Running a medical practice in Canada means balancing clinical care with smart business planning. One of the most overlooked (but incredibly vital) financial tools? An emergency fund. It’s not just a safety net—it’s your peace of mind when life throws curveballs.
Whether you’re facing unexpected staffing shortages, a sudden equipment breakdown, or a gap in billings, having the right emergency fund in place can keep your practice running smoothly without dipping into credit or personal savings.
Why Every Doctor Working in Canada Needs an Emergency Fund
Emergencies aren’t always dramatic. Sometimes it’s just a billing delay from a provincial health plan or the rising cost of rent in your clinic space. Without cash on hand, small interruptions can snowball into larger financial headaches.
According to the Financial Consumer Agency of Canada, an emergency fund gives business owners like you a buffer, helping cover essential expenses during unpredictable times.
How Much Should You Save?
There’s no one-size-fits-all number, but here’s a healthy rule of thumb:
- 3 to 6 months of core practice expenses.
This includes rent, salaries, insurance, utilities, and any recurring payments.
If your clinic has higher fixed costs (specialty equipment leases, multi-physician payrolls), you might want to lean toward the 6-month end—or more.
Example: If your monthly clinic overhead is $20,000, your emergency fund should ideally sit between $60,000 to $120,000.
Also consider your personal situation—do you have other savings? Dependents? A dual-income household? These all factor into how much cushion you really need.
Where Should You Keep It?
Keep your emergency fund:
- Accessible but separate from your main business account.
- In a high-interest savings account or a short-term GIC that allows you to access cash without penalties.
Avoid investing this fund in stocks or long-term instruments—it’s about liquidity, not growth.
Start Small, Stay Consistent
If saving $100k sounds overwhelming, start small. Automate contributions from your practice’s operating income each month—even $1,000 a month gets you to $12,000 in a year. Consistency is key.
What This Means for Your Practice
An emergency fund isn’t a luxury for medical professionals—it’s a must-have business tool. It protects your ability to care for patients and keeps your practice stable in uncertain times. With the right planning, you can build this safety net without compromising growth.
Ready to set up a smart emergency fund plan tailored to your medical practice?
Let’s talk strategy. Reach out to MedTax today to build a financial foundation that gives you peace of mind—and lets you focus on what you do best.
