.

[Gilakend]

---

Members do not see this ad.

Agree with a lot of the above. If a single resident in a reasonable COL area is struggling financially, they are to blame. Start adding in stupid high COL, children/spouses where they are the only earner, or other financial obligations (helping out parents, etc.) then it can get tighter. But in most places, I would guess resident incomes are near the median individual income.

Also, you have to keep in mind more than half of medical students come from households making more than 120k per year and about 1/4 from households making >225k. Residency is probably the first time many of those students have supported themselves. Overnight they went from being well off to average. Without changing their lifestyle significantly (to average) they will struggle financially. I know medical students who have lifestyles that my working friends couldn't afford.

 

[24blue8]

Well, UCSF pays PGY1: $64,362; according to CA tax calculator, your take home pay is $49,739; you're looking for a 1800.00 rent for a room in a shared house. Gas is well above 5.00/gallon. Used cars are 50% above last year, with a 10 yer old Ford Focus with 150K miles currently going for 7K.

UCSF and several of the other UCs have housing stipends (almost $1100 a month at UCSF, less but still something at the others) that help offset the cost of rent. Majority at SF don't have cars (bc of the nature of how hard it is to maintain and park a car in the City in general).

 

[nyctopdoc]

100% possible if the resident has student loans that are due immediately upon graduation, resident has a family and is the sole breadwinner. I have a few friends who were struggling like that. If the resident is not allowed to moonlight like this then it's pretty bad

 

[snooper]

UCSF and several of the other UCs have housing stipends (almost $1100 a month at UCSF, less but still something at the others) that help offset the cost of rent. Majority at SF don't have cars (bc of the nature of how hard it is to maintain and park a car in the City in general).

There's another medical school a bit further south where you need a car.

 

[aldol16]

There's another medical school a bit further south where you need a car.

St George's???

 

[Mass Effect]

A resident made a tweet earlier saying that she was living paycheck to paycheck despite her bachelors from Yale and her MD from Harvard (nice humble brag 🙄). It got me wondering though. How common is it for residents to be struggling financially once in residency?

Don't assume this is a humble brag. If this tweet was to the general public, she's making a very good point. We're told study, study, study, education, education, education. We convince everyone they HAVE to go to college or else they'll be on food stamps. And now college is the new high school and we're convincing folks they HAVE to go to grad school. Doctor and lawyer? Rags to riches. While you think of it as a humble brag, imagine what Joe the plumber is thinking. "MD from Harvard and she's poor? How???"

It's also a call out to how abysmal residency compensation is. For many fields, the hourly rate will rival the cleaning staff. If she's in residency in a big city on the coasts, she's likely hurting financially even more than we know.

 

[Mass Effect]

The resident you are describing - who is spending $24,000/year on rent, $6000/year on health insurance, $1600/year on electricity, and $2500/year on transportation - is either supporting a family by themselves or has a spending problem. If you're wondering how people can afford $130/month on electricity and $500/month on health insurance, the answer is they aren't spending anything remotely close to that on those things. It's just a single person's perspective, but to compare myself to your example, rent where I live is within the range you provide, but my combined car/renters/umbrella/health/dental/disability insurance + electricity + gas is a quarter of your estimate.

You're wrong. This was me in residency. My place was a 1-bedroom for $1900/mth, my health insurance was around $600/mth and I spent roughly $2000/yr on transportation. I was very frugal and when I started moonlighting, that's when I could start spending on stuff I wanted. I had no familial support and I wasn't married and didn't have kids. It was just me. My mom asked what I wanted for my birthday and I told her a Costco membership and so I bought food in bulk and it was literally just the essentials. When I began moonlighting, it felt like I won the lottery.

 

[voxveritatisetlucis]

Yes especially with inflation and rent increases.

Fortunately, this will be changing soon as a housing crash seems imminent. NZ sales fell 35% year over year

This will be good for residents. Or at least the ones who didn’t get a doctor loan to buy a house that will soon have negative equity.

 

[Putkernerinthehall]

Yes especially with inflation and rent increases.

Fortunately, this will be changing soon as a housing crash seems imminent. NZ sales fell 35% year over year

This will be good for residents. Or at least the ones who didn’t get a doctor loan to buy a house that will soon have negative equity.

I don't know if I'd count on a housing crash. Maybe in some areas. In the 1970s and early 1980's we had very high inflation but housing prices steadily increased, at least out west. At least that's what my grandpa says.

 

[dienekes88]

A resident made a tweet earlier saying that she was living paycheck to paycheck despite her bachelors from Yale and her MD from Harvard (nice humble brag 🙄). It got me wondering though. How common is it for residents to be struggling financially once in residency?

Probably program dependent.

Can see how things might be tough in NYC or SF. But people make it work.

