Ask the Expert: How to manage financial stress during career transitions

Dear Dr. Jerkins: Between my student loan balance, personal debt and daily expenses, I think I manage my finances pretty well. I was recently asked to become a partner in the practice at which I am employed and am concerned that a new loan to finance the buy-in will add significant financial stress. How can I keep my financial stress low with this career transition?
— Managing Stress

Dear Managing: Financial stress can be a significant burden that can affect every aspect of your life, from professional performance to overall wellness and mental health.

Like you, for many dentists this financial stress begins before you graduate dental school or residency. The average student debt for dental school graduates is about $296,000, according to the Education Data Initiative. You may have also taken on debt for personal expenses, residency tuition or unexpected needs.

According to research by the American Psychological Association, money is a source of significant stress for most Americans, ranking as the second most common source of day-to-day stress after health-related stressors.

You are not alone in your financial stress, but it is important to address this source of stress as it can impact your mental and physical well-being. One study from Financial Health Network found participants with financial stress experienced symptoms like negativity, irritability, difficulty concentrating, back pain and stomachaches.

Needless to say, reducing financial stress when and how you can is important. Moments of financial stress are often inevitable, but reducing long stretches of significant financial stress can benefit your mental and physical health.

As you consider becoming a partner, here are some tips for reducing financial stress:

• Create a detailed budget: It may sound obvious, but a budget can help you understand exactly where your money is going and where you can reduce spending or reallocate funds. Many of us do not do this well, but you need to include both personal and professional expenses in your budget. Make a sample budget that includes the financing you will need for your buy-in to understand how it will affect your overall expenses.

• Strategize debt repayment: As you look to take on more debt, ensure you are paying down your debt in the most effective way. Consider prioritizing paying down high-interest debt first, and consider using income-driven repayment or refinancing for your student loans. Establishing a clear plan for debt repayment can help reduce anxiety and provide a sense of control over your financial situation.

• Speak with an expert: Managing your personal expenses and your professional debt can be complex. A financial adviser who has experience and specializes in dental clients can help you optimize your finances and help you understand the impact of a new loan.

• Choose the right lender: Working with a lender who understands dentists’ unique financial needs can reduce your stress as you obtain and manage a new loan to become a partner or even acquire a practice. A bank with servicing that caters to dentists can provide the support you need to feel confident taking on new debt.

Don’t let financial stress hold you back from your partnership goals. Panacea Financial, the bank built for doctors, by doctors, understands your needs and can help you reach your ownership goals. Learn more at panaceafinancial.com/ada.

Dr. Jerkins is the president and co-founder of Panacea Financial and a practicing physician in Little Rock, Arkansas. Panacea focuses on providing world-class financial services for dentists, physicians and veterinarians through all stages of their training and practice. It offers a full suite of banking and technology solutions specifically built for doctors, by doctors. Panacea is endorsed by ADA Member Advantage as the exclusive provider of practice financing, which includes partnership buy-ins. It is a division of Primis and insured by the Federal Deposit Insurance Corporation.