COL Considerations

[Kimka83]

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I am making my rank list and am trying not to take finance into account, but some places pay SIGNIFICANTLY more. I don't want to totally screw up my rank list for a few bucks, and maybe I am looking at this the wrong way, but I think it might be a better deal to live somewhere that costs more. Let's say that I want to put a significant amount of my income in residency toward loan payments (aka $1000 a month). If I go to a program in a more affordable location, my take home pay will be proportionally decreased. So let's consider the situation in south vs northeast.

NE - PGY1 salary $56k, take home pay $3300. Let's say I pay $900 a month for rent ($1800 split with SO), no need for car. So after loan and rent I have $1400 for food, utilities, etc

South - PGY1 salary $46k, take home pay $2700. Suppose I pay half as much for rent ($450) in this cheaper area, but there is no public transit here so I have to buy a car, gas, insurance ($300 monthly at minimum). After paying rent, loan, and car I only have $950 for food, utilities, etc.

So is it actually a better financial move to rank the MORE expensive place higher (all other things being equal)? This is sort of blowing my mind. Thoughts?

 

[gutonc]

I am making my rank list and am trying not to take finance into account, but some places pay SIGNIFICANTLY more. I don't want to totally screw up my rank list for a few bucks, and maybe I am looking at this the wrong way, but I think it might be a better deal to live somewhere that costs more. Let's say that I want to put a significant amount of my income in residency toward loan payments (aka $1000 a month). If I go to a program in a more affordable location, my take home pay will be proportionally decreased. So let's consider the situation in south vs northeast.

NE - PGY1 salary $56k, take home pay $3300. Let's say I pay $900 a month for rent ($1800 split with SO), no need for car. So after loan and rent I have $1400 for food, utilities, etc

South - PGY1 salary $46k, take home pay $2700. Suppose I pay half as much for rent ($450) in this cheaper area, but there is no public transit here so I have to buy a car, gas, insurance ($300 monthly at minimum). After paying rent, loan, and car I only have $950 for food, utilities, etc.

So is it actually a better financial move to rank the MORE expensive place higher (all other things being equal)? This is sort of blowing my mind. Thoughts?

I honestly think it's really a wash. Sure, $1400 > $950, nobody will argue that. But COL is more than just rent and commuting costs. Food, utilities, services, etc will cost you WAY more in NYC/Boston/SF than it will in Durham/Houston/SLC (20-50% more depending on what and where).

In the end you'll wind up with more or less the same amount of cash at the end of the month (precious little). Go where you want to go and don't worry about the finances for now.

 

[patch28]

If you are looking to pay down loans or make money during residency, then salary is not what you should be concerned about. You should inquire about moonlighting opportunities with each of your respective programs, and if they even allow it. True this won't help until 2nd year, but a good weekend of moonlighting can more than double your monthly income. Compared to that, a few extra thousand per year in salary is peanuts.

 

[Richspiders07]

I also noticed that sometimes COL didn't necessarily align with pay. I went to a SoCal program that was like 43k for intern year... compared with a program in Texas that was 50k [where there is no state income tax].

How does that work??

 

[patch28]

I also noticed that sometimes COL didn't necessarily align with pay. I went to a SoCal program that was like 43k for intern year... compared with a program in Texas that was 50k [where there is no state income tax].

How does that work??

Residents have no collective bargaining power. If a program in socal thinks (knows) it can get just as good applicants paying 43k instead of 50k, what reason does it have to offer 50k?

 

[babel]

I also noticed that sometimes COL didn't necessarily align with pay. I went to a SoCal program that was like 43k for intern year... compared with a program in Texas that was 50k [where there is no state income tax].

How does that work??

I interviewed at most of the SoCal programs, so I am guessing you are referring to one of the county programs - Harbor-UCLA or USC. At both of these places you are county employees, and as such your income is set by the county. Interns there make $44k vs. $48k for the UC's. As I recall, however, there is a big jump in pay after intern year such that you catch up to the UC's for PGY2 and 3.

 

[plickfu]

I am in exactly the same boat. Firstly, I find it very disheartening that I should feel compelled to make this decision based on pay, rather than fit/training/strength. After some rudimentary number crunching, I concluded that, even with Program A paying ~$5000/yr more than Program B, I would basically come out even-ish (probably a little extra disposable/loan paydown income at Program A). However, what really mucked things up is moonlighting. Residents can moonlight one year earlier at Program A vs Program B, further shifting the income differential substantially.

Honestly, there is probably no right answer. For all intents and purposes, you will probably come out about equal after residency, and you will likely get roughly equivalent training regardless of where you end up. I don't think this is as big of an issue for So Cal vs Bay Area, but you should also consider the advantages that typically (very much IMHO, obviously) accompany living somewhere with significantly higher COL. There's a reason it costs more to live in, say, NYC or SF vs the south or the midwest...