Also, I'm not sure that residency is a great time to be arguing to save money, but thats not necessarily a popular opinion. I didn't try to save a ton... just tried to pay down my loans and build a small disaster fund. When you finish residency (depending on the specialty). You're about to make in one month what you would be able to save in about 4 years. I think the key to this is to just live like a resident for the first few years as an attending. Though I'm having a hard time convincing my wife of that...

 

[dienekes88]

I'd 100% advocate for 3-4 months worth of an emergency fund and beefing up your HSA a bit if you have one...though this is biased by the fact that I managed to get myself hospitalized during residency and rack up some nice bills that otherwise would have become high interest credit card debt.

IF you can also afford to pay down loans at least to keep up with interest and contribute to retirement while maintaining a decent quality of life (I could - but am single/childless at a well-paying program in a low COL area), do this as well, but I wouldn't advocate sacrificing too much to do so for the same reasons as above.

Absolutely. The size of the disaster fund will vary person to person. But I personally think it is more important to have something liquid to deal with hospitalization, car trouble, or getting an engagement ring than to be saving in retirement. I think people have to tailor their savings strategy to their life situation.

As for loans... consolidate consolidate consolidate. You can bring your interest rate down from whatever 5-8% for federal loans to something like 3.6%.

Money is complicated. And risky. And we are all taught not to care about it, but at the end of the day it has to figure into the calculations. I really regret not becoming more financially savvy early on because I missed out on: gold, tesla, crypto, and a variety of other things that could've meant earlier retirement. Having said that, if you're living paycheck to paycheck... that has to be the last thing on your mind.

 

[ace_inhibitor111]

I can give my exact budget as someone making $61k in a medium-large metro area. A decent apartment in the area is at least $1400. You can find $1200 or below but usually has water damage/mold/other issues.

Take home total - $48k
Rent - $1550 for one bedroom- $18.6k a year
Water/Sewer/Renters insurance - $432 a year
Internet - $60/month - $720 a year
Electricity - $80/month - $1000 a year roughly
Car - $300 a month - $3600 a year
Car maintenance - $400 this year
Insurance - $90 a month - $1080 a year
Phone - $500 a year
Gas - $800 a year driving 15 miles a day
Food - $450 a month- $5400 a year
Health/dental insurance - usually paid for by hospital for most residencies but I wanted better - $1800 a year
Life insurance - $500 a year
Disability insurance - $800 a year
Total expense - $35k

So roughly net positive $13k without paying for student loans and without considering anything fun. Might seem comfortable but going out on a date nowadays costs $50-100 easily. And starting a family or renting a two bedroom would wipe out the extra money really quickly

 

[MD Financial Services Scott]

It won't really move the needle much, but you could change the life insurance to be 10-year term, probably cost $220-250 per year and on your disability, you can do a step rated policy or graded premium structure and you might be able to get that down to $400 a year.

 

[ChordaEpiphany]

Absolutely. The size of the disaster fund will vary person to person. But I personally think it is more important to have something liquid to deal with hospitalization, car trouble, or getting an engagement ring than to be saving in retirement. I think people have to tailor their savings strategy to their life situation.

As for loans... consolidate consolidate consolidate. You can bring your interest rate down from whatever 5-8% for federal loans to something like 3.6%.

Money is complicated. And risky. And we are all taught not to care about it, but at the end of the day it has to figure into the calculations. I really regret not becoming more financially savvy early on because I missed out on: gold, tesla, crypto, and a variety of other things that could've meant earlier retirement. Having said that, if you're living paycheck to paycheck... that has to be the last thing on your mind.

I agree wholeheartedly with most of this, but I'm not sure being more financially savvy would have turned you on to gold, Tesla, or crypto. Even the professionals don't make money by beating the market or finding diamonds in the rough. Professionals make money by collecting fees from people who believe they are capable of beating the market or who want to minimize risk/taxes. There's basically no one who can do it.

Crypto's growth is a remarkable story mostly because anyone could have invested at the absolute start and become a multi-millionaire by simply holding $5 worth of bitcoin. However, it's obviously at a fraction of its supposed potential, if you believe it will reach that potential.

Tesla was a meme stock, and it's valuation (larger than the top 10 automobile manufacturers combined) is laughable... unless you believe that Tesla will become a dominant player in the automobile, energy, and technology sectors.

If you believe in it, there's still far more upside for the next 30 years from these investments than any standard index fund. So I guess I invite anyone here who thinks they are financially savvy enough to make the investment.

Finally, the next crypto/Tesla absolutely exists already, and you can probably put your money in today. I don't think anyone is financially savvy enough to identify these investments and bet the farm on them, let alone med students/physicians who dedicate 60-80 hours/week thinking about things that have nothing to do with finance.

