Splurge with tomorrow's income today

[Pkboi24]

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Right now, I have a job at Barnes and Noble, a job tutoring, a job at a townhouse leasing office, and I am also a freelance writer. I work easily between 40-50 hours a week, while making only a measly $1000-$1200/month after taxes. So the other day, during my 15 minute break in the B&N employee's lounge, I got to thinking. If I'm going to be living the next four years of my life on loans and after I get out of residency I'll be making a 6-digit salary, should I even be busting my ass right now for this petty cash? Should I be trying to save on things like generic brand "toasted oats" vs. name brand cheerios? Should I refrain from hitting up one too many happy hour specials? What about that new phone or camera? And let's not forget, dating can also get expensive.

If we get into medical school, it's almost garunteed - almost - that we'll be making more than a decent living. Knowing this, should we cash in on our good fortune now? Or would an early harvest be irresponsible and immature?

Please discuss.

 

[StritchMD2011]

You should live to the extent that you can afford. Remember that you're going to be paying off loans for quite awhile after you are done with residency. One of my neighbors is a pediatric cardiogist (a pretty well-paying specialty) who is in his mid to late 30's and is still living relatively cheaply. He mentioned that he still is in debt...

Smart saving now will pay off once you're older and have a family, which is when you're really going to need cash.

 

[Rafa]

Smart saving now will pay off once you're older and have a family, which is when you're really going to need cash.

Yup.

 

[foofish]

You should live to the extent that you can afford. Remember that you're going to be paying off loans for quite awhile after you are done with residency. One of my neighbors is a pediatric cardiogist (a pretty well-paying specialty) who is in his mid to late 30's and is still living relatively cheaply. He mentioned that he still is in debt...

That's true for many doctors...you finish paying off your school loans right around when you have to take out loans to send your kids off to college....

Hmmm...my state school sounds better and better....

 

[Allie86]

The way I see it.. 100 grand bares a close resemblance to 120 grand. Hell, they're practically indistinguishable. The quality of your life between the two, however, isn't. The 100 is for school, the 20 is for making you the kind of person that can still go through it and come out of it with a reasonable amount of sanity.
That 6 figure doesn't have to be exclusive for the quality of your life after, before is just as important--'Young once' and what not.

Point is.. live in moderation, deny yourself nothing--within reason. Forego the camera, get a phone with a camera..
Live.

 

[somemaybedoc]

I think it depends on the kind of debt and how much splurging. Credit card debt...no oh god no. Student loan debt... up to you, but I imagine I would hate getting eaten on interest enough to conserve if I was in the sort of position where I would be borrowing to finance my lifestyle.

And dude, if you're out of college, find a new job, even for the next 9 months or so.

 

[somemaybedoc]

That's true for many doctors...you finish paying off your school loans right around when you have to take out loans to send your kids off to college....

Hmmm...my state school sounds better and better....

The more I think about it those potential kids are becoming too expensive for me, I have expensive tastes and not for colleges.

 

[DrBowtie]

The old saying is:
Live like a student now, live like a doctor later.
Live like a doctor now, live like a student later.

 

[somemaybedoc]

The old saying is:
Live like a student now, live like a doctor later.
Live like a doctor now, live like a student later.

👍

 

[Pkboi24]

I think it depends on the kind of debt and how much splurging. Credit card debt...no oh god no. Student loan debt... up to you, but I imagine I would hate getting eaten on interest enough to conserve if I was in the sort of position where I would be borrowing to finance my lifestyle.

And dude, if you're out of college, find a new job, even for the next 9 months or so.

I have multiple jobs. I'm also going to China to teach English for 6 months starting January.

The old saying is:
Live like a student now, live like a doctor later.
Live like a doctor now, live like a student later.

Is that really an old saying?

Okay just to gauge what you guys mean by "in moderation", is spending $2000 in three months w/o income considered excessive spending?

 

[DrBowtie]

I have multiple jobs. I'm also going to China to teach English for 6 months starting January.



Is that really an old saying?

Okay just to gauge what you guys mean by "in moderation", is spending $2000 in three months w/o income considered excessive spending?

I dunno about the age of the saying but I've heard it from multiple people IRL and it has been thrown around on SDN quite a bit.

 

[inside_edition]

just mooch off your relatives and promise them free medical care once you become a doctor. then again, everybody in my family is uninsured.

 

[Pkboi24]

In my opinion, how much can you possible spend now? I mean, a few new toys here and there. I'm not talking about a new car or house. Just small things to treat yourself for the four years of hardwork you just went through. Nothing more than $1000 a month. Surely $1000 isn't going to make much of a difference when you're going to be $100,000 in debt or making $100,000 a year later on.

