Where Should Your Money Go? A Simple Framework for Advanced Practice Providers
Where Should Your Money Actually Be Going?
A simple blueprint for Physician Associates and Nurse Practitioners who want to make sure they're saving in the right places.
One of the most common questions I get from Advanced Practice Providers is some version of "am I even saving in the right areas?"
It's a great question — and the answer starts before you ever think about investments.
Start with your cash flow.
Before anything else, you need to understand what's coming in, what's going out, and what's left over. That monthly surplus (or lack of one) is what we're working with.
If you're breaking even every month, the first step is figuring out why. More often than not, it's not your fixed expenses — it's the variable ones.
Subscriptions you forgot about, eating out more than you realized, small leaks that quietly drain a few hundred dollars a month. Clean those up first, and suddenly you have something to work with.
Once you know your surplus, the real question becomes: where should it go?
Think of it as three buckets. Each one has a job.
Bucket #1 — Your Short-Term Bucket (Start Here)
If you're in what I call the "messy middle" — young family, buying a home, building your career — life is expensive and unpredictable. This bucket is your financial cushion.
We're talking a few months of expenses sitting in an interest bearing savings account, ready for the medical bill, the car repair, the unexpected home issue.
Here's something I see a lot: Advanced Practice Providers who have stacked way more cash than they need here because a big bank balance feels safe. I get it.
But past a certain point, that money is sitting idle when it could have the potential to be growing. Which brings us to bucket two.
Bucket #2 — Your Financial Independence Bucket (The Most Overlooked One)
This is the bucket most people skip — and it's a mistake.
Think of this as your optionality account.
It's designed for long-term growth but stays accessible when life calls for it. The overseas trip.
The second home. Retiring a few years early. A sabbatical.
This isn't your emergency fund and it's not your retirement account. It lives in between, and it gives you flexibility that a maxed-out 403(b) simply can't.
Bucket #3 — Your Long-Term Bucket (You Probably Already Have This One)
This is your 401(k), 403(b), Roth IRA — the retirement accounts you're likely already contributing to.
The goal here is long-term growth to supplement your income in retirement. Keep contributing.
But don't let this be the only place your money goes.
So how much is enough?
If you're earlier in your career, targeting a 15–20% savings rate puts you in a really strong position. If you’re in the middle or later stages of your career, this number could be higher or lower depending on what you currently saved.
At minimum, make sure you're capturing your full employer match — that's free money.
Anything beyond that? Before you pile more into your retirement account, ask yourself: is my short-term bucket funded? Do I have anything in my financial independence bucket?
I work with a lot of Advanced Practice Providers who are doing a great job saving — but almost all of it is locked in a 403(b) with very little liquidity or flexibility outside of that.
High savings rate on paper, but not a lot of options when life happens.
The goal isn't just to save more. It's to save smarter — in the right places, in the right order.
A simple blueprint for Physician Associates and Nurse Practitioners who want to make sure they're saving in the right places.
One of the most common questions I get from Advanced Practice Providers is some version of "am I even saving in the right areas?"
It's a great question — and the answer starts before you ever think about investments.
Start with your cash flow.
Before anything else, you need to understand what's coming in, what's going out, and what's left over. That monthly surplus (or lack of one) is what we're working with.
If you're breaking even every month, the first step is figuring out why. More often than not, it's not your fixed expenses — it's the variable ones.
Subscriptions you forgot about, eating out more than you realized, small leaks that quietly drain a few hundred dollars a month. Clean those up first, and suddenly you have something to work with.
Once you know your surplus, the real question becomes: where should it go?
Think of it as three buckets. Each one has a job.
Bucket #1 — Your Short-Term Bucket (Start Here)
If you're in what I call the "messy middle" — young family, buying a home, building your career — life is expensive and unpredictable. This bucket is your financial cushion.
We're talking a few months of expenses sitting in an interest bearing savings account, ready for the medical bill, the car repair, the unexpected home issue.
Here's something I see a lot: Advanced Practice Providers who have stacked way more cash than they need here because a big bank balance feels safe. I get it.
But past a certain point, that money is sitting idle when it could have the potential to be growing. Which brings us to bucket two.
Bucket #2 — Your Financial Independence Bucket (The Most Overlooked One)
This is the bucket most people skip — and it's a mistake.
Think of this as your optionality account.
It's designed for long-term growth but stays accessible when life calls for it. The overseas trip.
The second home. Retiring a few years early. A sabbatical.
This isn't your emergency fund and it's not your retirement account. It lives in between, and it gives you flexibility that a maxed-out 403(b) simply can't.
Bucket #3 — Your Long-Term Bucket (You Probably Already Have This One)
This is your 401(k), 403(b), Roth IRA — the retirement accounts you're likely already contributing to.
The goal here is long-term growth to supplement your income in retirement. Keep contributing.
But don't let this be the only place your money goes.
So how much is enough?
If you're earlier in your career, targeting a 15–20% savings rate puts you in a really strong position. If you’re in the middle or later stages of your career, this number could be higher or lower depending on what you currently saved.
At minimum, make sure you're capturing your full employer match — that's free money.
Anything beyond that? Before you pile more into your retirement account, ask yourself: is my short-term bucket funded? Do I have anything in my financial independence bucket?
I work with a lot of Advanced Practice Providers who are doing a great job saving — but almost all of it is locked in a 403(b) with very little liquidity or flexibility outside of that.
High savings rate on paper, but not a lot of options when life happens.
The goal isn't just to save more. It's to save smarter — in the right places, in the right order.