Saving as a Resident.

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Glokta

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The average salary for a starting resident seems to be ~45-55k.

a) Could you guys give me an idea of how much your (personally) monthly expenses are and what you're left with in hand at the end of the month?

b) Is it practical to expect to save ~12-14k a year?
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After taxes, you are looking at ~$3000 per month.
Depending on your loan situation, city's cost of living, roommate potential, parking, insurance etc, your costs can vary widely.
 
Glokta said:
The average salary for a starting resident seems to be ~45-55k.

a) Could you guys give me an idea of how much your (personally) monthly expenses are and what you're left with in hand at the end of the month?

b) Is it practical to expect to save ~12-14k a year?
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(a) Income intern year approx 47,000. Expenses and debt intern year approx 47,000. You'll have to do the math -- I pawned my calculator. :laugh:

(b) see a.
 
I'm not a resident yet but will be soon and here are my guesstimates from another thread. There was no rebuttal so I assume they're roughly accurate.

$3k take home after taxes

(a) Monthly expenses
$1225 rent (liberal) + $200 property taxes, HOA, & related fees
$500 for IBR + more for any private loans
$400 on food/drinks (liberal)
$250 for "utilities, smartphone, cable, internet"
$150 car insurance + $100 for gas

Given that a smartphone and internet are unspoken requirements and that the only discretionary spending here is cable and the liberal budgeting of rent and meals, there is only a few $hundred to play with here.

(b) No, it is not practical unless you are moonlighting (which seems to be highly under-reported for obvious reasons and of course can include non-clinical jobs). You could also just live like a pauper and spend $500/mo. on rent, but that still wouldn't guarantee $1k or more/mo. in savings.
 
You could save $12k/yr if you really wanted to - residents in general are TERRIBLE with money. Provided you're not paying rent in one if the major coastal cities, which would make it more difficult to save, but in any case lots of people get by on less than a resident's salary. The average medical resident likes to eat out, go to bars, live in a condo in a "safe" neighborhood, cable TV, smartphone, and a multitude of other luxuries.

I have a pretty bad financial situation, including IBR and private loans, a car note, I live by myself, a long distance relationship (I've flown cross country 5 times this year $$$). I have ~$4k saved this year between my bank account and IRA. Take away the car note and frequent travel and I'd easily have double that. I could do better if I did without a few more things (gym, smartphone, internet). I'm not doing anything extreme, but I rarely eat out or go to bars, and I'm always on the prowl for free food in the hospital. Throw in a roommate, take away some loan burden, and who knows how much I could save. It's all about your situation and what you're willing to sacrifice.
 
Just looked at these numbers, and think these estimates are too low, namely 400 for food, 250 for utilities plus cable/intenet and phone, and 100 for gas (not at $4/gallon). i would also disagree with the premise that living in a 'safe' neighborhood is a luxury. in some cities (ie, the one i currently live in - baltimore), the crime rate in a bad neighborhood is extremely high - just as a trauma surgeon or a forensic pathologist. so sure, you can find places for $400 a month that are basically tiny rooms in a shady area and then save, but you get what you pay for.

you're also not including incidentals, that may not occur monthly, but are significant, namely vehicle maintanence, travel, or clothing.

i think that in some cities a resident could live in 2200-2500 per month, and save a little bit, but 1K would be very tough i think.

one thing i've not seen in this thread so far is retirement accounts through your hospital. employee matching is quite variable, from 0 to 100% matching. if you go somewhere with a good matching program, try to take advantage of it. this is a really, really nice benefit and can significantly increase how much you get to 'save' as a resident. i put that in quotes because this is long-term saving, and you can't access this money early without pretty big penalties. but the power of the employee matching is huge if you're looking long-term.

Dumb said:
I'm not a resident yet but will be soon and here are my guesstimates from another thread. There was no rebuttal so I assume they're roughly accurate.

$3k take home after taxes

(a) Monthly expenses
$1225 rent (liberal) + $200 property taxes, HOA, & related fees
$500 for IBR + more for any private loans
$400 on food/drinks (liberal)
$250 for "utilities, smartphone, cable, internet"
$150 car insurance + $100 for gas

Given that a smartphone and internet are unspoken requirements and that the only discretionary spending here is cable and the liberal budgeting of rent and meals, there is only a few $hundred to play with here.