 

[baylormed]

In my opinion, how much can you possible spend now? I mean, a few new toys here and there. I'm not talking about a new car or house. Just small things to treat yourself for the four years of hardwork you just went through. Nothing more than $1000 a month. Surely $1000 isn't going to make much of a difference when you're going to be $100,000 in debt or making $100,000 a year later on.

I agree.

Don't deprive yourself of a few pleasures every now and then just to save a few dollars. Go ahead and buy that CD you wanted, or go out for dinner as opposed to eating whatever's in your fridge.

I'm not saying you should live beyond your means, but use your hard-earned money to make yourself happy. Life is unpredictable, things happen, and what's the use of hard-work if you can't enjoy it??? I believe in working for the future, but I don't believe in making myself miserable in the present for the future.

 

[Rafa]

Every bit counts. If there's something you want, see if the numbers add up, and if you really think it's worth it, go for it. But if you're just buying things to fill some sort of hole, you'd be better off fixing whatever's not the way it should be, instead of chasing two-week highs. Apart from my computer, my iPod, and my musical instruments, there isn't really anything I can remember buying in the past x months that I still cherish daily. Maybe it's similar for you?

 

[NonTradMed]

Interest will kill you in the long run.

Keep in mind that right now your required upkeep are relatively low, but once you have a family, that 'required' amount will grow quite a bit and it is during that time you will be paying off your debt as well. Live like a student now, or live like a student later, we all pay our dues. I don't deny myself 'fun things' but I try to cut corners when I can. It's easy to fall into the impulse buy so I make allowances for myself but rein in most of my impulses until I thought it through.

 

[45408]

It's not that the extra $20K will make that big of a difference when your salary is $250K, but it's the habits you're forming now. If you're reckless with your money and saying that you'll "be responsible later," then you're probably not going to be responsible later. I've got the luxury of a well-paid wife who pays my rent, car payment, health/auto/renters insurance, food, gym membership, etc, etc. I could've maxed out my loans easily, and had a very, very comfy $15,000 to spend on toys. But I don't want to have a habit like that. We've only got one car - I ride my bike to school (2.5 miles each way). I'm using a 4-year old laptop right now, and I went out last night because a friend of mine won a free keg at a bar, so I stuck with free beer all night. I pack lunches, etc.

We're not paupers - we bought some nice furniture (but my Sony Wega TV+stand and our washer+dryer were from Craigslist for a total of $450), but I'm trying to be responsible, so that when I get my paychecks with five digits 😀 I won't have already spent it.

 

[Pkboi24]

Interest will kill you in the long run.

Keep in mind that right now your required upkeep are relatively low, but once you have a family, that 'required' amount will grow quite a bit and it is during that time you will be paying off your debt as well. Live like a student now, or live like a student later, we all pay our dues. I don't deny myself 'fun things' but I try to cut corners when I can. It's easy to fall into the impulse buy so I make allowances for myself but rein in most of my impulses until I thought it through.

I suppose it's a good thing I don't plan on marrying before I'm 32.

 

[Rafa]

I suppose it's a good thing I don't plan on marrying before I'm 32.

Hahahahahaha....if only life and love worked according to plan.

 

[Mac11]

Keep in mind, when you spend $1000 by taking out a loan, you're gonna end up paying back ~$2000.

 

[neom3x11]

-

 

[Beadle]

PKboi....how is the job at B&N? I have a tutoring job as well that will extend into the summer, but would like to do something else on the side. Since I live at the bookstore anyways, why not get paid to?

Do you mind telling me what you do, how much you get paid, hours, etc?

Thankies =)

 

[sendwich]

PKboi....how is the job at B&N? I have a tutoring job as well that will extend into the summer, but would like to do something else on the side. Since I live at the bookstore anyways, why not get paid to?

Do you mind telling me what you do, how much you get paid, hours, etc?

Thankies =)

i'd like to know as well!

 

[Law2Doc]

Interest will kill you in the long run.

Agree with this. Interest (especially credit card interest) has bankrupted more people than you can imagine. You will not be earning much for the next decade. And family, house payments, children tuition costs, health issues, divorce/alimony and other unforseable things possible in your future are going to suck up much of your future income when you get it, so you cannot even assume a huge cash flow for many years down the road. Bad, bad, bad idea.

