Where Should Medical Residents Spend Their Salary?
Oct 22, 2020
Published by Kathrin O'Neill
Your resident doctor job might be your first full-time job. You finally get the chance to work and get paid. However, this job is not easy. You have to work very hard and stay in the hospital for long shifts to get the pay that you deserve. With that, blowing away your salary on luxury goods and expensive dinners is not a good way of spending your hard-earned money. Thus, it is important for you to set your financial goals and make a budgeting strategy.
Every person’s priorities are different, so it is important that you tailor your spending plan depending on what you need. Determine what kind of expenses you must make. Start by taking account expenses that you have no choice but to spend on because they are required by your workplace or are necessary for your survival. There are also those that you have a choice of doing or not doing but you will have to do it anyway because it is also important. Lastly, determine the things that you will spend on if you have extra money.
At this early stage in your career, it is more practical to rent rather than rent to own or purchase a house on an installment basis. First, renting is expensive but is much cheaper compared to paying a mortgage. Also, when you are renting, you are not responsible if any appliance breaks so you can just call your landlord to get this kind of problem fixed immediately. Meanwhile, if you own your place, you will have to pay for everything relating to broken appliances, plumbing, and home repairs. Moreover, your salary as a resident is not enough to pay for down payments. Despite the fact that there are physician mortgage programs out there offering 0% down payment, it is not ideal to apply for a loan especially if you still have an existing student loan. Lastly, it is better to rent an apartment than to own your place because you are not sure yet where you will be working after your residency. If you get a job in another state or country, reselling your property at a non-loss price would be difficult. On the other hand, if you are just renting, you can surrender your place anytime. With all of these considerations, allot approximately $1,000 per month to pay for your monthly rent.
In addition to housing expenses, allot about $300 per month for your monthly bill. This may include your phone bill, gas, water, heat, electricity, and internet. Don’t go beyond this. You will not be needing subscriptions for TV shows because most likely, you will not have time for this after work. If you really find watching movies and TV series enjoyable in your free time, borrow your friend’s username and password and split the bill with that person.
It is not good to be stingy on yourself when it comes to food but do not overspend either. Thus, consider eating healthy food. It is not only cheaper, but it will do you good in the long run since you will no longer have to worry about medical expenses.
Most medical school graduates suffer from an enormous student loan. With that, you must prioritize getting rid of that debt as soon as possible. The longer that loan will stay with you, the more financially straining that will be on your part. Debt payment plans differ from person to person. There are those who lessen their daily expenses and allot a huge chunk of their salary for the payment of their debts. On the other hand, there are those who only aim to meet the minimum monthly payments.
Part of your job is to attend conferences, symposiums, and seminars where you are also required to accomplish presentations and write research papers. Most of these activities are done away from your workplace so expect spending on accommodation, and transportation. Though most programs reimburse most of these expenses, there is an upper limit for how much they are willing to pay out over an academic year. It is highly possible that you will spend more than what the hospital can reimburse even if you stick to a tight budget.
This is something that everybody needs to prioritize once all debts are paid. Later on, you have to put aside money just in case your gadgets or car breaks down or a family member gets sick.
Even though healthcare insurance is already part of your benefits as an employee, there are times that it cannot pay for everything when something goes wrong with your health. It is advisable to acquire an additional insurance such as disability insurance to protect your income just in case something happens to you. Remember that your biggest asset is yourself because you have the ability to work and earn money. Before applying for any insurance, do a thorough research and find out if you can get a discount as an employee of the hospital you are employed in.
Sooner or later, you might get married and have children. With that, you also need to set aside money to spend on your wedding and prepare an amount that will be used when your children are born.
It is also important to consider how you will live after you retire even as early as now. No matter how strong and energetic you feel now, there will come a time that you cannot work for all your needs. It often takes 20 to 30 years to accumulate enough money for retirement so start saving as early as you can to ensure that you will live a comfortable life once you are old.
After all the stress and hard work that you have to go through every day as a doctor, for sure, you want to spend your vacation leaves on something amazing. Going for a trip can be a good way to de-stress, unwind, and catch-up with your hobbies. However, this will cost a lot of money so make sure to create a vacation fund if you like to make the most out of your vacation time even if it is only once or twice a year.
While many people out there prefer to use their vacations to travel, there are also those who just want to stay at home, watch movies, and snuggle in their beds. Even if you live in an apartment, improving your home environment will be a good idea if you are an indoor person. Besides, staying at home will cost you less money. You can start by buying personal massages instead of going to expensive spas or simple exercise equipment in place of applying for a gym membership.
Many people also find joy in giving to others no matter how tight their budget is. For many Christians, they give 10% of their income as tithing. For others, they donate to a charitable foundation of their choice. Meanwhile, those who are having a hard-time giving-out money donate their services as a doctor. Whatever your method is, sharing your resources with the less fortunate can much more fulfilling than you think.
There are times when it is very difficult to manage your finances and your money just disappears in the blink of an eye. Despite this, you must still try your best to create a realistic budget and stick to it so that you will not have a hard time later on.
