Living like a resident

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pedstar09

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  1. Medical Student
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So, going over my finances for the next year, here is the breakdown I can get:

Monthly income: ~3700

- Living expense: ~2800
- Rent: 1200
- Groceries and shopping: 1000
- Internet: 50
- Electricity: 100
- Transportation: 100
- Other amenities: 300

- Debt reduction: ~600
- Car payments: 250
- PAYE: 300

- Savings: ~300
- Savings account: 200
- Roth IRA: 100

These numbers are for a 2 person household where the other person is still a student.
Am I saving enough? What are recommendations of those who just started out as an intern and had to make a budget for the first time in their life?
 
You might have qualifying payments of $0 for income-driven repayment plans, if your most recent taxes were used to calculate it (assuming you have been a medical student and earned no money). This obviously won't help with accruing interest but I'm banking on Public Service Loan Forgiveness.
 
I just lumped all my groceries/entertainment/shopping/restaurants/amazon/etc in this category. I can also label this as "credit card bill"
 
Use your grace period to save up an emergency fund of at least $2k before you start contributing to a Roth. I would also consider shaving a little more off your expenses to save a little more each month, whether it is a Roth IRA or savings account. Your max monthly savings for a Roth are about $450, and you should take advantage of that as much as you can while you still have a relatively low tax rate.
 
Monthly income: ~3000 (actually 3400 but like a buffer because I'm neurotic)

- Rent: 1050
- Groceries: 200
- Internet/cable: 125
- Electricity: 50
- Transportation (gas): 200
- Cell: 90
- Car ins.: 78
- Car payment: 155 (no longer have the payment but keep it as a buffer)
- IBR: 500

I think that comes out to 2450. I allot myself the 3000-2450=550 for discretionary. I haven't been sticking to the budget as much lately because I've faced a lot of big professional expenses etc such as conferences and airfare and boards.

That said, because I have so many buffers it works out.

As far as investments, I wait for the market to go low and then dump 5500 into my Roth. It's never been an issue. My bank account recovers after a month or two if I have some big purchases and then increases. Your final year see if you can get any sign on bonus before you start, when you sign, because it's very helpful.
 
mvenus929 said:
Use your grace period to save up an emergency fund of at least $2k before you start contributing to a Roth. I would also consider shaving a little more off your expenses to save a little more each month, whether it is a Roth IRA or savings account. Your max monthly savings for a Roth are about $450, and you should take advantage of that as much as you can while you still have a relatively low tax rate.
Click to expand...
Contributing to a Roth before your emergency fund is actually not unreasonable. You can always withdraw contributions to a Roth penalty-free regardless of how old you are, so it acts as a de-facto emergency fund in addition to being retirement savings (until you have a separate emergency fund saved up).
 
wow, rent is so high for you guys!
I could rent a house for about 600 where I'm at!
 
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I will be filing jointly with my wife who will still be a student next year. My estimates online suggest that I will be paying 300/month in PAYE. What other factors determine monthly payment for that? I would love to get $0 monthly for payment eligible plans!
 
Don't you guys contribute to a 401k as well?

And what mutual fund do you choose to put your Roth IRA money into?
 
DrMeowMeow said:
Don't you guys contribute to a 401k as well?

And what mutual fund do you choose to put your Roth IRA money into?
Click to expand...
I contribute some to a 403(b), which is the equivalent of a 401(k) if your employer is a nonprofit, but (unless your employer offers a match) maxing out the roth should be your first priority re: retirement saving as a resident. Your tax rate will never be lower than it is now, barring some very unusual circumstances ever occurring (see: Ted Cruz's plan with a flat tax and a huge VAT, which has <0 chance of ever happening).

If there's money left over (or your employer offers a match), put it in the 403(b)/401(k).

Mutual fund wise, I just put my Roth money into a mix of 2/3 Vanguards Total Stock Market (VTSAX) and 1/3 Total International Stock (VGTSX). I'm young enough I'm eschewing a bond fraction in that account for now. There's a million other good options, see here for 150 that can be decent starting points to think about. Just about any low cost mutual funds (usually index funds) can have some kind of reasonable argument made for them.
 
Raryn said:
I contribute some to a 403(b), which is the equivalent of a 401(k) if your employer is a nonprofit, but (unless your employer offers a match) maxing out the roth should be your first priority re: retirement saving as a resident. Your tax rate will never be lower than it is now, barring some very unusual circumstances ever occurring (see: Ted Cruz's plan with a flat tax and a huge VAT, which has <0 chance of ever happening).

If there's money left over (or your employer offers a match), put it in the 403(b)/401(k).

