Saving & Budgeting
This rule of thumb says you should have 3–6 months of living expenses set aside in case of emergencies.
What is an emergency fund?
This type of investment represents ownership in a company.
What are stocks?
This term describes the tendency to spend more as your income increases.
What is lifestyle inflation?
This is the federal program that forgives your student loans after 10 years of qualifying payments while working for a nonprofit or government employer.
What is Public Service Loan Forgiveness (PSLF)?
This term describes the tendency of new doctors, dentists, and pharmacists to overspend right after finishing training.
What is lifestyle creep (a.k.a. the “big shovel, big hole” problem)?
This type of savings account usually offers higher interest than a traditional bank savings account.
What is a high-yield savings account OR money market fund?
This type of investment is considered a loan you make to a company or government.
What are bonds?
Many people fall into this trap when they compare their spending habits and possessions to their peers’.
What is keeping up with the Joneses?
This type of interest grows on a loan even if you aren’t actively paying it while in school or deferment.
What is unsubsidized interest?
Disability insurance is especially important for healthcare professionals because their greatest financial asset is this.
What is future earning potential?
A common budgeting guideline suggests spending no more than 28–30% of your income on this monthly expense.
What is housing (rent or mortgage)?
Because prices of goods and services rise over time, this is one of the main reasons people invest—to protect and grow their money’s value.
What is hedging against inflation?
A strong motivator in behavioral finance, this emotion often causes people to sell investments when markets dip.
What is fear (or panic)?
Refinancing student loans may lower your interest rate but usually means losing access to these federal protections.
What are income-driven repayment and forgiveness programs?
This type of retirement account is often available to hospital employees, similar to a 401k but for nonprofits.
What is a 403(b)?
This type of account is often used by healthcare professionals to save for medical expenses with tax advantages ("triple tax-free").
What is a Health Savings Account (HSA)?
This type of mutual fund or Exchange Traded Funds automatically mirrors a market benchmark like the S&P 500.
What is an index fund?
According to research, most millionaires live below their means and practice this spending habit.
What is frugality?
This type of student loan is backed by the government and usually offers lower interest rates and more repayment options than private loans.
What are federal student loans?
This type of malpractice-related insurance is required to protect against patient lawsuits.
What is professional liability insurance (or malpractice insurance)?
This budgeting strategy allocates 50% of income to needs, 30% to wants, and 20% to savings/debt repayment.
What is the 50/30/20 rule?
This investing strategy involves spreading money across different asset classes to reduce risk.
What is diversification?
This common cognitive bias leads investors to believe past winners will continue to perform well in the future.
What is recency bias?
This strategy involves making payments toward the loan with the highest interest rate first, saving money in the long run.
What is the avalanche method of debt repayment?
Because doctors, dentists, and pharmacists often graduate with six-figure debt, their financial success depends heavily on this skill just as much as their income.
What is managing debt wisely (or debt management)?