(b) No, it is not practical unless you are moonlighting (which seems to be highly under-reported for obvious reasons and of course can include non-clinical jobs). You could also just live like a pauper and spend $500/mo. on rent, but that still wouldn't guarantee $1k or more/mo. in savings.
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Where I live is very cheap. And
my car is paid off.

I figured I can save about $15,000 if I spend wisely, which, coming from a responsible blue collar family, I've been trained to do.
 
Now for the other extreme... I'm an intern in a small midwestern city. My take home pay after a small contribution for insurance is about $3200/mo.

Yearly Expenses
3 vacations: $3000
Car repair/maintenance (old car, runs good): ~$1000
Moving (twice): ~$500
Clothing: ~$500
(Per month that's about $425/mo)

Monthly Expenses
Subsidized housing (includes all utilities): $500/mo
Student loans (just over 2% interest): $325/mo
Food (I get breakfast and lunch in the hospital free): ~$300/mo (yeah so I go out a lot and love good beer...)
Cell plan: $70/mo
Car insurance: $60/mo
Gas: $50/mo (estimated... short commute + trips around town)

So my expenses are $1730/mo.

I earned $6000 (pre-tax) in moonlighting as well.

So far I have saved ~$8000 in my program's Roth 403b (no matching 🙁) and $5000 in my Roth IRA (I had already maxed out my 2011 contributions...). I'm also keeping cash on hand for my move. So that's about $15,000 in total savings so far.

I'm not finished internship yet. By the end of the year I will make at least another $3000 in moonlighting plus the rest of my wages. Assuming my car doesn't need any more repairs, I estimate I will save a total of ~$20,000 during my internship.
 
$3200 after taxes

Expenses $1700
Loan payment: $1500

Left over at the end of the month = 0
 
Glokta said:
b) Is it practical to expect to save ~12-14k a year?
Click to expand...

Depends entirely on your family situation (dependents/no dependents) and location.
For me, I was saving around $10-12k a year. Rent was a tiny cheap apartment in a safe enough if not great (between bars - often very loud at night) location, but walking distance to the 2 main hospitals. I bought an old car outright, and thankfully it didn't need any repairs; gas costs were low because I pretty much needed it only for away rotations. Cell phone was call only (no smartphone/data) and local only so the plan was very cheap. I had internet since that's a necessity, but no cable/satellite.
 
During part of my intern year, I lived with family, so I was saving at a rate of $2000/month. Not everyone can or want to do that.

Now I live in my own house, found me a wife, and without moonlighting, I save very little. With moonlighting (after intern year), I'll save over $14k/year.
 
mlw03 said:
Just looked at these numbers, and think these estimates are too low, namely 400 for food, 250 for utilities plus cable/intenet and phone, and 100 for gas (not at $4/gallon). i would also disagree with the premise that living in a 'safe' neighborhood is a luxury. in some cities (ie, the one i currently live in - baltimore), the crime rate in a bad neighborhood is extremely high - just as a trauma surgeon or a forensic pathologist. so sure, you can find places for $400 a month that are basically tiny rooms in a shady area and then save, but you get what you pay for.
Click to expand...

This is just typical resident thinking 🙂 No offense meant, I have many of the same tendencies.

$400 is a generous food budget for a single person. It's not shopping at Whole Paycheck or eating out every night like many residents seem to, but we're not talking Mac n cheese and ramen - far from it.

$100 for gas isn't necessarily unrealistic either if you don't drive a ridiculous car and live within a few miles of the hospital. But nobody likes driving an econobox.

I've lived in cities as dangerous as Baltimore and the residents going broke on rent are only half in it for the safety - they're not living in run-down studios.
 
Dumb said:
Very well-played, sir. Must be hot to be making it rain on top of a cush TY! 😛 If my TY income will be ~53k, is that ~$3,200/mo take home?
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Thereabouts. It depends on things like state taxes and whether they charge you for benefits and how much. For example, you can elect to pay for dental or not, or do you want the good health insurance plan or the cheap one, etc...

It is important to note here that without the moonlighting ($9,000+) and subsidized housing (neither of which is guaranteed for your advanced program), saving $1k or more per month would be impractical.
Click to expand...

I could still save $1k/month pretty easily. The key is that my commute is 2 miles each way and my car gets 27mpg. It's hardly an econobox--it's just an old Subaru AWD. It also depends how much you want to spend on rent. If you share a 2BR in a cheap location, you can get away with ~$500/mo pretty easily. The question is whether you're willing and/or able to live in a cheap location.

