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Earlier this year I announced my pregnancy and listed a few financial considerations along with it. Now that I am in the final stretch I thought I'd put together a financial checklist for those who are planning to have kids and for those who are currently pregnant! A few things that are unique to us physician women:
- Most of us won't become stay at home moms so will need to pay for high quality childcare or have a stay at home spouse/partner.
- Many of us do not get paid leave. This will definitely affect inflow and one must plan accordingly.
- Many of us are the breadwinning partner.
Ideally, certain things should be in place prior to becoming pregnant. So even if you're single and young I recommend you get some term life insurance now and disability insurance. You'll never be as young and healthy as now. Unfortunately, certain normal aspects of pregnancy such as a c-section, miscarriages and IVF are counted against you. Gestational diabetes, preeclampsia and postpartum hemorrhage can also ding you a few health classes as well.
As you know, there is never a right time to have kids but financially, the best time to have kids is as a medical student or resident. Why? You don't make much if at all so the income loss, if any, is minimal. Childcare can obviously be an issue financially in these lower income years. As an attending, every week you're not getting paid hurts that much more.
As an attending, you'll need to accept the fact that you will likely make less during pregnancy, during your leave, and even after your leave. This is due to how practices usually pay you and adjust your pay for time not seeing patients. Brace for impact.
As an attending, you'll need to accept the fact that you will likely make less during pregnancy, during your leave, and even after your leave. Click To TweetThings to think about before your first attempted pregnancy:
1. Before you sign that first attending job contract find out what happens when you take leave:
- Find out if you get any paid leave. Large hospital employers tend to have paid maternity leave by using a short term disability plan. Find out the terms of this. If you are pregnant prior to starting the job, you may not be eligible. You may also need to work there a certain amount of time prior to being eligible.
- Find out how taking leave affects your salary (if you need to make up a deficit for example) and find out how it will affect your bonus structure. Some employers will adjust target RVUs/collections and some don't – meaning you'll have to make up a sizeable deficit before you bonus again. There is a huge difference! I always recommend having a lawyer review your contract and definitely ask about this.
2. If you live in California, Rhode Island, and New Jersey, or New York (as of Jan 1, 2018), you may be eligible for state sponsored paid maternity leave. It won't replace your physician salary but it is definitely helpful!
3. Family Medical Leave Act (FMLA) – this federal law provides guaranteed job protection for 12 weeks (unpaid) to take care of your newborn. The 12 weeks can be taking at any time within 12 months of having your baby. To be eligible – you need to work for an employer with at least 50 employees and have worked there for at least 1 year. So this does not apply to small private practices.
4. As I mentioned above – get your term life insurance and disability insurances in order before your first attempted pregnancy. Otherwise, you may get a pregnancy exclusion, or worse, you develop gestational diabetes and your premiums double or more. Your partner should also get these insurances in order as well.
5. Health insurance – find out what your total OOP costs will be. This can range from $0 to several thousand. Definitely keep this in mind when looking at your medical insurance options. This is also another reason having children during residency is often cheaper – you work for a large hospital that often has great medical benefits for trainees. 6. Start hoarding vacation days to use towards paid leave if applicable.
Here is Part 2.
Recommended books:
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Welcome to another installment of Interviews with Real Female Physicians. The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially!
So let's introduce our next woman physician rockstar – Clarissa.
Tell us about yourself:
I am an Internal Medicine trained Hospitalist, mom of 2 preteens and married to my husband for over 10 years. I have been an attending for almost 12 years. I grew up in the South and have chosen to live there as well. I love to read and am finally in a place where time and finances are allowing a healthy travel life. I have always been on the frugal side and have managed to build some wealth this way but have really kicked it in gear this year (partly inspired by Doc Moms Finance Group on Facebook) to really make my money work for me and build wealth more quickly. In the past year, I've cut down on the shifts I have worked but have still been able to save more than I previously had by making smarter and more deliberate choices. I think was born to be an internist and have no qualms about the specialty I picked. I do like the flexibility of hospitalist work in that I can have some very intense periods of patient care and then be completely off. Its taken me awhile to find the right balance but I feel that I have found it in the past year. Having a spouse (or family or hired help) that can really dive in with the child care and housework is really a must for the hospitalist career to work for me. It does involve several weekends, holidays and evenings. I love the flexibility Internal Medicine gives to women even if you don't specialize. You have the most leverage if you can be per diem and don't depend on benefits. The hourly rate for hospitalist is very good and now that I found a schedule that works for me I have no regrets. I often tell medical students to pick a career where they feel the quality of their work and commitment while they are at work won't suffer if they plan to have kids. Although I work less, I am totally committed to my patients when I am in the hospital (this is the reason I picked a shift work type career). I live in a big city in the south. The cost of living is rising but much better than East coast or West coast and the lack of state income tax helps in reducing costs. I don't think I could work as little as I do if I was in a different HCOL area.Did you graduate with student loans?
