By Jack Lambert, Staff Writer

Congratulations! You’re an early-career medical professional and you’re starting your first real job. Maybe “real” isn’t the best word. After all, completing your training, residency, fellowship, and certification were an exhausting and impressive feat.

But after years of subsisting on student loans and tuna sandwiches, you’re making a steady income that can help support you and your family.

So how do you make decisions about spending now that your income has changed? Do you use it to pay down your student loans? Invest it? Or do you treat yourself to a dream vacation or a new car—a reward for the hard work and long hours you’ve already invested in your career?

You wouldn’t be the first professional to be confused about financial planning early in your career. In some ways, experts say, it comes with the territory.

“It’s like you fall off the cliff. You’re in the student loan area and you don’t need advice, then [your financial situation changes and] you need advice in a lot of areas,” said Mary McGrath, CPA, CFP, Executive Vice President of Cozad Asset Management.

Seriously, Make a Budget

Financial planning begins with budgeting everything from the amount of money you’ll spend at restaurants during the week to larger items like mortgage payments and automobile purchases.

“Some people get a paycheck and it flies out the window, and they don’t even know what they are spending it on,” said Carolyn McClanahan, MD, CFP, Director of Financial Planning for Life Planning Partners and a former emergency room physician.

Dr. McClanahan recommends using a budgeting app such as Mint, which allows users to sort their purchases by category and review checking and savings accounts, credit cards, and other financial information in one place.

Take a Long View

In most industries, an employee starts at a low compensation rate and works their way up until they are making their largest salary at the end of a decadeslong career. Medical professionals, on the other hand, start their career after an extended run of schooling, often after accruing debt. The first paycheck is typically substantial and reflects the investment you’ve made in your training, but your annual salary is likely to remain fairly consistent for most of your career.

These factors should lead young medical professionals to think critically about their retirement, said Dave Denniston, CFA, a financial advisor with The Capital Advisory Group. Consider: Will I get burned out? Does my retirement start at age 50 instead of 65? As early as possible, take advantage of any matching program offered by your institution’s 401k or 403b plans.

Ask for Professional Help

Early-career professionals drawing their first substantial paycheck may find themselves suddenly popular among friends and acquaintances with ideas for investing their money. Furthermore, many young physicians suffer from hubris when it comes to investments, Dr. McClanahan said. Medical professionals are some of the most educated people around. But that education and intelligence do not automatically transfer to financial matters, she said.

“I say to doctors, ‘Would you do your own colonoscopy?’” Dr. McClanahan said. “Yes, you can be very smart, but it’s good to hire expertise to make certain you’re doing the right thing.” She recommends hiring at least an hourly financial advisor with a fiduciary responsibility to act in their clients’ best interest.

A good financial planner, Ms. McGrath said, should always be ready to advise their clients. “I like to have people call me and say, ‘Does that make sense?’ I don’t want them to call me and ask, ‘Should I eat out this weekend?’ But I do want them to call me if it’s a major financial purchase,” she said.

Invest in Yourself

Ultimately, the most important investment that any young professional can make is in their own career. For oncologists, this means investing in disability coverage and medical malpractice insurance. Ms. McGrath tells clients that they can never over-insure with disability coverage because insurance companies will only give professionals enough coverage to match their income.

“Insurance coverage is not fun to talk about, it’s not fun to look at—it’s just annoying,” she said. “But that’s where you can get totally derailed.”

Mr. Denniston said that many young professionals neglect to consolidate their loans after medical school through the federal government, missing out on the opportunity to enroll in income-based repayment or pay-asyou- earn programs. Both programs accelerate the timeline of the 120 payments needed to become debt-free, he said, if a medical professional works for a nonprofit.

“Perhaps people are so busy doing their grand rounds and adjusting to their schedule, and they have to work 60 to 70 hours a week, that they just say, ‘I don’t have time for this,’” Mr. Denniston said.

He recalled one couple who did not consolidate, leading to a delay when they could have been repaying their loans. “They lost out on two years where they could have been working towards getting their debts paid off,” Mr. Denniston said.

Spend to Enjoy, Not to Impress

Often it’s not unexpected expenses that hurts young professionals financially, but rather a case of “keeping up with the Joneses.”

“Some of those [established] physicians have their debts paid off. They might be driving a Tesla or a Mercedes and it’s like, ‘Gosh, I’d like to have something like that,’” Mr. Denniston said.

Making a detailed budget helps keep aspirational spending in check, and allows you to build in money for luxuries you can reasonably afford as you work toward your financial goals.

Thomas G. Roberts Jr., MD, Managing Member and a portfolio manager at Farallon Capital Management, LLC, and Secretary of the Conquer Cancer Foundation of ASCO’s Board of Directors, understands firsthand the anxiety some young medical professionals feel about their financial future. Prior to joining Farallon, Dr. Roberts was an attending oncologist at Massachusetts General Hospital. He remembers worrying about finances and student loans early in his career, and would advise young professionals to relax and consider the purpose of their paycheck.

“Money has the power to do good things and it also has the power to distract,” Dr. Roberts said. “You’ve planned for your career up to this point for your own personal development. Now, it’s time to think strategically about the good things that money can provide, such as having more choices, and the ability to contribute” to causes you care about.