Mutual fund wise, I just put my Roth money into a mix of 2/3 Vanguards Total Stock Market (VTSAX) and 1/3 Total International Stock (VGTSX). I'm young enough I'm eschewing a bond fraction in that account for now. There's a million other good options, see here for 150 that can be decent starting points to think about. Just about any low cost mutual funds (usually index funds) can have some kind of reasonable argument made for them.
Click to expand...
Wow, kinda got map shocked at the portfolio options. I'm an incoming M1 trying to get savvy with investments, any recommendations besides WCI, Bogleheads?
 
Dr Tony T. Chopper said:
Wow, kinda got map shocked at the portfolio options. I'm an incoming M1 trying to get savvy with investments, any recommendations besides WCI, Bogleheads?
Click to expand...

For a beginner, the targeted retirement funds are safe and varied enough. As you learn more about the different funds, you can shift from that to something else.
 
I heard Roths were no good because once you hit attending then it's no good to contribute to anymore? I dunno I don't know much about investing at all just threw it out there if there's anything to it or so interested ppl can doublecheck that

Definitely look into what medical expenses will be and budget your premium (usually small) but keeping in mind deductible, copays, dental, vision, and if there is an HSA as that can help you with taxes too (if you know you will have to spend 3K this year on that stuff and it can be paid out of your HSA, then putting it into the HSA that will be income deducted for your taxes) but also keep in mind that money in the HSA can only go for some things and not *everything* med related, and that it doesn't roll over next year

Get some really good own-occupation disability insurance, not just what the program provides, read the fine print
preferably something that would kick in if you couldn't do your specialty, some if you can do *anything* with that MD will not kick in (and MDs without a full residency even just an intern year.... well it sucks)
No resident expects to be crippled by MS almost overnight until it happens
 
Crayola227 said:
I heard Roths were no good because once you hit attending then it's no good to contribute to anymore? I dunno I don't know much about investing at all just threw it out there if there's anything to it or so interested ppl can doublecheck that

Definitely look into what medical expenses will be and budget your premium (usually small) but keeping in mind deductible, copays, dental, vision, and if there is an HSA as that can help you with taxes too (if you know you will have to spend 3K this year on that stuff and it can be paid out of your HSA, then putting it into the HSA that will be income deducted for your taxes) but also keep in mind that money in the HSA can only go for some things and not *everything* med related, and that it doesn't roll over next year

Get some really good own-occupation disability insurance, not just what the program provides, read the fine print
preferably something that would kick in if you couldn't do your specialty, some if you can do *anything* with that MD will not kick in (and MDs without a full residency even just an intern year.... well it sucks)
No resident expects to be crippled by MS almost overnight until it happens
Click to expand...
Roths have an upper income limit for contributions, but there's a way to continue contributing even as an attending. It's called the "backdoor" roth IRA and most attendings can easily take advantage of it. The only exception is if they happen to have any significant contributions in a traditional IRA that they can't roll over to a 401(k) to whatever reason (and thus they run into the "pro-rata" rule)
 
I don't see health insurance, medal expenses, or educational expenses ( books/subscriptions / step 3 cost) in your budget. I'm assuming you subtracted payroll taxes in your monthly income. Also, do you have pets that you need to pay a sitter for when you're on call? It used to cost me $100 month to have someone walk my dog so it didn't pee all over my apartment.


Sent from my iPad using Tapatalk
 
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Thanks! I definitely need to budget for those. My health insurance will be from the hospital and I will deduct my insurance from the pay.
The hospital gives certain amount and I do have some amount saved up that I will use for books/step 3 cost.
I will be buying my life insurance with that money as well (at least for the first year). I dont have any pets.
Thanks! 🙂
 
pedstar09 said:
So, going over my finances for the next year, here is the breakdown I can get:

Monthly income: ~3700

- Living expense: ~2800
- Rent: 1200
- Groceries and shopping: 1000
- Internet: 50
- Electricity: 100
- Transportation: 100
- Other amenities: 300

- Debt reduction: ~600
- Car payments: 250
- PAYE: 300

- Savings: ~300
- Savings account: 200
- Roth IRA: 100

These numbers are for a 2 person household where the other person is still a student.
Am I saving enough? What are recommendations of those who just started out as an intern and had to make a budget for the first time in their life?
Click to expand...

Groceries and shopping: 1000
This seems very high. Why are you buying so much material stuff? Groceries should be closer to 500 USD per a month for two people

- Other amenities: 300

-____-
 
Raryn said:
Roths have an upper income limit for contributions, but there's a way to continue contributing even as an attending. It's called the "backdoor" roth IRA and most attendings can easily take advantage of it. The only exception is if they happen to have any significant contributions in a traditional IRA that they can't roll over to a 401(k) to whatever reason (and thus they run into the "pro-rata" rule)
Click to expand...

The all so mysterious back-door.
 
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