The past year has taken a significant toll on healthcare providers both financially and personally, according to a survey of 750 physicians including 183 dentists from Laurel Road and the White Coat Investor.
For example, 23% seriously considered leaving their profession altogether due to stress or burnout throughout 2020 and the COVID-19 pandemic, with higher rates among women (38%) than among men (18%).
Also, 39% said the pandemic made them realize they are not as financially prepared as they should be in their profession, with 48% of women feeling this way compared to 33% of men.
Yet 66% of doctors plan to be more financially focused in 2021 to benefit their career and personal financial security compared to 2020, with 74% of women making these plans versus 60% of men.
The companies noted financial planning is particularly important to these doctors, who graduate with an average debt of $200,000.
“Findings from this survey further brought to light the challenges doctors and dentists face beyond the pandemic. We know that at this time, they’re even more conscientious of their spending and financial habits,” said Alyssa Schaefer, chief experience officer at Laurel Road.
Additionally, 54% of doctors spent more time on personal finances in 2020 compared to the previous year, with 63% of women noting this, compared to 48% of men. Also, 74% said there’s a direct correlation between proactive short-term financial behaviors and long-term financial success.
Many respondents said they plan to engage in a number of financial activities this year, such as:
- Reorganizing their finances overall: 41%
- Speaking to a financial planner: 34%
- Reassessing student loans: 31%
- Refinancing their mortgage: 17%
- Opening a 529 plan: 14%
Doctors between the ages of 25 and 40 are outpacing older generations in some financial activities, leading the charge on reorganizing their finances overall (44% versus 30% of 41- to 56-year-olds), reassessing student loans (36% versus 41- to 56-year-olds), and opening a 529 plan (17% versus 6% of 41- to 56-year-olds).
Most doctors plan to grow their financial knowledge. When asked to rate their current financial literacy in managing their personal or practice finances on a scale of 0 to 10, with 0 being the lowest, only 4% rated themselves a 10. By contrast, when asked to do the same for their future financial literacy, 50% rated their desired level to be a 10.
“Financial education is critical to doctors, and most doctors want to be more financially prepared,” said Jim Dahle, founder of the White Coat Investor.
Many doctors noted that investments were of particular interest during the pandemic, with 31% investing more because of 2020 and COVID-19, and 31% investing more because of the market downturn. Men focused on this more than women, with 23% of men investing more compared to 14% of women.
These doctors aren’t afraid to take a chance with their investments either, the companies said, as 33% said they plan to invest in riskier investments this year in hopes of achieving a higher return.
Those looking to build financial security can use Laurel Road for Doctors, a suite of financial and banking products tailored to physicians and dentists to help them manage student debt and meet their financial goals. Its Financial Insights platform is designed to help grow financial literacy, with peer-comparison data tools, customized plans for financial goals, and personal finance content based on career stage, specialty, and location.
“Our goal at Laurel Road is to help with the big and small decisions surrounding financials by providing flexible access to products that fit easily into doctors’ lives,” Schaefer said.
“White Coat Investor was founded to help doctors and other high earners have the resources and partners required to be able to manage their financial lives. It takes time, but you can do it, and we can help,” said Dahle.