I was very lucky in that my parents valued education above all else and my education was paid for. I went to a private undergraduate university but finished in 3 years with AP credit. I chose to go to a public state school which helped tremendously too (about 10K a year) . Because I had a certain amount budgeted for living expenses a year, I was careful with that money and often spent less than my colleagues that had loans because I was very debt averse. Knowing the advantage that no student loans gave me, one of my financial goals is to at least pay for the undergraduate education for my children.Financial aspects of kids
I had my first child as I was finishing my residency and my second 2 years after that. In some ways I would have liked to have more but circumstances had us stop at 2 . I also wasn't sure it would be feasible to fund the education of 3 children with my salary. Early on, we had a nanny which was a lifesaver for us. It probably cost us about $2000-2500 a month but the cost was much more reasonable than what I see people paying now. We did this for about 3-4 years. When we moved to our current city, our top priority was to be a great public school zone and we have managed to keep them in public school. This has been one of the number one ways that we have managed to build wealth. If it was the choice between a bad education and paying the cost, I would definitely pay but putting everything in place for them go to great public schools has paid off very well. On a side note, I think the pressure of lifestyle creep is less in the public school crowd (although can still be there if you live in an expensive area). As mentioned before, our intent is to pay for undergraduate education in full for both of our kids.Financial aspects of marriage
I have been married for almost 14 years. My husband and I married at the start of each of our careers. We didn't get a prenuptial agreement because we started out without any significant assets or previous children (first marriage for both). We are both similar in our philosophies– stay away from debt, live below our means and try to give generously when able. I handle 95 % of the finances because I enjoy it and it comes more naturally to me. Also as the primary breadwinner, I am more aware of what is coming in and going out. A few years ago, my husband made the decision to be a SAHD. He was unhappy with his work. Overall (after taxes, child care, etc) it didn't make a significant impact on our finances for him to stay. In general, he enjoys it and ideally, now that our kids are older, he would like some flexible contract work but it enhances both our quality of lives (and our kids) for him to be mainly a SAHD. There is less of a logistical headache with pick ups and summers and we can travel more with my flexible schedule. It definitely can be socially isolating for a man to be a SAHD but I think as more men choose this path, there will be more of a community and more get togethers. It can be emotionally hard to bear the burden of all the family's income but in the end I think the tradeoff is worth it for us. I think the only way it works is if both partners agree that it is the best arrangement.
Have you experienced a financial catastrophe?
My biggest mistake/catastrophe is that I should have signed up for disability insurance early in my career (like right out of residency) before I had any dings in my medical history. Even the most minor things can get you “blacklisted.” Luckily, I have a good policy through my employer but am limited in my job choices until I can become financially independent by my ability to get disability.General Finances
Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?
I handle the finances in our relationship. We have met with advisors a couple of times in the past 5 years and adjusted our big picture accordingly (made sure we had wills, enough life insurance, started a taxable brokerage account) but I do the day to day stuff. Our invested money currently is either in targeted funds for retirement or college or in the Bogleheads portfolio. I keep it super simple.What is your net worth?
Our net worth at this point without 529s is about $850K, this includes equity in our home.How are you saving for FI/retirement?
