Nearly two-thirds of the next generation of medical professionals say they are grappling with intense stress and anxiety about their personal finances, a new survey suggests.

Despite the promise of high future incomes, 72 per cent of medical students say they are extremely or somewhat stressed about making financial decisions – particularly relating to repaying student loans, affording medical school and the cost of housing – and 38 per cent are concerned about making ends meet month to month.

These findings from an Environics Research study commissioned by physicians-focused wealth management firm MD Financial Management highlight the financial worries these future doctors contend with as they spend heavily to obtain their education.

“Many physicians come out of medical school with significant debt, sometimes up to $200,000,” says Stephen Hunt, MD’s national lead of financial planning advice and strategy in Stittsville, Ont.

“In most cases, they don’t have time for part-time jobs, so it’s purely spending over those four years,” adds Hunt, a certified financial planner who has advised many early-career physicians over the years.

MD Financial Management, a wealth management firm serving physicians, medical students and their families, commissioned the online survey, which polled 93 medical students and 72 residents from Sept. 8 to Nov. 3.

The survey also found that their serious money worries remain even when their financial circumstances improve as they begin practising or completing specialized training.

Even once they begin earning an income, 69 per cent say they are extremely or somewhat stressed about making financial decisions, and 47 per cent say repaying student loans is their top concern.  

Graduates are also stressed about managing their practice, with 21 per cent saying that increases in government billing rates do not keep up with the cost of running it and 18 per cent say they worry about short-term cash flow challenges, the survey showed. 

They are also paying closer attention to longer-term goals, with 33 per cent saying their top concern is tax planning and 22 per cent indicating their priority is finding a balance between enjoying the present and saving for the future. 

“Many residents are worried about managing their practice, which is like running a small business,” Hunt says. “They worry about repaying debt while catching up with their peers, in terms of life events like travel, marriage and home-ownership, since they may feel they missed out on those things during their medical school and residency years.”

Some of the challenges faced by these professionals can be traced back to their own financial preparation. Four in 10 medical students say they did not have a budget or plan when they started med school and only 1 in 10 follow a budget regularly. Among those who did prepare a budget, 59 per cent admit they underbudgeted for their expenses.

Although the majority of students (74 per cent) are using a student loan, assistance from parents (60 per cent), line of credit (57 per cent) or credit card (54 per cent) to finance their education, only 12 per cent say they have a thorough understanding of their educational and early career costs, or how much debt they are likely to accumulate.

While medical students are exceptional academic performers, more than half (61 per cent) achieved a failing or near-failing grade on a 13-question financial literacy test administered as part of the study. The average test score among survey participants was just 46 per cent.

Residents demonstrated more self-assurance with financial decision-making than students, since 71 per cent say they are very confident or confident. However, 47 per cent worry they do not know enough about the subject to trust financial advisors, and 43 per cent say they don’t have time to learn financial topics on their own. The majority of residents scored poorly (below a 60 per cent score) on the financial literacy test, with the average score being just 53 per cent.

These financial grades are concerning when you consider that 11 per cent of residents make all their investment decisions on their own and 50 per cent of residents say they prefer to make their own investment choices but sometimes seek a second opinion or specialized advice from an advisor.

“It’s also natural that busy physicians might ask advice from a ‘go-to doctor’ who seems knowledgeable about finances; however, this person might not be well-versed in everything or understand your specific situation,” cautions Hunt. “What works for one doctor may not work for the person seeking the advice.”

Hunt says early-career physicians and students should seek independent, professional advice to improve their financial know-how and reduce their anxiety.

MD has helped thousands of medical students manage their personal finances over the past 50 years and has developed an in-depth program of services to address the specific needs of early-career physicians. Scotiabank acquired MD in October 2018.

Among Hunt’s top tips for worried students or residents who want to take a scalpel to their finances: Be choosy about what financial topics you learn about first.

“We meet physicians who want to talk about ‘flashy’ things like stock markets and hot investments, but when you are starting out there’s much more to gain by focusing on the basics like budgeting, debt and taxes. You can rely on professionals to help with investing, while you spend your time taking control of your lifestyle spending and debt.” 


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