Using these principles, I can now make some general recommendations.
- Live similarly to the way you did as a resident for a couple of years so you have the cash flow to pay down your debts within two to five years while still maximizing retirement account contributions.
- Be sure to contribute enough to your 401(k) to get the entire match.
- Pay off those credit cards as soon as possible.
- Stop buying cars on credit. Once the car loan is paid off, continue to make car payments into a savings account so you can pay cash for your next car.
- Stop using credit cards for credit.
- Consider refinancing student loans with a private bank.
- Consider refinancing your mortgage into a fixed-rate mortgage to protect you from rising interest rates.
- Decide on what order to pay off the students loans, either smallest first or highest interest rate first. If interest rates rise, move the variable rate student loan to the top of the list.
Dr. Dahle is the author of The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing and blogs at http://whitecoatinvestor.com. He is not a licensed financial advisor, accountant, or attorney and recommends you consult with your own advisors prior to acting on any information you read here.
Topics: DebtEmergency PhysicianFinancial PlanningInvestmentPersonal Finance
About the Author
James M. Dahle, MD, FACEP, is the author of The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing and blogs at http://whitecoatinvestor.com. He is not a licensed financial adviser, accountant, or attorney and recommends you consult with your own advisers prior to acting on any information you read here.
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One Response to “10 Guiding Principles to Manage Debt, Start Retirement Savings for Emergency Physicians”
February 21, 2016
ZakGreat tips.
I do have a question, though, that I can’t find the answer to anywhere.
My wife and I are both finishing residency in June. We have over $500,000 in debt between the two of us. We are looking at student loan repayment plans, and my question is this:
When we have to move into a standard repayment plan (which will end up being the most likely option for us), is the minimum payment going to be based on a 120 month term, or will it be based on the 120 months minus the number of months we’ve already paid with our IBR (making the overall term closer to 84 months when we graduate)?
Thanks for any advice.