Financial advice women physicians would give their younger selves

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

Overcome negative beliefs about money

Studies show that 45% of women report a lack of confidence regarding money management, with many women reporting discomfort and embarrassment when it comes to talking about finances. Julie K. Gunther MD, a family physician and owner of sparkMD, a direct primary care practice in Boise, ID, 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.”

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.”

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.”

Negotiate your first salary

“Never accept the first salary you are offered,” says Tiffany Leonard, MD, a family physician in Hatboro, PA. Indeed, failing to negotiate your salary is a mistake that can lead to a million dollars or more in lost income over a career, and one that women make four times as often as men.

The idea of negotiating salary never even occurred to me during 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 gotten much more!).

Research shows that women may avoid negotiation because of fear of confrontation or anxiety about being rude. Even when we do negotiate, studies 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. According to experts, the solution is greater pay transparency and openness about discussing salaries with each other. This is an area where we can engage our male colleagues as allies, something that I am seeing more often with the current generation of graduating residents. Newer men and women physicians are increasingly discussing salaries with each other, and seeing the differences is helping women to close the pay gap by negotiating higher wages.

Spend less and save more

A common theme among mid-career women physicians is to 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 Tiffany Leonard, who now 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.”

Investing early in retirement is essential for physicians, who don’t have as long as most professionals to allow retirement contributions to grow because of our long training. Once we do start earning full wages, income caps may limit our ability to invest in tax-favorable retirement funds, like a Roth IRA. While 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, MD, 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 MD, a family physician in Kirkwood, MO agrees. “Don’t let the idea of having money or your first paycheck allows you to get comfortable living at or just below your means. Plan to live well below your means keeping in mind what really matters to you.”

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 MD, a family physician in Christianburg, VA. 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, MD, a family physician in Sauk Center, MN 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.”

While many women physicians agreed that paying off debt is the key to financial independence, Janice C. Brown MD, a Physiatrist in Ocala, FL, 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.” Instead, Brown would advise herself: “Number one is to save money and invest it. Making money while you sleep trumps any debt.”

Women physicians would advise themselves to consider alternate loan repayment options like the National Health Service Corps, public student loan forgiveness, or the military. Rachel Langley, DO, a family physician in Colorado Springs, served as an Air Force doctor 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.” Alternately, physicians can join 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 Public Student Loan Forgiveness requires physicians to work for a qualified employer for ten years (which can include residency training) first, doctors who are interested in self-ownership may want to skip the program, says Megan Moini, MD, a Med-Peds specialist in Cleveland, OH. “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.”

Take care of your health and wellness

Women doctors were emphatic in urging 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, MD, a family physician in Corpus Christi, TX. “Your health is a bank that you deposit into.”

Shenary Cotter says that she would tell herself 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.

Andrea 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.” Rachel Langley says she would also urge herself to devote time to hobbies. “They can support you through difficult times.”

Many women physicians pointed out the importance of having adequate insurance, especially disability insurance, and recommend 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,” says Julie Gunther.

Do what you love—and be your own boss

Ultimately, women physicians would remind themselves 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,” says Esther Khatibi.

Many physicians say they would encourage themselves to take a chance on self-ownership. Family physician Candice Cavicchia Miller, MD, now owns her own practice, Sparrow Family Medicine in Lancaster, PA. 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 women physicians, according to Janice C. Brown is to take control: “Don’t be afraid to practice medicine the way you want.”