As for next year, I'm going to save much less. I made the decision to live it up more where I am going. I'm moving in with my girlfriend, and we can split a place together. But between the two of us (think resident salary x2) without kids we can afford a sweet high rise apartment without any difficulty. Moonlighting goes away. But I'll still save $5000/year in my IRA plus some other retirement money, pay my loan payments, and have plenty of fun money.
 
If you have any debts, make sure your interest from saving/investing will be more than the interest you will accrue on your debts otherwise you're just losing money.
 
Mattchiavelli said:
If you have any debts, make sure your interest from saving/investing will be more than the interest you will accrue on your debts otherwise you're just losing money.
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Very true. At some point soon, I might start putting my money toward my loans rather than savings.

But some people should keep money lying around in the bank for a rainy day (which is more likely when you have a spouse, children, house, and multiple cars). I'd be very unnerved to have less than $10K sitting in the bank.
 
Thank you all. Yes, I was asking specifically in order to try and pay off my student loans as soon as possible since their interest rate is higher than the safer investments.

I will be an IMG (M2 this year) and will only be able to get a high interest private loan for this year and wanted to pay it off completely by the time I finished residency in addition to keeping up with interest payments for the Undergrad direct loans.

My situation will be:

Single (No plans or prospects for marriage anytime soon, if ever)
Daily commute will probably be via public transport or a bicycle and I'll keep a really inexpensive car depending on where I am (will help with the single thing 🙂)
Cable - No
Internet - Yes
Eating out - Maybe 1x a week; eat at the hospital the rest of the time.
Moonlighting - Not easy/likely initially as an IMG. - Any comments on this?
Rent not Buy. Probably won't share the apartment. Will have one dog.

Additional experiences would be welcome
 
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Glokta said:
Moonlighting - Not easy/likely initially as an IMG. - Any comments on this?
Click to expand...
You need a license to moonlight most places. Most states require 2-3 years of completed residency for a IMGs to get a license.

Additional experiences would be welcome
Click to expand...

Frankly, as this thread has shown, the only experience that's going to matter is yours. Some people have a lot of debt, have families with the associated extra expenses and live in expensive places, all of which make saving tougher. Others live in cheap cities/towns, have little/no educational debt, are single, etc, all of which makes saving easier.
 
gutonc said:
You need a license to moonlight most places. Most states require 2-3 years of completed residency for a IMGs to get a license.
Click to expand...

-Should have clarified...I already knew that. I was talking about other opportunities to moonlight...tutoring etc.



gutonc said:
Frankly, as this thread has shown, the only experience that's going to matter is yours.
Click to expand...

-That's true of most things. Even so, it's nice to have an idea of what to expect and have some sort of realistic plan that can be adapted to my needs. The greater the number of responses from varied experiences, the more realistic my plan shall be.
 
Should I start paying into my 401k right away, or is that impractical?

Also, since I live so frugally (always have) and bring in $40,000 after taxes, can I pay off $500 to loans?
 
Paying $500/month toward student loans should be doable for a single person unless you have a huge car payment and/or live in a really expensive city. If you live in a $700 apartment vs. a $1200, that gives you $500 more per month, for example.
My advice is don't go crazy with your spending but I think expecting to save 10k per year is a lot...keep in mind your salary will go up a little every year, but that you'll need to save some money for things like the USMLE and board exams, and maybe your medical license (unless your residency pays for them). Also, if you have to fly around to visit your family that is 300-900 per flight, versus if you can drive to visit them for the holidays, etc.
Especially if you are in a relatively short residency, like 3-4 years, whatever you save now isn't going to make a huge difference in your future lifestyle...it's nice to put some money into retirement and some toward your loans, but your saving an extra 5k/year isn't going to make the difference in your future happiness, and scrimping to save every dime may make you miserable @this point in your life.
 
