According to statistics from the Federal Reserve Bank of New York, there are 44.7 million Americans who own a student loan debt as of 2018. It has exceeded auto and credit loans with a whopping $1.47 trillion amount by the end of this same year. Going through medical residency on a restricted budget (or limited sources of income) can pose many challenges during your training. However, with careful planning, you can successfully accomplish this even on a tight budget.
Consulting your mentors and seasoned physicians can tremendously help you overcome this struggle. With insights and guidance, you will have first-hand information in overcoming the financial burden and focus more on the training. Here are smart ways to spend your money wisely throughout your residency.
Take outs may be nice every once in a while. However, this is going to eat up on your budget in the long run. If time permits, cooking your own food can save you money to spend on other things such as training fees and the likes.
Weekly groceries can also eat up on your budget if you’re not conscious of the prices. Where you buy your groceries could help prevent unnecessary breaches to your weekly grocery allocations. Compare prices from one store to another to see which shop provides a better deal for your purchase. It’s also good to check for food items that are usually go on sale.
As a resident doctor, it could be a struggle to find time to plan for meals after a long shift from the hospital. But when you’re splurging on last-minute scrambles for a good meal, this can burn a hole on your weekly allocations. You can plan your meal around good bargains from your chosen shops. When you’re conscious about your food’s shelf life, you can’t afford to waste it and only go for food that you needed for the week.
There are various recommendations you can check online to planning your weekly meals. Just be sure to focus on healthy foods. If you have kids, opt for kid-friendly options to help minimize additional expenditures on food groups that don’t have much nutritional content.
Couponing can save you hundreds of dollars on groceries. And one way to maximize your discount coupons is to purchase only the items you plan to buy.
There’s a great tendency to go about buying items that are not as important and end up with a higher bill. Understanding your price points also helps maximize your coupons. There are four price points to consider: Average price points (average price of the item), maximum price (maximum price you’ll pay for an item), deal price (when the item goes on sale and you have a coupon), and stock-up price (when it’s at a rock-bottom price). Make sure to give out the coupons starting with the lowest to the highest and sort your coupons according to expiration dates.
No matter how tight you are on your budget, there’s still a strong tendency to give in to these little pleasures. Splurges are fine but shouldn’t be a routine on your accounting sheets. Accumulated savings from those splurges could help pay for other fees involving your medical training. Careful planning and prioritization could help clear your priorities and spend only on things that matter most. If you happen to see something you like but are not ‘urgent’ on your list, give it a day or two to think about. Delaying non-urgent expenses will give you a more clear-headed decision afterward. It’s good to also communicate your plans with your spouse or partner so you’re in agreement with the budget.
Your expenses shouldn’t exceed your income—not the earning potential. While you are slowly inching closer to fulfilling your residency, it’s not wise to add more debt than what is necessary. Remember that after your practice, you may still have to pay off your med school loans on top of children’s education and retirement. Plus, high-income taxes and continuing practice expenses could still eat up on your current income.
If you have a partner or spouse, a one-car household could save you money on gas as you work your way through training. It’s easy to assume that having your own car is more convenient and gets you to do things faster. However, you need to reassess whether owning two cars including insurances, registrations, repairs, and maintenance is worth it. Chances are, it could eat up on your current income and could mean a lost opportunity to pay for your student loan debts.