 

[hallowmann]

I mean money is tight supporting a family nowadays as a single income on a resident salary. I wouldn't have said the same 2 yrs ago, but basic living expenses (cost of food, utilities, and gas) have gone up quite a bit since then and resident salary simply doesn't. I manage to squirrel away enough for our Roth IRAs every year, but beyond that, I'm living paycheck to paycheck right now. I had some huge car repair expenses last year and we struggled for months to tighten all expenses before we recovered from it. Its not easy even in a low COL area right now if you have a family. Add in cost of board exams, DEA, and medical licenses which have been on the order of $5500 this year alone for me, and its been a hard 1-2 yrs.

I'm actually quite worried about the few months gap between my training and start of my fulltime job especially with the health insurance costs, but I'm lucky I'm doing some moonlighting, which I hope will cover some things, and I can always withdraw from the principal on my Roths as an emergency fund. Fair to say, I won't be funding any Roths this year any time soon.

 

[voxveritatisetlucis]

I mean money is tight supporting a family nowadays as a single income on a resident salary. I wouldn't have said the same 2 yrs ago, but basic living expenses (cost of food, utilities, and gas) have gone up quite a bit since then and resident salary simply doesn't. I manage to squirrel away enough for our Roth IRAs every year, but beyond that, I'm living paycheck to paycheck right now. I had some huge car repair expenses last year and we struggled for months to tighten all expenses before we recovered from it. Its not easy even in a low COL area right now if you have a family. Add in cost of board exams, DEA, and medical licenses which have been on the order of $5500 this year alone for me, and its been a hard 1-2 yrs.

I'm actually quite worried about the few months gap between my training and start of my fulltime job especially with the health insurance costs, but I'm lucky I'm doing some moonlighting, which I hope will cover some things, and I can always withdraw from the principal on my Roths as an emergency fund. Fair to say, I won't be funding any Roths this year any time soon.

It’s strange to me that banks don’t extend more credit to residents at low rates considering the default rate amongst doctors must be very low

 

[hallowmann]

It’s strange to me that banks don’t extend more credit to residents at low rates considering the default rate amongst doctors must be very low

I certainly could get a loan/line of credit right now if I wanted to (~4-5% interest rates), but I'd have to make sure to get it before I graduate in a few weeks, because it will be based on my current employment. I'd rather not deal with the interest, so I can just pull the principal from the Roth if I needed it. Don't get me wrong, we are OK, but this year so far, every paycheck has been spent on essentials up to when my next one comes. Nothing saved. If we have another sudden hit like last year with the car, its coming out of my Roths from years ago.

 

[DoctwoB]

A single or married/no kids resident should not be living paycheck to paycheck. A resident income is near the median HOUSEHOLD income in the US, so if you can't live on that you have a spending problem more then an earning problem. Even in high COL areas, often the problem is that people expect a higher standard of living then their salary can support. Maybe that means roomates, or a beater car, or eating out less, etc.

Now we can argue whether a resident should have to do those things to not live paycheck to paycheck, I certainly would argue that residents should be paid more. But pay being what it is, that means some sacrifices may need to be made depending on where you live.

There are of course exceptions. If you have kids with either a spouse who isn't in the picture or who is a full time student and you are adding on childcare costs things definitely get tight or impossible. Ditto for supporting parents/elderly family members.. Maybe you have private loans from undergrad/med school that can't go on IBR and are eating most of your take home, etc. But if it's just you? spend less.

 

[hallowmann]

A single or married/no kids resident should not be living paycheck to paycheck. A resident income is near the median HOUSEHOLD income in the US, so if you can't live on that you have a spending problem more then an earning problem. Even in high COL areas, often the problem is that people expect a higher standard of living then their salary can support. Maybe that means roomates, or a beater car, or eating out less, etc...

I would qualify this by saying that >50% of American households are living paycheck-to-paycheck, so it's not surprising that residents are also experiencing this. I agree though, if I were single or didn't have kids, I could probably live off of half of what I'm making.

 

[DoctwoB]

I agree wholeheartedly with most of this, but I'm not sure being more financially savvy would have turned you on to gold, Tesla, or crypto. Even the professionals don't make money by beating the market or finding diamonds in the rough. Professionals make money by collecting fees from people who believe they are capable of beating the market or who want to minimize risk/taxes. There's basically no one who can do it.

FWIW there are people who can consistently beat the market. Buffet did it for so long the odds of it being chance are negligible. I have a few friends managing small private funds that have also done so consistently over ~15-20 years. They do so by buying and holding undervalued companies (Buffet/value style) after identifying said companies through diving deep into financial docs/disclosures.

For all intents and purposes though, this doesn't matter. Because of survivorship bias, most funds that have beat the market will not continue to do so. So while people like this may exist, there is no reason to think that you or I can identify them prospectively. So put your funds on the market.

