laurel Road High Yield SavingsSM account by December 30th this year will receive a cash bonus of $ 100, which will be paid within 45 days of the account opening. There is a limit of one cash bonus per qualifying account holder.

This type of account allows residents to build up their savings and offers the flexibility to use your savings for either short term or long term goals. The AMA has selected Laurel Road as their preferred provider to help you navigate your financial future.

source https://collegeeducationnewsllc.com/3-things-physicians-should-know-about-saving-during-residency/