Top 5 Financial Mistakes to Avoid as a New Attending Physician

1. Upgrading Your Lifestyle Too Fast (aka Lifestyle Creep)

You did it! You survived four years of medical school, three to seven years of residency, and for some of you, another year or two of fellowship. Finally, you are going to get paid well for all that training. You’ve been living in cramped apartments, driving a beater, and vacationing in tents instead of hotels. Meanwhile, your high school friends have boats and houses—and didn’t even go to college. After years of delayed gratification, it’s time to reward yourself, right? A new car, big house, lavish vacations, Michelin-rated restaurants. You deserve it! You are a full-fledged attending physician now.

Careful! While all of that might be true, locking in high fixed expenses too early can choke your financial flexibility and slap some golden handcuffs on your wrists—preventing you from saving what you need to retire how and when you want. Although upgrading your lifestyle beyond resident status is reasonable, make sure to build the habit of paying yourself first. Live below your paycheck and follow an intentional savings and investment plan. Your 55-year-old self will thank you.

2. Delaying Investing Until Loans Are Paid Off

The average physician coming out of training has over $200k in student loan debt. Many have considerably more than that. That feels like a heavy burden, and getting that off your shoulders feels like the top priority, right? Not so fast, my friend!

If your interest rates are reasonably low (generally under 5–6%), it’s usually a mistake to delay all investing in favor of paying off loans. Why? Because the power of compounding interest will continue to work in your favor for those early investments well after your loans are paid off. Plus, skipping employer retirement matching is like throwing away free money! A balanced plan that addresses both debt and investing is usually the smarter move.

3. Skipping Disability Insurance After Residency

Your most important and valuable asset as an early career physician is you. Yep, I’m talking about your earning potential. You have invested hundreds of thousands of dollars into it. Why would you ever leave that kind of investment unprotected?

Disability insurance is critical for all young physicians. And you need to secure it before you leave training. There is something called the Guaranteed Standard Issue (GSI) policy which is available to all medical trainees without needing to provide a health history or get a physical exam. This can be automatically converted to a standard individual policy when you are done. But, if you walk out of that residency door without locking that in, you’re on your own.

Once you leave training, your full medical history becomes fair game for insurers. Any new health issue could lead to higher premiums—or outright denial. Get high-quality own-occupation disability insurance in place before graduation. If you add the benefit purchase option (sometimes called the future increase option), you can pay a lower premium now—and increase your coverage later as your budget allows.

4. Rushing Into Homeownership

You just signed the contract for that first attending job. It feels great, doesn’t it? The job seems perfect. The people were so nice to you during the interview, the dinner was great, the hospital was clean, and the town seemed ideal. Time to put down roots and buy that first house, right?

Again, not so fast! According to a recent AMA survey, physicians who finished training in the last six years stayed in their first job for less than two years on average. That means there’s a good chance you’ll want—or need—to leave sooner than you expected.

Buying a home too early can become a financial trap. It often takes five to seven years of property appreciation just to break even on the costs of buying and selling a home (closing costs, realtor fees, moving expenses, etc.). Renting, on the other hand, gives you flexibility—no mortgage, no hassle, and no expensive exit strategy.

Even if you end up loving the job, you likely won’t know the best neighborhoods or school districts right away. Plus, that attending salary can tempt you to buy more house than you really need—or can comfortably afford.

Play it smart: rent first, get to know the area, make sure the job is a good fit, and then buy with confidence.

5. Being Too Conservative—or Getting Too Weird—with Investments

You made the wise financial decision to start contributing right away to your workplace retirement account and capturing that employer match. Your work is done, right? Wrong.

Getting money into your retirement account isn’t enough—you have to actually invest it! Too many people forget that part, and their money sits for far too long in a cash account, losing ground to inflation and not doing anything for their future.

Or maybe you had read somewhere that it was good to have a balanced portfolio of stocks and bonds, so what is more balanced than 50/50? In investing, risk tolerance matters—but so does risk capacity: the ability to take on risk because you won’t need the money for decades. If you are an early attending and you have decades before you retire, your portfolio allocation should be mostly, if not entirely, in stocks.

In the long run, stocks have always outperformed the other asset classes. Because of the power of compounding interest, every 1% increase in portfolio returns could mean hundreds of thousands of dollars more for you down the road. Being too conservative (e.g., all cash or bonds) can stall your growth just when time is on your side.

On the flip side, diving into crypto, real estate syndicates, or other “sexy” alternative investments can also backfire. There’s a reason many of these require you to be an accredited investor—it’s because they carry more risk. Master the basics—401(k), Roth IRA, taxable brokerage—before getting fancy.

Final Thoughts

Your first few years as an attending set the tone for your entire financial future. Avoiding these common pitfalls can give you a massive head start. Build a strong foundation, stay intentional, and if you’re not sure where to begin, consider partnering with someone who understands the unique challenges of physicians just like you.