For retirement, I have contributed max amounts to 403(b) for the past 10 years and get a fairly good match. I am just now wading into my hospital's 457(b) and a taxable brokerage account to augment. I will also be more diligent about yearly Backdoor Roth and spousal Roth IRAs. My 403(b) and Roth IRA is invested in a target fund. My taxable brokerage account is in a Bogleheads-type portfolio (40% bonds, 12% international and 48% total stock market) – it's more conservative because we may use it for short term issues as well . I rebalance the retirement accounts quarterly.One thing you wish you knew:
I waited a year before I started contributing to retirement during my first job and didn't contribute at all during residency so I missed out on free money with employer match that year. I also didn't invest in a Roth IRA like I should have. Other things I wish I had done is just taken a few hours to learn more about investments and expense ratios. We had money from previous jobs just sitting there doing nothing until we consolidated them all and put them in low fee accounts.Do you have insurance?
Long term disability is through my work and I bought a small supplemental policy when I left my job which is not great but is better than nothing. As of now, I thankfully have never had to use my policy.What does FI/retirement mean to you? What does it look like?
Financial independence to me means only working if I want to. I don't have a specific age but hope to get there at about age 55.Do you give to charity? If so, where and why?
We try to give at least $15-20K a year to charity – split between my church, fundraisers for reputable organizations my friends are involved in, Compassion International, kids' school and International Justice Mission. The reasons we give are multifold but from a religious perspective, we are called to tithe. Also, i feel that “to whom much has been given, much is expected.”
Any parting words of wisdom?
It's been a great year of organization and growth for me in the past year (thanks to the invigorating and encouraging community of Doc Moms Financial Group). My top pieces of advice are: Get started early It's easy to let the details overwhelm you. In retrospect, I wish I had started putting money consistently away even if they weren't perfect investments (by this I mean, even just 1 moderately well performing index fund would have been better than letting money languish). Don't let perfect be the enemy of the good. Take the time and effort (not as much as you think) to consolidate accounts It really doesn't take that much time to consolidate accounts and it gives you a lot more insight/wisdom. This year, my husband consolidated all of his accounts into a new Roth IRA. I consolidated my Profit sharing accounts and 401(k)/403(b)s into either Vanguard or my current employer's 403(b). I think this was about 5 different accounts. The people on the receiving end are very helpful. We lost a lot of virtual gains by letting money sit in accounts that were not well invested and charged high fees. Live below your means We are overall pretty good about this but there is always room for improvement. Ignore what people around you are buying and doing. If you looked at my coworkers who have the most enviable lives, they are also the ones with the lowest net worth. It's not worth it. If you can control your costs, it gives you so much flexibility in how much you work, where you can travel, etc. Bargains aren't bargains if you don't need them I have been totally guilty of buying too much off the clearance rack. As a result, I give a lot of clothes away that still have tags on them. I am trying to embrace a more minimalistic mindset. The savings in cost and clutter are amazing. I highly recommend Joshua Becker's “Becoming Minimalist ” blog and Facebook page.And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!
I loved reading Clarissa's story and I hope you did too. She's a pretty wise lady.]]> Read More
Welcome to another installment of Interviews with Real Female Physicians. The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially! So let's introduce our next woman physician rockstar – Amanda.
Tell us about yourself:
I am a soon-to-be 40 year old Pediatric Emergency Medicine physician. I've been married for 6 years with one little girl. I am from California and my husband is from Puerto Rico. We met in medical school and after being together for 7 years, we finally got married. We waited on having kids to be “ready”, and that was a mistake because it was harder than we thought to have a baby. We spent a lot of time dealing with infertility issues. Thankfully, we had pretty good IVF coverage so while we had to pay some of it out of pocket, we were definitely lucky and it didn’t financially ruin us. We trained on both coasts and finally settled in Phoenix, AZ just last year. We had been in NYC for several years and were happy to finally leave for a better quality of life. Our hobbies, like most people, are traveling. I personally like shopping and reading when I’m not so tired! I definitely feel like I picked the right specialty. I love the kids and never know what my shift is going to bring. There’s A LOT to be said about doing shift work and leaving your work at the hospital. My advice would be to do what you love and get paid for it. I have been an attending since 2012, and my husband, a cardiothoracic surgeon, since 2016.
Did you graduate with student loans? How much & what are the interest rates?