Where are you guys working that allows you to moonlight? I interviewed at a single program that allowed it, and that was only the last year.
 
dragonfly99 said:
Paying $500/month toward student loans should be doable for a single person unless you have a huge car payment and/or live in a really expensive city. If you live in a $700 apartment vs. a $1200, that gives you $500 more per month, for example.
My advice is don't go crazy with your spending but I think expecting to save 10k per year is a lot...keep in mind your salary will go up a little every year, but that you'll need to save some money for things like the USMLE and board exams, and maybe your medical license (unless your residency pays for them). Also, if you have to fly around to visit your family that is 300-900 per flight, versus if you can drive to visit them for the holidays, etc.
Especially if you are in a relatively short residency, like 3-4 years, whatever you save now isn't going to make a huge difference in your future lifestyle...it's nice to put some money into retirement and some toward your loans, but your saving an extra 5k/year isn't going to make the difference in your future happiness, and scrimping to save every dime may make you miserable @this point in your life.
Click to expand...
I definitely agree. The potential savings of a resident is just a fraction of what you will be able to save when you are in actual practice. I'd rather spend for a few more comforts during residency and not be entirely miserable, then just worry about savings later.
 
I think it's reasonable to argue that the biggest issue with finances during residency is setting up good habits before mistakes get too expensive. A resident's salary is about the average US household. If you can't get on top of your spending enough to max out an IRA, build up an emergency fund, and make regular payments on debt then it seems pretty doubtful that things will go better when you've got even more money to hemorrhage with less immediate incentive to be disciplined and more time to run around spending it...
 
Very interesting and helpful thread. Is it bad practice to defer your student loans in residency? I haven't heard anyone talk about that yet. In my situation my fiance is dentist that has been out of school for 3 years, and she currently makes a really good salary. Would it be counter productive of me to defer my student loans while in residency or should I save my money to put toward a house?
 
DeadCactus said:
I think it's reasonable to argue that the biggest issue with finances during residency is setting up good habits before mistakes get too expensive. A resident's salary is about the average US household. If you can't get on top of your spending enough to max out an IRA, build up an emergency fund, and make regular payments on debt then it seems pretty doubtful that things will go better when you've got even more money to hemorrhage with less immediate incentive to be disciplined and more time to run around spending it...
Click to expand...

👍

A lot of people seem to forget that bolded part.
 
Jape said:
Very interesting and helpful thread. Is it bad practice to defer your student loans in residency? I haven't heard anyone talk about that yet. In my situation my fiance is dentist that has been out of school for 3 years, and she currently makes a really good salary. Would it be counter productive of me to defer my student loans while in residency or should I save my money to put toward a house?
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Depends on your interest rate, and how much interest you'll accrue during residency. If you're in a situation to pay down loans while a resident, more power to you and I'd say go for it.
 
You can't defer government loans anymore as far as I know, it's IBR or forbearance.
 
I haven't had much trouble at all saving during residency. I have put 20000 into my RothIRA and 401K plan over the last 2 years. I get ~2200/month in take home pay (after my 401K, taxes, health insurance, etc).
Monthly expenses--
Mortgage: 500
Alarm: 50
Gas: 60
homeowners in: 60
car insurance: 50
utilities: 150
savings: 100
property tax: 100
Food: 150
Phone/Internet: 70
Various charities: 50
IBR payment: 200

I end up with around $800 extra every month. This ends up going to vacations, house stuff (new roof, sewer repair, etc), car maintenance, BD/Xmas gifts and so forth and into my savings account.

I could easily reduce the amount I spend on food because I go out more than I should. I also save because I don't have cable/dish or a smart phone. I feel like I make tons of money and really can't even imagine what it's going to be like when I'm an attending. Having come from ~30K/year, this 50K is just amazing.

As has been pointed out, many US families are living on less than what a resident makes.
 
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Roguelyn said:
I haven't had much trouble at all saving during residency. I have put 20000 into my RothIRA and 401K plan over the last 2 years. I get ~2200/month in take home pay (after my 401K, taxes, health insurance, etc).
Monthly expenses--
Mortgage: 500
Alarm: 50
Gas: 60
homeowners in: 60
car insurance: 50
utilities: 150
savings: 100
property tax: 100
Food: 150
Phone/Internet: 70
Various charities: 50
IBR payment: 20

I end up with around $800 extra every month. This ends up going to vacations, house stuff (new roof, sewer repair, etc), car maintenance, BD/Xmas gifts and so forth and into my savings account.

I could easily reduce the amount I spend on food because I go out more than I should. I also save because I don't have cable/dish or a smart phone. I feel like I make tons of money and really can't even imagine what it's going to be like when I'm an attending. Having come from ~30K/year, this 50K is just amazing.

As has been pointed out, many US families are living on less than what a resident makes.
Click to expand...

$20/mo IBR payment? How are you pulling that off ?
 
