Identifying Physician Assistant Financial Literacy

Congratulations! You have chosen a great career! Physician Assistant (Associate) remains one of the best career choices in the nation. The unique personalities and professional abilities of PAs combine to create tremendous financial opportunities! Continue your journey by becoming the best version of yourself and establish a basis of financial education. The PAs Guide To Financial Planning is a one-stop-shop for PAs to begin or improve their personal finances!

Physician Assistant Financial Literacy

Study after study has shown the degree of personal wellness and job satisfaction is linked to the level of financial literacy. Don’t be a victim of burnout! AAPA offers many resources regarding PA burnout. Just like burnout, when it comes to personal finance and financial literacy, ignorance is NOT bliss. You have a professional Master’s degree (or soon will) and are very skilled at critical decision making. Do not fall victim to the belief that your master’s degree has given you the knowledge to fully understand and manage your financial situation to its full capacity. 

Financial Literacy (aka financial education) includes:

  • Earning Income
  • Budgeting
  • Paying off Debt
  • Saving
  • Investing
  • Asset Protection

Traditional undergraduate and PA education provides no basic business or financial training. Although PAs have 5-7 years of higher education and make critical, life-altering decisions, PAs are not provided financial education, resources, or the tools to manage their income. A strong financial literacy foundation will support various life goals, including saving for education or retirement, using debt responsibly, running a business, purchasing, AND vacations. 

Financial literacy for PAs is becoming increasingly important as PAs frequently manage their own retirement accounts, trade stocks online, and carry large student loan debt as well as medical, credit, and mortgage debt. There are many “influencers” on Instagram touting financial tips among other various online resources. 

Making Money Does Not Mean You Are Good at Managing Money

In 2020, the average PA income was $113,186. Those with a net worth of $100,000 or more are more likely to have credit card debt than those with much fewer total assets. Do not fall into the trap of working hard to make more money, going farther into debt, and building less wealth. A master’s degree and an income of $100,000-$200,000 is not a guaranteed ticket to financial success. 

Financially literate PAs understand the necessity of being able to financially manage an emergency without using credit. If the engine in your car requires repair, the cost to fix it could be $2,000-$3,000. Not being adequately financially prepared and going into debt to pay this cost is, by definition, financial illiteracy. 

In finance, using the phrase, “I will worry about it later”, generally speaking, will result in poor financial management. Although understanding the stats and facts about money is great, no one has fully grasped financial literacy until they can regularly do the right things with their money that result in the right financial outcomes. There are various ways to achieve Financial Literacy and gain knowledge to begin to understand how to manage money. The PAs Guide to Financial Planning is the perfect first step to gain financial literacy!

It is difficult to identify how many people are actually financially literate. However, if you used the number of people who DO NOT live paycheck to paycheck as the gauge for financial literacy, only about 20% of the population would qualify! Financially literate Physician Assistants have mastered budgeting, emergency planning, and debt. These individuals: 

The Cycle of Debt 

Many PAs had parents who were very poor at managing their money. Kids learn by example and if their parents continued to make poor money decisions, this behavior often gets passed to their children. Many of us never thought twice about taking on $100,000 of student loans to become a PA. You can be the change to BREAK this cycle! Logical, planned financial decisions do not include continuing to live beyond your means. Learned biases from watching those around you can make it more difficult to break the cycle and change your own behavior. Behavioral finance asserts people often make financial decisions based on emotion and cognitive biases. Moving with the herd or “keeping up with the Joneses” typically create poor financial decision-making. It is amazing to hear the rationale people have for spending money. Consider a new graduate PA with $150,000 of school loans who purchases a $40,000 vehicle and purchases a home with less than a 10% down payment. This is an all too common scenario that turns a promising career into a financial nightmare.

Furthermore, Amazon and online shopping has created convenience-induced denial. The charge can be put on a credit card and the item shows up at your door without you even paying for it yet. Buy now, pay later only requires 25% down. This magnifies the ease of debt accumulation and increases the number of unnecessary purchases. 

Do Physician Assistants Need Financial Advice?

Many professionals with advanced degrees feel they do not need help with their finances. Highly educated professionals have spent years of time and loads of money on their education to obtain their desired designation. PAs are highly educated professionals who others come to for advice. The decisions PAs make for their patients can have a significant impact on their life. PAs can prescribe medications and create treatment plans to “fix” patient’s problems. So, they should be able to manage their personal finances, right? WRONG!!! Think about it, for all the important things in life we seek professional help. It takes years of work to become a good PA, among many other important aspects of life. Personal finance for Physician Assistants is no different and should be treated as a priority. Your future self will thank you!

The PAs Guide to Financial Planning should be every PAs first step to gain an understanding of financial literacy. Now is the time to begin properly managing your income, paying off debt, saving for retirement, and protecting your assets. Do not be in your 10th year of practice still paying the minimum payment of your school loans and only matching your employer-sponsored 401k. Take the time to read The PAs Guide to Financial Planning, create a financial plan and be ready to achieve maximum results!

The PA profession continues to evolve with the name change. The future is bright for our profession. Your career is what YOU make it! Don’t let anyone convince you otherwise. Take control over your finances and never look back!

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Andrew Baker, PA-C, MBA
Andrew Baker, PA-C, MBA

Andrew Baker is a practicing PA-C in a Medical and Procedural Dermatology Office located in Ohio. He is a graduate of the University of Findlay Physician Assistant Program in May 2012. He was class President and a member of the National Honor Society, Phi Kappa Phi. As a PA-C, Andrew has worked in Reconstructive Plastic Surgery, Emergency Medicine, and Dermatology.
Andrew always had a passion for helping others. He has mentored and coached many PAs and colleagues who were troubled financially. For the first several years as a PA, his interest in preparing for his financial future continued to grow. He read books, listened to podcasts, attended lectures, and frequently visited with a Certified Financial Planner. He realized personal finance is more than making money, saving, paying off debt, and investing. The financial choices made by an individual can change your family tree! In 2014, Andrew paid off more than $100,000 in student loans.
Personal finance and financial planning became a continued passion with a desire to learn more. In May 2020, Andrew graduated with a Masters of Business Administration (MBA) from the University of Findlay. This education further shaped Andrew’s desire to learn about financial decision-making and specifically how it impacts Physician Assistants. He started PA 4 Finance, a financial advisory company designed for PAs in any phase. Currently, he works with Pre-PAs, PA Students, Practicing PAs and anyone else in the spectrum of the PA profession.

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