 

[etf]

i say invest that extra money. if you have the discipline, that $20k could pretty much secure your retirement. but then again, i always say that. i go by sir john templeton's philosophy: "the best time to invest is when you have money"

 

[Pkboi24]

PKboi....how is the job at B&N? I have a tutoring job as well that will extend into the summer, but would like to do something else on the side. Since I live at the bookstore anyways, why not get paid to?

Do you mind telling me what you do, how much you get paid, hours, etc?

Thankies =)

Here's a breakdown of my day at B&N.

I get in at 8 AM and stock what needs stocking. It's not hard. You just go to the back and take out carts with books on them and file them by Alpha order onto the shelves.

The rest of the day (until 1 or 2 PM), I work at Info. I look up books for people and order books for them if we do not carry them. I answer phones.

At 11 AM I take an hour lunch. If you work less than 5 hours you get 1/2 hr lunch.

That is about all I do. You get paid $7/hr. The job's not hard and the pay's not great, but you get a 30% discount on anything in the store.

I'm currently working a couple other jobs just so I don't feel like a complete loser for living at my parent's place. (My mom won't let me move out because she doesn't like living alone. Oh well, I'll only be here for another 3 months anyways) Got an interview tomorrow at a research company for a report writing position. *cross fingers*

 

[Gut Shot]

i say invest that extra money. if you have the discipline, that $20k could pretty much secure your retirement. but then again, i always say that. i go by sir john templeton's philosophy: "the best time to invest is when you have money"

That's a tough proposition, given that the current interest rate is 6.80% for Direct Loans and 7.90% for PLUS Loans. Also, unless I'm mistaken, it's illegal to invest government loan money for retirement. If I'm ever audited I'd rather not have that skeleton in my financial closet.

 

[asunshine]

I hated B&N when I worked there (c. 1998, in high school). It was good for a while, but the management was unprofessional. People with PhD's in Literature aren't always the best candidates to make business decisions. I got paid about $6/hr, and that was in 1998! And they let you cash your paycheck there on the spot....which is very dangerous considering the mad discount. But good during Christmas!

👍 to the Prowler. He pretty much outlined my plan for the next 4 years (hooray for sugar-daddy spouses 😉). Hope it works....

 

[str8flexed]

Just marry a nurse early on, that way she'll be churning out $70,000+ to support car payments, food, rent, etc., while you are studying!

 

[Stroganoff]

i say invest that extra money. if you have the discipline, that $20k could pretty much secure your retirement. but then again, i always say that. i go by sir john templeton's philosophy: "the best time to invest is when you have money"

Dang, you beat me to this thread, etf! Pkboi24, the limit for a Roth IRA for 2006 is $4000--have you maxed that out yet? The saying that what we do now doesn't matter because we'll be taking out $100K+ in loans isn't the wisest decision to make due to the power of compounding. I've read that despite physicians' high salaries, they're some of the most fiscally clueless people ever and end up having a net worth lower than people in different careers with comparable salaries.

Income means nothing...it's all about the net worth. Sure, splurge on a few toys, but $1000/month on toys is a little overkill and will lead to a spending addiction (I've been there).

That's a tough proposition, given that the current interest rate is 6.80% for Direct Loans and 7.90% for PLUS Loans. Also, unless I'm mistaken, it's illegal to invest government loan money for retirement. If I'm ever audited I'd rather not have that skeleton in my financial closet.

He was referring to investing the income from B&N and the tutoring job, not loan money. You are absolutely correct that it's illegal to invest loan money and not really worth it anyway.

 

[kingtz]

Just marry a nurse early on, that way she'll be churning out $70,000+ to support car payments, food, rent, etc., while you are studying!

Why stop at a nurse? Just marry a practicing doctor right now and jackpot! Plus, she'll let you shadow her and then write you a good recommendation. 👍 😍 👍

 

[45408]

Just marry a nurse early on, that way she'll be churning out $70,000+ to support car payments, food, rent, etc., while you are studying!

Keep dreaming about the $70,000+ unless you're in an area that has a high cost-of-living, which will take a big chunk out of the $70K. I would know - I went ahead and married a nurse. 😉

 

[asunshine]

Keep dreaming about the $70,000+ unless you're in an area that has a high cost-of-living, which will take a big chunk out of the $70K. I would know - I went ahead and married a nurse. 😉

You beat me to it! I make much less than that, even with a differential and overtime.

Marry a trial lawyer or an interventional radiologist

 

[Pkboi24]

Just marry a nurse early on, that way she'll be churning out $70,000+ to support car payments, food, rent, etc., while you are studying!