If I can ask a dumb question:

How do Roth IRAs work? How important are they for a three year residency?
 
I think the best way to save money as a resident is to live in a cheaper house/apt. and/or to not have a car payment.
Also, yikes on the 200k loan at 6.8% with 1100/month interest. That is evilness...
you should try to pay something if you can, and not just do forebearance, because that loan will just get bigger and bigger if you don't pay some of the interest...
 
dragonfly99 said:
Also, yikes on the 200k loan at 6.8% with 1100/month interest. That is evilness...
Click to expand...

Wow, yeah. That is horrifying. I only have 25k right now and am wondering how to pay it all off during residency next year. I can't even imagine at the 200k level.
 
When I was a resident...looking to get one again PM me if your program has an opening... but when I was a resident...

Monthly income after taxes $2900 - $3000.

Single at the time...
No Car! Rode a Bicycle in the snow!!
No Cellphone! Used Skype.

Rent - $550 (Included utilities)
Internet - $30
Food - $200
Miscellaneous - $50
Donations - $52
Someother things that I can't remember right now... likely $100 for commuting

I saved 24K a year.

Not saying that I lived wisely... but just presenting my case.
 
And thinks of the buns of steel you got from riding that bike!
 
DocDanny said:
How do Roth IRAs work? How important are they for a three year residency?
Click to expand...

Honestly, look it up. You pay taxes on the Roth IRA income when you put the money in, then owe nothing when you take it out. Thus, you pay tax on your $50k/year income, and can take the principal back out any time without tax (like when you're earning $200k/year or more), plus can take the earned interest out for many different things like first home (up to 10k), college, medical expenses, etc...

I think they're the best investment a resident can make if they have no loans or have a great rate on their loans. I know that applies to almost nobody, but it's a thought.
 
Would you go for the Roth IRA over a 401k w/ employer matching? Or put money in the 401k up to the matching rate and then put anything over that into the roth ira?
 
Sarcoidosis said:
When I was a resident...looking to get one again PM me if your program has an opening... but when I was a resident...

Monthly income after taxes $2900 - $3000.

Single at the time...
No Car! Rode a Bicycle in the snow!!
No Cellphone! Used Skype.

Rent - $550 (Included utilities)
Internet - $30
Food - $200
Miscellaneous - $50
Donations - $52
Someother things that I can't remember right now... likely $100 for commuting

I saved 24K a year.

Not saying that I lived wisely... but just presenting my case.
Click to expand...

Impressive. When i was a resident in philly back in the early 2000s. I only took home $2000 after tax, and I think my rent was $1000. So, I didn't save much. 😛
 
belle54321 said:
Impressive. When i was a resident in philly back in the early 2000s. I only took home $2000 after tax, and I think my rent was $1000. So, I didn't save much. 😛
Click to expand...

You are right... the biggest cost is rent... and if one can figure out a way to get decent housing with low rent you are in a better position to save that cost out right.

Having and not having a car... is debatable and sometime I regret not having had one...

But a cellphone cost was another great thing to save on... my colleagues were paying anywhere from $35 to $60 for a cellphone... First of all as an intern you really don't have a lot of time to talk on the phone... I use to use the hospital phone all the time to make local and long distance with my skype code.
 
I plan on spending every penny during residency while the utility of my money is still high. For instance, yeah maybe I could save $1000 a month for 4 years, saving $48,000 in the process, but I would rather have a nicer house/apartment/life. Why suffer for 4 years when as attendings most of us will make up that $48000, after taxes, within 6 months? So you suffered for 4 years for 6 months additional of work as an attending. I'll take the 6 months.

At the same time, why "save" into a 1% interest account (if you're lucky) when you have loans racking up 6.8%? Good luck getting 6.8% in the stock market or bond market (with no risk). If I didn't spend all my money, the remainder would start going towards my highest interest loans.

So, I will have just enough savings to cover 6 months expenses, no more no less. If I have extra it will go to my loans.
 
Dumb said:
I agree with your general way of thinking. However, it becomes much more than 48k when you factor in the loan interest. You don't just "save" 48k...you pay off 48k of loans at 6.8% interest and contribute to a retirement savings vehicle.
Click to expand...
Yes, but you only live once, and you're only young once. It's important to find a happy medium, which is different for everyone.

I've got a house and a family, so paying down my loans at all during residency is pretty much out of the picture...
 
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