Starting your internship means that, after years of study, you are finally earning an income and beginning your career as a doctor. It's the ideal time to develop one of the most important long-term habits for your financial wellbeing: building a financial safety net.
Most interns understandably focus on paying off debt, finding somewhere to live or enjoying the financial freedom that comes with receiving a regular salary.
However, we encourage you to start setting aside money for one purpose only: protecting you if something unexpected prevents you from working.
Why a safety net matters
For many doctors the greatest financial risk early in their career is not a lack of income. It is the absence of accumulated leave and savings.
In your first few years of practice, you are unlikely to have built up substantial personal leave, annual leave or long service leave entitlements. At the same time, you may not yet have enough savings to comfortably manage an extended period without an income.
While most doctors will never need to rely on an emergency fund, every year AMA Victoria supports doctors who unexpectedly find themselves unable to work because of illness, injury, an accident, family circumstances or regulatory matters that require time away from practice.
Some have family who can provide temporary support or a place to live. Others do not. Once available leave has been exhausted, some doctors find themselves relying on very limited financial assistance while trying to navigate an already stressful situation.
Financial stress can make an already difficult period significantly harder.
Start building an emergency fund as early as possible
In previous articles we have recommended considering income protection insurance and private health insurance as important investments in protecting your career and your future. Both can play an important role in your financial security.
However, many income protection policies have waiting periods, commonly around three months, before benefits become available. That means you may still need to support yourself for a significant period before any insurance payments commence.
For that reason, we encourage interns to start building an emergency fund as early as possible. Even setting aside a small amount from each pay can make a meaningful difference over time.
As a practical goal, aim to build a financial safety net that could cover your essential living expenses for at least three months – ideally six months, if circumstances allow.
Hopefully you will never need to use it. But if life takes an unexpected turn, having that financial buffer can provide security, choices and one less thing to worry about while you focus on getting back on your feet.
Mardi O’Keefe is the Director of Engagement & Professional Growth at AMA Victoria.
Important: This article is intended to provide general information only and should not be taken as financial advice. Every person's financial circumstances are different. We encourage you to seek independent advice from a qualified financial adviser or accountant before making decisions about savings, insurance or your broader financial planning.