I was lucky enough to receive full tuition reimbursement from USC for 4 years of undergrad and 1.5 yr of grad school since my mother worked there. I graduated with around 250k in debt between graduate school and medical school – a combination of federal and private loans. The private loans were at an interest rate of 7%, and those were paid off in full (approx 80k) as a gift from my mother. The remaining – I have been chiseling at it and am finally under the 100k mark at a rate of 2.1275%. My husband graduated with no loans – all paid in full by his parents. We are very lucky because our loan situation is a best case scenario compared to what other physicians face.
How fast (or not) are you paying them off?
Given my interest rate, I am taking my time paying back the loans. We would like to purchase a house in the next few years, so all of our ‘extra’ cash is going towards that. My husband is more debt averse than I am, but between the CFP and myself, we have convinced him that rushing to pay off the student loan is not financially advantageous. I am set to pay them off in 2037, however as my husband reaches his financial peak in the next few years, I anticipate being able to pay them off much sooner.
Financial aspects of kids
When did you have them?
We had our baby girl in 2016. We hope to have another, but we are not sure that will happen given my age. I also have no desire to pursue infertility treatments again, given how unsuccessful they were, and now we have a HDHP which has no infertility coverage.
Are you planning to fund their college expenses?
This is where my husband and I disagree. He wants to fully fund and I’m ok with her taking out some loans. We currently have 2 529s, a UTMA and a Coverdell ESA. There is a possibility of me joining a employer who will fund 75% of her tuition if she goes to an AZ state school. This is 17 years away, so really hard to know if AZ will be our ‘forever’ place.
What are your child care expenses?
We have a nanny and pay her $2600 monthly. I know of too many daycare nightmares and just didn’t feel comfortable with it.
Financial aspects of marriage
Are you married?
Yes we are married.
Did you get a prenuptial or postnuptial agreement?
No – we talked about it but essentially came into the marriage with nothing on both of our ends.
Do you and your husband agree on finances?
For the most part yes. We agree on needing to discuss big purchases and the need to save. (In my mind, for retirement and in his, for our daughter’s education). My husband however is less worried about having enough for retirement. He believes in enjoying his life now because you never know what is going to happen. I however tend to plan for the long-term. This is why we have a CFP because we aren’t always on the same page.
Have you experienced a financial catastrophe?
Thankfully, no.
General Finances
What’s your FI (financial independence) number?
We haven’t decided at this time.
Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?
I handle the $$ and we have a CFP.
What is your net worth?
We are net positive several 100k – our only debt is my loan which is now under 6 figures. This however will change once we purchase a home.
How are you saving for FI/retirement?
We currently have 2 x 401(k)s and 2 x Roth IRAs. Previously, we had 403(b) and a 457(b). We just learned about Roth IRAs last year. We are investing only in equities with very low or no fee index funds.
One thing you wish you knew:
In the medical profession, we take an oath to do no harm. We take our profession very seriously and we make personal sacrifices to help others. We take this for granted and assume that other professionals have the same work ethic and integrity. This is how we get taken advantage of – our financial naïveté coupled with our assumption that other people are honest and have our best interest in mind.
Do you have insurance?
Yes, we have disability, life, auto and umbrella insurance.
What does FI/retirement mean to you? What does it look like?
Freedom and peace of mind. Being able to help our daughter without a second thought.
Do you give to charity? If so, where and why?
We are working on this. My husband would rather give to his immediate family or people that he personally knows who need help than a random charity where those who need it may only see a fraction of the donation.
Any parting words of wisdom?
Don’t assume the same level of competence, honesty and ethics from someone giving you financial advice that you exhibit in your profession.
And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!
I love that Amanda and her husband use a CFP to help mediate their financial differences. This is definitely one of the big reasons to work with one.]]>
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Welcome to another installment of Interviews with Real Female Physicians. The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially! So let's introduce our next woman physician rockstar – Liz.
Tell us about yourself:
Hi. I’m Liz. I’m an academic attending neonatologist 2 years out of fellowship training and I practice in Cincinnati, OH. 70% of my time is devoted to research. My pay is around the 25-30th percentile of other academic jobs in the area. I am married to a wonderful stay-at home-dad (SAHD) husband and we have a 3-year-old daughter with some special needs. I am happy with my specialty because I love my job, but it’s frustrating to get paid less than what most physicians make. Especially as the sole income earner. I’m doing better than general pediatricians, but I’m taking frequent call and dealing with very stressful situations. My colleagues in PICU are paid more and the discrepancy between my pay and adult intensivists is wide. If I had to do it all over again I would have gone into anesthesia or dermatology. I had the grades, board scores, etc, but neonatology had stolen my heart, so I’m in it until I burn out.
