How To Create A Personal Budget For Physicians

by Emily Geitner on Sep 14, 2015 6:00:00 AM

How To Create A Personal Budget For Physicians

You’ve finished your medical training and finally you’ll start to earn your full salary. After living off of a resident's salary for so long, it may seem like you’ll have a lot of extra money, but the truth is you also have new responsibilities and expenses. Medical student loans, cost of living, and professional dues can quickly dwindle your salary. 

That's why it's important to create a personal budget now to be smart about your money. 

Here, we offer some guidelines to help you create a personal budget.

Consider Your Life Goals

Think about what you want out of life. Ask yourself questions like:

  • How do you want to spend your time?
  • Who do you want to spend your time with?
  • What are you passionate about?
  • Do you want to buy your dream home?
  • Do you want to start your own practice?
  • Do you want to travel around the world?

Take time to consider your big life goals and write them down.

Goals help set the direction to pursue what you really want out of life.

Once you’ve set your goals, you are ready to create a personal budget. You can track your personal budget easily on free websites such as or

Before you start, make sure you know the exact amount of your gross monthly income and account for the income tax you’ll have to pay on this amount.





Make a List of All Your Expenses

Then, make a list of all your monthly expenses.

The basics: Expenses like food, housing, and transportation should make up about 50 percent of your expenses.

Student loans: You have several options when it comes to better managing your student debt. 

For example you may be able to consolidate or refinance your loans which could result in lower monthly payments. 

Consolidation, which means combining multiple existing student loans into one new loan, can make it easier for you to handle your monthly payments since you’ll only have to manage one loan. You may also be able to qualify for a lower interest rate as consolidation often allows you to switch from a fixed interest rate to a variable interest rate or vice versa.

Refinancing is when you apply and become approved for an entirely new loan with a different interest rate, maturity schedule, and schedule of monthly payments. An advantage of refinancing is the potential to save money on interest and to possibly shorten the term of the loan too.

Retirement and other savings: This component should make up about 25 percent of your monthly expenditures. Kimberly Palmer, author and personal finance expert states “to some people, a savings rate of 25 percent will sound high. In fact, most Americans manage to save less than 5 percent of their incomes.

But in order to establish financial security, putting one in four dollars aside for the future is necessary, especially considering how many employers are cutting back on pensions and other supplementary savings plans. The most successful savers start slowly, by putting just two percent of their monthly salary aside through automated pay check deductions and then slowly ramping up this percentage until hitting their goal rate.”

Professional expenses: Conferences, professional association fees, and publication subscriptions should make up 5 percent or less of your expenses. Palmer says another classic mistake physicians make is to scrimp on professional investments. It’s important to set aside money to keep up with professional networks, participate in associations and conferences, and remain current in your field.

Household expenses: Day-to-day maintenance and cleaning should be approximately five percent of your total monthly expenses.

Entertainment expenses: This type of spending should make up five percent or less.

Put it All Together

Once you’ve subtracted all your expenses from your income, you should have a surplus. You can use the extra money to personalize your own needs, save for a vacation, or to make an extra-large student loan payment.

If your expenses exceed your income you’ll have to revisit your expenses and make appropriate adjustments to cover the shortfall.

If you’ve never had to create a personal budget before you may find the process overwhelming. However, once you see how being smart about your money can help you move closer toward your life’s goals you’ll agree it is well worth it.

Image from pixabay

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This post was written by Emily Geitner

Emily is Director of Operations & Marketing for LinkCapital and responsible for managing the company’s day-to-day operations as well as leading strategy, marketing, and user experience for all Link consumer products.