Financial advice that female physicians would give their younger selves

Studies show that female physicians earn $2 million less than their male colleagues over a 40-year medical career. Although there are steps that can be taken to close the gender pay gap, you also need to be smart about managing money. For example, the quickest way to lose half of your assets is to not have a prenuptial agreement in place when you get married, a financial lesson I learned the hard way. I asked other female physicians to share their financial mistakes and advice they would give their younger selves.

Overcome negative beliefs about money

Many women report discomfort and embarrassment when it comes to talking about finances, with just 55% of women saying they feel confident about money management, according to results from studies by Fidelity Investments and U.S. Bank. Julie K. Gunther M.D., a family physician and owner of sparkMD, a direct primary care practice in Boise, Idaho, says that this was a struggle early in her career. “A huge problem for me has been understanding that how we make money and value ourselves is based on our belief system — what has been passed down from our parents or our family,” she says.

In particular, Gunther felt uncomfortable with the idea of profiting from her work as a physician. “I wish I could go back and tell myself that my ability, talent, and good works and contribution do not need to be free or even affordable for everyone. I don’t have to justify how I make money, how much I make, how much I spend or who I give it to,” she says.

Gunther recommends that every physician read about money management or take a course on the subject. “I don’t mean just how or where to invest, but to understand what money means to us. It is a resource just like time, and we need to protect it, care for it and don’t just give it away,” she says.

Negotiate your first salary

“Never accept the first salary you are offered,” says Tiffany Leonard, M.D., a family physician in Hatboro, Pennsylvania. Indeed, failing to negotiate your salary is a mistake that can lead to $1 million or more in lost income over a career, and it’s a mistake that women make four times as often as men.

The idea of negotiating salary never occurred to me when I received my first job offer. With such an increase over residency wages, I recall just saying, “Thank you.” It was only when my potential employer immediately volunteered another 20% that I realized my mistake … and in retrospect, I probably could have asked for much more.

Research shows that women may avoid negotiation because of fear of confrontation or anxiety about being rude. Even when women do negotiate, study results show that women have less successful outcomes than men. Researchers blame this on backlash from employers who may see assertive negotiating behavior as a challenge to societal expectations that women be more passive and accommodating. Solutions include greater pay transparency and openness about discussing salaries with each other. This is an area in which women can engage male colleagues as allies, something that I am seeing more often with graduating residents. New physicians are increasingly discussing salaries with each other; seeing these differences helps women close the pay gap by negotiating higher wages.

Spend less and save more

Many midcareer female physicians would tell their younger selves to live on a lower income and start saving for retirement as early as possible. “Get a professional financial planner early — your mom’s advice is probably dead wrong,” says Leonard, who owns her own practice. Leonard advises contributing the maximum to retirement accounts first and living on money left over. “I do this now, but I didn’t in college,” she says.

Investing early for retirement is essential for physicians because more years in training means we don’t have as long as most professionals to allow retirement contributions to grow. Once we do start earning full wages, income caps may limit our ability to invest in tax-favorable retirement funds such as a Roth IRA. Although investing in retirement may feel uncomfortable during lower-earning residency years, most physicians wish that they had made the sacrifice.

Another benefit to living frugally is the freedom to walk away from a job you don’t love. Shenary Cotter, M.D., says she would advise herself to “keep your lifestyle the same as residency until you have enough money in the bank to leave any job that makes you sad.” Andrea Otto, M.D., a family physician in Kirkwood, Missouri, agrees. “Don’t let the idea of having money or your first paycheck allow you to get comfortable living at or just below your means. Plan to live well below your means by keeping in mind what really matters to you,” she says.

Pay off debt

An important step to financial independence is paying off debt, especially student loans. “Be aggressive about making sacrifices to pay off your loans early,” advises Katie P. Edson, M.D., a family physician in Christiansburg, Virginia. Edson says that debt and lifestyle can trap physicians in jobs they dislike and that paying off debt allowed her to open her own clinic. Sarah J. Martin, M.D., a family physician in Sauk Centre, Minnesota, agrees. “Don’t take out the maximum in loans if you can help it,” she says. “Budget yourself so that you can pay school loans fast.”

Although many female physicians agreed that paying off debt is the key to financial independence, Janice C. Brown, M.D., a physiatrist in Ocala, Florida, says that fears over student loans should not stop doctors from practicing medicine on their own terms. “Medical school debt is an investment in you and not a burden; pay it off based on your emotional comfort level,” she says. Instead, Brown would advise herself: “No. 1 is to save money and invest it. Making money while you sleep trumps any debt.”

Female physicians also would advise their younger selves to consider using alternate loan repayment options such as the National Health Service Corps, applying to the Public Student Loan Forgiveness program, or joining the military. Rachel Langley, D.O., a family physician in Colorado Springs, Colorado, served in the Air Force as a flight surgeon to pay for medical school. “There are different arrangements the military can make for physicians,” she says. “If you start from when you apply to medical school, you receive a stipend throughout school and can arrange for training during your summers, which I thought was a lot of fun.” Physicians also can join the military after residency and receive loan repayment in exchange for years of service. “The great thing is that after a set period of time, you will be debt free,” she says, noting that many of her colleagues are still paying loans while she has already completed her service commitment.

Because the Public Student Loan Forgiveness program requires physicians to first work for a qualified employer for 10 years (which can include residency training), doctors who are interested in self-ownership may want to skip the program, says Megan Moini, M.D., a primary care physician and pediatrician in Beachwood, Ohio. “I wish I had refinanced my student loans right away instead of banking on loan forgiveness, which no longer applies now that I have a direct primary care practice,” she says.

Take care of your health and wellness

Female doctors emphasized that they would urge their younger selves to be more mindful of their health. “Don’t eat from a vending machine in undergraduate because you are worried about money,” says Esther Khatibi, M.D., a family physician in Corpus Christi, Texas. “Your health is a bank that you deposit into.”

Cotter says that she would tell her younger self to prioritize self-care and family over work and to use her vacation and sick days. “Yes, all of them,” she says. “Every single year.” Cotter also says that she would also advise herself to work part-time when her children were small.

Otto agrees. “Don’t let your job or career run your life. It’s too easy to get caught up and lose sight of your priorities and who you really are,” she says. Langley says she would also urge her younger self to devote time to hobbies. “They can support you through difficult times,” she notes.

Many female physicians pointed out the importance of having adequate insurance, especially disability insurance, and recommended obtaining an own-occupation policy during residency training. “Given that I had breast cancer at 40, two years into an entrepreneurial venture, I encourage everyone — absolutely everyone — to have a long-term disability policy,” Gunther says.

Do what you love — and be your own boss

Ultimately, female physicians would remind their younger selves to maintain focus on what they love. “Don’t worry that everyone is picking specialties in medical school. If family medicine is the best option for you, then you’ll be able to do what you love,” Khatibi says.

Many physicians say they would encourage their younger selves to take a chance on self-ownership. Family physician Candice Cavicchia Miller, M.D., now owns her own practice, Sparrow Family Medicine in Lancaster, Pennsylvania. Miller says she would remind herself that doctors are always replaceable to corporations. “It sounds scary, but it’s actually very reassuring,” she says. “You can leave the job you hate — it will go on without you. So take care of yourself.”

The best financial advice for female physicians, according to Brown, is to take control. “Don’t be afraid to practice medicine the way you want,” she says.