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Overcoming 5 common hurdles that keep residents from saving money


After investing so much time and money in medical school, you are no doubt finding residency to be a life-changing start to your professional career. While your paycheque may not be large right now, setting something aside is good practice for future financial success.

Here are five common barriers that prevent young physicians from saving money—and an easy way for you to overcome each one:

1. I just don’t have any time.

As a medical resident, you have a schedule packed with clinical duties, studies, research and volunteer time—not to mention seeing your family or getting to the gym. Who has time to sweat over financials?

Consider this: use time to your advantage.

As busy as you are, time can be on your side if you can set aside even a small amount of money through a pre-authorized contribution plan. The younger you are, the more you’ll benefit from compound interest over time—which means that your contributions earn interest upon interest.

Even a small amount like $25 a month can accumulate to a big sum over time, as you can see in the example below. For other contribution amounts, use the MD compound growth calculator to see what you could achieve in savings.

If you save $25 a month for 30 years, assuming a 6% rate of return, you’ll earn over $16,000 from your small investment.

Total contributions:            $9,000

Compounded returns:        $16,113

Total Value:                          $25,113

2. I’m too tired to think about savings.

If you’re tapped out, it’s easy to tune out concerns about—or to not even think about—your finances.

Consider this: set up automatic contributions and hit the snooze button, guilt-free.

Good self-care habits are essential for physicians in training, from managing stress to getting enough sleep. Your financial health can also suffer due to neglect or burnout.

Make a new habit of saving and investing. If you can automatically contribute even a few dollars each month into a savings plan, you’ll be able to rest easy, knowing you’re working toward future financial achievement.

3. I have a young and growing family to support.

Work-life balance is a challenge for any physician in training, and it’s even tougher for those who are working parents. Stretching a resident’s income to cover childcare and necessities can be a juggle that drops the ball on saving.

Consider this: prioritize saving toward one family goal.

When juggling bills, debt and other financial requirements, think about “paying yourself first.” Set aside a certain amount each week or month, and focus on saving toward one family goal for now, such as a child's education fund, a down payment for a home or even a well-earned vacation.

For instance, if you and your partner have been talking about buying a house once you finish residency, start building equity now by accumulating a down payment. By contributing a few dollars regularly to a dedicated savings account, you’ll have more cash in hand to help finance a purchase when the time comes.

4. I have huge debts to pay. Why try to save?

If you relied on loans or lines of credit through medical school, your debt may loom large compared with the smaller paycheque you earn in residence. Why save when you have so much to repay?

Consider this: save to start building your net worth.

Now that you earn income, setting aside savings is an important habit to develop, to start shifting your net worth to the “plus” side.

Loan repayment rules during residency differ from lender to lender and also depend on the type of loan or line of credit you have. It’s always a good idea to quickly pay off consumer debt, such as credit card balances that have high interest rates.

A debt repayment plan is important, but so is establishing a savings base. For an example of how both can be accomplished, see the article Should medical residents start saving or pay down debt?

5. I’ll start saving when I’m earning “real money”!

You expect to earn more money as a medical professional within a short time; why not wait until then?

Consider this: use your early earning years to adopt good financial habits.

Even if you are certain of earning high income in a few years, starting a savings plan while in residency can help you to prepare for the transition to practice and to learn the basics of investing.

You’ll be better equipped to make financial decisions once you become a practising physician, and you can easily increase savings proportionally, as your earnings grow.

For more information about getting started, please contact your MD Advisor.1

1 MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.

Banking and credit products and services are offered by The Bank of Nova Scotia “Scotiabank”. Credit and lending products are subject to credit approval by Scotiabank.

The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice nor is it intended to replace the advice of independent tax, accounting or legal professionals.