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Why Medical Residents Need A Financial Strategy

Is there any value in developing a financial strategy if you have very little money or if you’re in debt from medical school? The answer is yes.

At any stage in your life, there are things you can do and choices you can make that will help you reach your financial goals—both short-term and long-term.

As a medical resident, here are six financial areas that you can start thinking about. By taking an interest now, you’ll be taking control of your financial future.

1. Financial management

Calculate your income and expenses as well as net worth and cash flow to help answer the following.

  • Should you consolidate your student loans in residency?
  • Should you repay your debt or start investing?
  • Should you rent a home or buy?

2. Asset management

If you are able to save some money, make sure your portfolio is diversified, and structured with your goals in mind.

  • Should you invest in an RRSP?
  • Should you invest in a TFSA?

3. Risk management

Your biggest asset right now is your earning potential. If you become disabled, critically ill or die, it could be a large financial burden on your family.

  • What types of insurance do you need?
  • How much disability coverage should you get?
  • Which riders should you consider?

4. Tax planning

Paying less tax means keeping more money for yourself. By evaluating different strategies now, you can minimize your tax burden in the future.

  • How should you save for your income taxes once you’ve started to practise?
  • When should you consider incorporating your practice?

5. Retirement planning

If you can start planning for retirement early—saving early and often—the greater the paycheque later in life, not to mention less anxiety.

  • When do you plan to retire and what will your lifestyle look like?
  • What are your expected sources of income in retirement?

6. Estate planning

Even if you have no dependants and few assets, writing down your wishes in the event of your death can make it easier for your loved ones.

  • Do you have a will that states how your assets should be distributed if you pass away?
  • Do you have a power of attorney so your family can act on your behalf in financial matters if you’re incapacitated?


Research has shown that regardless of their socioeconomic background, Canadians who plan for their financial future with a professional have higher levels of financial and emotional well-being. They also believe that their financial and retirement goals are on track, and they’re more confident about meeting unexpected financial challenges.

To learn more about creating a financial strategy, contact an MD Advisor with the MD MedEd CounselTM. MD MedEd CounselTM is a team of MD Advisors and Early Career Specialists dedicated exclusively to medical student and residents. Find an MD Advisor near you.