Did you graduate with student loans?
I graduated with $250,000 off student loans, most at 6.8% interest rate, that were in forbearance all through training. I do not recommend this. I didn’t know about PSLF until late in fellowship, and that was a terrible mistake. My husband also has about $60,000 in loans that are below 3%. I went to a public medical school specifically to save money. My parents were unable to contribute a dime to college or med school, so that influenced my decision. I had a great education and then went to top places for residency and fellowship. I have fully paid off my loans after a windfall I got after being hit by a car. I do not ever recommend this. I’m heading to a total knee replacement next month. But at least there’s a little silver lining. My husband’s loans are at such a low interest rate that we are slowly paying it off. 
Financial aspects of kids
When did you have them? Are you planning to fund their college expenses? What are your child care expenses?
We have one, and had a lot of difficulty having her, so I am not sure if two is in the future. I do not plan on making their 529s a priority until we are in a better situation with our finances. I did not have any money given to me for my college and I feel like it built a strong work ethic and I had no sense of entitlement. My husband became a SAHD shortly after my daughter was born, so the net cost of that is about $10,000 per year after accounting for lost income and not having to do day care. I had my heart set on public school because both my husband and I are products of public school, but with my daughter’s special needs, I’m not sure what we will do.
Financial aspects of marriage
Are you married? Did you get a prenuptial or postnuptial agreement? Do you and your husband agree on finances?
We are married, no prenup, and we agree mostly on finances and my husband stays at home. He had always wanted to do this and I am mostly happy with this arrangement. Therefore I am the sole breadwinner and it has caused no issues. My husband is the manliest man I know, but also one of the biggest male feminists I’ve met.
Have you experienced a financial catastrophe?
None except we both grew up relatively poor. We were extremely poor until just recently as my husband lost his job several times as I moved across the country to do training. 
General Finances
What’s your FI (financial independence) number?
Our FI number is around 2.5-3 million. We think living off of $100,000 per year is reasonable, which is how we reached that number. I will retire around 65, but probably won’t quit entirely for a few more years after.
Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?
I mostly handle the finances. We have a great fee-only FA we found through the WCI list. She shares our same philosophies about passive investment with index funds. My partner and I both agree on this.
What is your net worth?
Probably around -$200,000 at this point, mostly due to mortgage debt.
How are you saving for FI/retirement?
We are maxing out my 403(b) and 457(b) at $18,000 per account. My work also puts 10% of my total salary into a separate retirement account. I’m using my HSA as a stealth IRA. We have one Roth IRA we’ve funded for one year. We also put part of our e-fund in a taxable account with a more conservative mix of index funds including bonds, international stocks, and total market funds.
Biggest financial failure:
Not knowing about PSLF.
One thing you wish you knew:
Get disability insurance as soon as humanly possible.
St. Lucia
Do you have insurance?
Due to my car accident issues and other health problems, I don’t qualify for any worthwhile disability insurance policies. I have ok long-term disability through work, but it’s only own occupation for 5 years. Still better than nothing. I’ve never had to use it. No life insurance yet, we do have a $1M umbrella policy.
What does FI/retirement mean to you? What does it look like?
FI/retirement means being able to work only when I want to. I’m pretty sure I’ll want to stop all clinical activities once I reach FI.
Do you give to charity? If so, where and why?
I donate monthly to Planned Parenthood and give intermittent donations to social causes I find important.
Any parting words of wisdom?
Get disability insurance as soon as possible, talk about financial goals with your partner before you get married, get a fee-only FA, use an HSA as a stealth IRA.
And finally, where can people connect with you?
You can find me on Twitter as @LizEnlowMD or Facebook Elizabeth Marie.
And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!
I hope you enjoyed reading Liz' story. Her story is not only inspiring but shows that FI is possible even when life throws some unexpected wrenches along the way.]]>
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