Wesley Sebacher, CFP®

Debt management is a crucial aspect of financial wellness for physicians. You have invested a significant amount of time and money in your education and training, accompanied by the high costs associated with medical education. This guide aims to provide essential strategies to effectively manage debt and work toward financial independence.  

Understanding Your Debt  

Begin by listing all your debts, including credit cards, auto loans, student loans, and mortgages and provide the interest rate for each respective debt. Create a comprehensive debt summary to effectively construct a repayment strategy. 

Prioritize High-Interest Debt 

Once you have created a debt summary, portion an amount of income that can target your high-interest debt. Prioritize aggressively paying down high-interest debt first, while making the necessary minimum payments on any lower-interest debt. Explore balance transfer options on credit card lines for 0% or low-interest rate options, often these introductory rates are offered for 12-18 months allowing you to reduce interest expenses and increase principal repayment. 

Creating A Budget  

Develop a monthly budget to track your incomes and expenses. Begin allocating a portion of monthly income toward any high-interest debt repayment. Remember to pay yourself first – determine your basic monthly spending needs and begin allocating excess income to retirement savings to work toward financial independence. If you are not meeting your savings goals, identify areas to cut back on spending. 

Building An Emergency Fund 

An emergency fund will provide liquidity to help with any unforeseen expenses beyond your monthly budget. These funds should be held in highly liquid assets, such as cash, money market, or short-term fixed income. Aim to build savings equivalent to three to six months’ worth of expenses. 

Student Loan Repayment  

As a physician, you may be burdened by a significant amount of student loans. Explore repayment options, such as income-driven repayment (IDR) plans or refinancing private loans for better interest rates. Consider public service loan forgiveness (PSLF) programs if eligible and consolidating multiple student loans into a single loan for simplicity. 

Mortgage And Home Equity  

Review your current mortgage interest rate and research refinance options to assess any benefits or risks before refinancing. Home equity can provide a line of credit, which can be used to consolidate any high-interest debt to reduce interest expenses and increase principal repayment. 

Credit Score 

Maintaining your credit score is vital to the ability to borrow and eligibility for lower-interest rate borrowing options. Remember to pay bills in a timely manner to maintain a positive payment history. Keep credit card balances low and avoid maxing out credit limits. And periodically monitor your credit report for accuracy. 

Avoid Unnecessary Debt 

Prioritize needs over wants to avoid accumulating unnecessary debt. Begin making informed financial decisions and save appropriately for any significant purchases. Once your basic needs and retirement savings are covered, excess savings can be used toward enhancing your lifestyle. 

Investment Planning for Financial Independence 

Understand all the retirement savings vehicles that are available to you, such as qualified and non-qualified retirement accounts, along with tax-free and taxable savings vehicles. Diversify your investments and align with your risk tolerance to successfully build long-term wealth and avoid common behavioral mistakes made by investors. 

Professional Advice and Continued Monitoring  

Seeking guidance from a qualified financial professional and fiduciary can aid in devising a financial plan that fits every facet of your financial life. As a physician, your spare time to manage finances is limited and often better spent on enjoyable hobbies or with family and friends. Partnering with a fiduciary who operates as a Family CFO can provide the work-life balance you have earned and reduce the stress that comes with effectively managing most aspects of your financial life. Annual monitoring of your financial plan will help ascertain your goals are achieved and is imperative to your success in reaching financial independence. 


Effective debt management is essential for a physician’s financial well-being. These strategies can help you understand the scope of your financial situation and allow you to construct a plan to achieve financial independence and make wiser financial decisions. Every financial situation is unique, tailor these strategies to your specific needs and goals to help you effectively improve your financial health.  

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