 

[qwerty89]

I certainly could get a loan/line of credit right now if I wanted to (~4-5% interest rates), but I'd have to make sure to get it before I graduate in a few weeks, because it will be based on my current employment. I'd rather not deal with the interest, so I can just pull the principal from the Roth if I needed it. Don't get me wrong, we are OK, but this year so far, every paycheck has been spent on essentials up to when my next one comes. Nothing saved. If we have another sudden hit like last year with the car, its coming out of my Roths from years ago.

This would be bad. Once pulled out the money cant be put back in for prior years. You would miss out of decades of tax free growth and tax free withdrawals just to avoid a 5% interest (which would be paid back within months of being an attending).

 

[collegestud2013]

A resident made a tweet earlier saying that she was living paycheck to paycheck despite her bachelors from Yale and her MD from Harvard (nice humble brag 🙄). It got me wondering though. How common is it for residents to be struggling financially once in residency?

Not uncommon if they live in a high COL area, are financially supporting other family members, or have a very high loan burden (or a combination of the above). Probably worse nowadays with inflation rates the way they are and salaries not catching up even living in a normal COL area and being single can be tough.

Moonlighting is an option for some but some programs will prohibit it, limit it to only upper level residents, or allow it but you may not be able to easily find a suitable gig nearby (that's at least for clinical work; most programs don't regulate moonlighting for non-clinical work as long as it doesn't affect your primary resident responsibilities). Also, any clinical moonlighting work needs to be reported to your program and counted toward the 80 hour per week ACGME duty hour limit; so it many specialties this limits moonlighting to less busy rotations or vacation, or if in a busy program (eg many Surgical residencies) it will be difficult to find the time to do it.

 

[charamsukh]

I know an ortho resident who was tutoring people on the side to make money

 

[collegestud2013]

Wow, $56-58k. That's worse than I thought. Are the pay ranges specialty-specific ?

For some reason I thought residents started around $65k and by PGY-3 and -4 were up around $75-80k

No, pay is almost always standardized across an institution by PGY level, regardless of specialty. This means a PGY-3 Surgery resident working 80 hours per week will likely make the same base salary as a PGY-3 dermatology resident at the same institution working 45 hours per week.

$75-80k for base resident salaries tend to be only in the high very high COL cities like NYC or San Francisco, and in those cites that's not even close to enough to justify the steep cost of living. Then again, many NYC programs will offer subsidized housing options as well.

 

[Hopefully_a_successful_MD]

A resident made a tweet earlier saying that she was living paycheck to paycheck despite her bachelors from Yale and her MD from Harvard (nice humble brag 🙄). It got me wondering though. How common is it for residents to be struggling financially once in residency?

I think they put the "bachelor's from Yale and MD from Harvard" to reach out to the general public. People associate ivy league education with "high income." It's showing that residents are paid pennies no matter their educational background.

That said, the answer is YES. Look on here and Reddit to find examples of residents living out of their cars, parent's place, or having their spouse taking out loans/working a second job to make ends meet.

 

[dienekes88]

I agree wholeheartedly with most of this, but I'm not sure being more financially savvy would have turned you on to gold, Tesla, or crypto. Even the professionals don't make money by beating the market or finding diamonds in the rough. Professionals make money by collecting fees from people who believe they are capable of beating the market or who want to minimize risk/taxes. There's basically no one who can do it.

Crypto's growth is a remarkable story mostly because anyone could have invested at the absolute start and become a multi-millionaire by simply holding $5 worth of bitcoin. However, it's obviously at a fraction of its supposed potential, if you believe it will reach that potential.

Tesla was a meme stock, and it's valuation (larger than the top 10 automobile manufacturers combined) is laughable... unless you believe that Tesla will become a dominant player in the automobile, energy, and technology sectors.

If you believe in it, there's still far more upside for the next 30 years from these investments than any standard index fund. So I guess I invite anyone here who thinks they are financially savvy enough to make the investment.

Finally, the next crypto/Tesla absolutely exists already, and you can probably put your money in today. I don't think anyone is financially savvy enough to identify these investments and bet the farm on them, let alone med students/physicians who dedicate 60-80 hours/week thinking about things that have nothing to do with finance.

You're obviously correct. The vast majority of people who think they can beat the market are wrong. Moreover, with respect to Crypto and Tesla, Bill Gates agrees with you.

Having said that, I wonder the extent to which you need to believe in a stock in order to make money on it. I wonder in particular about something like the wallstreetbets thing with GameStop. I'm sure a clever person bought the stock when everyone was in a big rush to buy and then sold it at a reasonable time to make a bunch of money. Believing in the stock is probably different from believing that there's someone else who will value it higher tomorrow.

Having said that, I don't have time to figure out what the next crypto/Tesla is, so I primarily put my money in index funds, 529, etc.