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Protecting What Matters Most

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Personal Finance Fundamentals I Wish I'd Followed at 30

Teenagers and college grads expect to “have it all together” by their 30s. It’s ok to be a kid in your 20s — even in med school — but when the infamous 3-0 rolls around, it’s time to focus on building a solid foundation, climbing the ladder, and settling down to start a family.

Few thirtysomething physicians, however, find themselves in ideal financial circumstances.

Most entering residency find that their money management skills are lacking somewhat more than they thought. All of sudden they can’t make enough dough to keep up with their wants and needs at the same time, and so many get blown off course just when they need to start tacking into the wind.

Major Financial Milestones for Millennials

Even with your 20s behind you, it probably feels as if you’ve only just managed to get a foothold in your career. Understandable for physicians, who enter their profession later than most graduates. But as your career starts to take off, take steps to capitalize on your prime-earning years so you can look forward to a comfortable career leading up to retirement.

Our 30s is the time to take on responsibilities and make serious commitments to yourself, your job and family. Commit to your financial future by formulating a plan for retirement. No need to become a financial expert overnight, but you do need to get a handle on how much you are making, spending and saving and whether your savings are growing enough to meet your future goals.

Start a retirement savings plan as soon as you can. Begin learning about the different retirement accounts and options available to house your savings. With time on your side, compound interest combined with a steady savings program can grow into a considerable sum over a span of several decades.

Here are three more tips young physicians can bank on:

Tip #1: Pay Down Your Debt

Start saying the long goodbye to your student loans. Promptly pay them down or seek forgiveness programs. When your educational outlay shrinks enough, you can begin building wealth.

Pay off your credit cards, or at least transfer your balance to a card with zero percent interest. Once you pay off the principle, continue using your cards to build credit, paying off your full balance each month.

Tip #2: Stop Living Paycheck-to-Paycheck and Save for a Rainy Day

Start putting money away little by little. It won’t be pleasant, but it will pay off in the end. Stash away as much as you can until you have created a three-month emergency fund. This will ensure breathing room if you find yourself unable to work for a period of time.

Make sure to keep some money accessible. Retirement accounts are not a good place to turn for emergency funds. Your IRA, for instance, charges a sizable penalty if you attempt to make a premature withdrawal.

RELATED: 10 Important Statistics in Honor of Disability Insurance Awareness Month

Tip #3: Protect Your Image, Protect Your Income

In the social media era, most Millennials are aware that they need to protect their brand — and by “brand,” we mean professional reputation. Make sure your image is positive so that it will not damage your earnings potential. Even a small social slipup can cause financial hazards.

RELATED: Social Media and Its Critical Impact on Your Future Medical Career

Financial Maturity Is Its Own Reward

A little planning goes a long way. In time, you will build a strong credit history so you can borrow money at more favorable interest rates when the need arises. You’ll also learn to anticipate and budget for recurring annual expenses such as household and vehicle repairs. Saving, too, for the occasional splurge will become easier.

Your 30s are when you take charge of your life and plan for your future. Avoiding financial mistakes will help you get where you want to be.

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