Because it is the standard and what we’ve practiced for the last three years I’ll use the SOAP note today. I hope this will be helpful for my classmates and other young healthcare professionals. Specifically, I’d like to talk about something that we rarely discuss and are definitely not taught in medical school. Personal finances.
I feel comfortable discussing money. I am neither licensed nor rich, however, so please use this as a starting point!
Subjective: Patient is a 30-year old female with a history of nine years of college who presents today “feeling scared and overwhelmed” by student loans. She used financial aid to pay for much of her undergraduate degree and all of medical school. She hopes to move to Portland for residency in June and reports only a few thousand dollars in savings. She currently rents a two-bedroom apartment with a roommate and drives a 2002 Explorer that is paid off. When asked about investment accounts she laughed.
Objective: Patient has $189,165 worth of student loans at 6.9% interest that will need payments starting this summer. Incidentally, that is the national average for graduating medical students in 2016. 13% of medical students had $300,000 or more!(AAMC Store) Her residency will pay the average of $54,256 with 3-4% raises for the next four years.(AAMC Final Report) She plans to then be a pediatrician with an average starting salary of $167k.(MGMA)
Assessment: Patient is a 30year old female with a mortgage worth of debt who needs assistance forming an appropriate Plan for her Financial Health. She is brilliant but simply not trained in financial matters.
Plan: Will refer the patient to a financial planner or someone who is comfortable and competent in developing a financial plan. She will write down a budget that includes her weekly living expenses as well as the following items. In order of importance:
#Graduation – Congrats!!! Don’t let student loans keep you from grabbing a beer with your friends to celebrate!
#Emergency fund – This is critical and should be the first place you save. Residency is a pretty secure job but you never know when the dog will eat your computer or your furnace will fail.
— Patient will pay the minimum on everything else until she has at least two months worth of expenses in a savings account.
#Housing – Renting is initially easier but has different risks and rewards. Four years is probably enough time for purchasing a home to pay off. Portland home prices have risen a lot lately. This could make it hard to find a home she could afford but may also mean that she will make money when she sells.
— Patient will research the Portland housing and rental markets.
— There are “new doctor” loans that she may be able to qualify for but she will need to call several banks to find a good rate.
#Retirement Savings – Saving and investing for the future now is critical because of the “time value of money.” This means that saving a little now will hopefully turn into enough later that she won’t have to keep arguing the benefits of vaccinations when she is 90. Finishing residency at 34 puts her behind and she will need to catch up. Fortunately, she has a long timeframe and will have a secure job in five years so she can probably invest more aggressively. (She will talk to her financial planner about how much risk she can handle!) As an example, we discussed that the stock market does fluctuate but that a baseline annual return of 5-6% is pretty reasonable expectation over her 30-year timeframe.
— For now the patient will look into starting a Roth Individual Retirement Account (Roth IRA) after her Emergency fund is established.
— She will compare a Roth IRA to any retirement plans available through her residency program.
#Student loans – There are many repayment options. Perhaps it is best to pay the minimum now and plan to have the balance forgiven in 10 years. Another option is to refinance the loans to a lower rate and set aside automatic payments.
— The patient will find out if her residency in Portland qualifies for loan forgiveness.
— If the loan forgiveness program goes away or is capped in the next few years she absolutely should refinance.
— She will then compare her student loan interest rate with the annual rate on her investing to prioritize her money after finishing residency.
#Car – Patient will drive her Explorer into the ground.
New doctors have committed themselves to an unusual and sometimes frightening financial position. I suspect other healthcare providers are in the same boat. Just like a medical plan for a 69-year old VA patient, a young doctor’s financial health care plan needs to be customized to their needs. We are taught to refer our patients to specialists when we need extra help. Likewise, we shouldn’t hesitate to seek help and wisdom when sorting our own financial health plan. I am 100% certain that having a solid financial plan will help with burnout, personal relationships and overall comfort. I also believe that having a plan makes it more likely that my financial goals will be achievable.
“AAMC Final Report.” Nov 2016. Survey of Resident/Fellow Stipends and Benefits Report 2016-2017. Association of American Medical Colleges. 19 Jan 2017 <https://www.aamc.org/download/471828/data/2016stipendsurveyreportfinal.pdf>.
AAMC Store. Oct 2016. Association of Amercian Medical Colleges. 19 Jan 2017 <https://members.aamc.org/eweb/DynamicPage.aspx?Action=Add&ObjectKeyFrom=1A83491A-9853-4C87-86A4-F7D95601C2E2&WebCode=ProdDetailAdd&DoNotSave=yes&ParentObject=CentralizedOrderEntry&ParentDataObject=Invoice%20Detail&ivd_formkey=69202792-63d7-4ba2-bf4e-a0da41270555&ivd_cst_key=00000000-0000-0000-0000-000000000000&ivd_cst_ship_key=00000000-0000-0000-0000-000000000000&ivd_prc_prd_key=520D61F6-83AA-4391-AE72-C0C6A38EAC46>.
MGMA. AAMC. 2016. Association of American Medical Colleges. 19 Jan 2017 <https://students-residents.aamc.org/financial-aid/article/starting-salaries-physicians/>.