Off topic: What's the deal with the stereotype of nurses being hot. The only nurses I've ever seen are old fat ones that look like they're one doughnut away from the becoming the patients they care for. I went to UT-Austin. Now, the nursing students were hot, but where they go from nursing school is beyond me because it sure as hell weren't the hospitals I worked at.

 

[Rafa]

^ I saw a hot nurse yesterday. Riding a unicorn. Through a field of four-leaved clovers. It was a pretty weird day.

 

[Ross434]

Off topic: What's the deal with the stereotype of nurses being hot. The only nurses I've ever seen are old fat ones that look like they're one doughnut away from the becoming the patients they care for. I went to UT-Austin. Now, the nursing students were hot, but where they go from nursing school is beyond me because it sure as hell weren't the hospitals I worked at.

Yeah it's the oversupply of donuts and brownies and all that crap when they get on the job. Also, there's a lot of places where fresh grad nurses make more than 70k

 

[MossPoh]

If it is a splurge like buying a slightly upgraded liquor at the store, or maybe a new toy like an iPod then go ahead...if you make it a habit that is where you need to stop. 5 or 10 bucks extra on stuff builds up real quick. If you were really into it...start investing as much of that money as you can now. Sounds stupid but it can really help in the longrun..if anything because you learn the basics of saving/investing earlier on so it is easier to do when it counts.

 

[45408]

Off topic: What's the deal with the stereotype of nurses being hot. The only nurses I've ever seen are old fat ones that look like they're one doughnut away from the becoming the patients they care for. I went to UT-Austin. Now, the nursing students were hot, but where they go from nursing school is beyond me because it sure as hell weren't the hospitals I worked at.

here's my nurse 😀

 

[asunshine]

Off topic: What's the deal with the stereotype of nurses being hot. The only nurses I've ever seen are old fat ones that look like they're one doughnut away from the becoming the patients they care for. I went to UT-Austin. Now, the nursing students were hot, but where they go from nursing school is beyond me because it sure as hell weren't the hospitals I worked at.

Smart nursing students know that being a bedside nurse in the hospital will suck their will to live (or be skinny), so they quickly move on to NP. (or MD! 😍 )

So wait until you're ready to start your own practice and look for NP partners 👍 .

 

[NonTradMed]

I suppose it's a good thing I don't plan on marrying before I'm 32.

No one 'plans' on marrying at a certain age. The best one can do is 'approximate' when one gets married. 🙂

 

[Ross434]

Off topic: What's the deal with the stereotype of nurses being hot. The only nurses I've ever seen are old fat ones that look like they're one doughnut away from the becoming the patients they care for. I went to UT-Austin. Now, the nursing students were hot, but where they go from nursing school is beyond me because it sure as hell weren't the hospitals I worked at.

Off topic: What's the deal with people posting a picture of their wife sprawled out on a bed?

 

[45408]

Off topic: What's the deal with people posting a picture of their wife sprawled out on a bed?

it's empirical evidence to contradict the assertion that all nurses are fat old nurses. God forbid we inject some pleasantries into this place.

 

[Rafa]

it's empirical evidence to contradict the assertion that all nurses are fat old nurses. God forbid we inject some pleasantries into this place.

Hahahaa...

 

[dantt]

The old saying is:
Live like a student now, live like a doctor later.
Live like a doctor now, live like a student later.

I believe the word is professional. Funny thing, the financial aid person at my interview cited the same saying.

 

[linuxizer]

I tend to justify impulse buys to myself with the idea that it's only a one-time thing. There's an easy way to fix this. Multiply by 12 every time you want to buy something, because you know you're just going to justify the next similar item next month in the same "only one time" way. If you're buying on loans, multiply by 24 instead....
Incidentally, this approach seems directly applicable to an earlier comment about an extra $1000/month. If you're spending an extra $1k/mo, it's not the difference between $100k and $120k in loans, it's the difference between $100k and $148k in loans--before interest. $1k/mo is A LOT of money. Probably another $100k in loans+interest over four years of spending in this case.

That said, I've also found that reducing spending below certain amounts just makes life unbearable. That's what budgets are for. Set a reasonable one and stick to it.

--Ari

 

[Remiller]

Don't go into credit card debt. Get a better paying job if you want more spending money.

To control my spending, I automatically put away about $700/month, straight from my paychecks. Then I make transfers to my savings $100 at a time 1-2 times/month. I budget for rent, and everything else is taken out automatically (car pmt, gym membership, phone). Everything left over is for me to have fun with, yippee.