It’s March so that means another residency match cycle has come and gone. Fourth year medical students are super excited because they now know what type of doctor they’re going to be, they are for fulfilling their dream, and they know where they are going to live. Once the euphoria of the match settles down, something crazy happens, the fear that you are now responsible for another life. You are indeed a doctor.
That fear or anxiety happens to everyone. It’s why on the first day of intern year, despite years of studying the mechanisms of every drug available, we can become scared to order Tylenol without a senior residents approval. It sounds silly, but it happened to me and don’t be surprised if something similar happens to you.
In medical school, we tend to pay less attention to the other important parts of our life, specifically finances. Upon graduating that elephant in the room, can no longer be ignored. We never talk about the financial transition required to go from medical student to Intern, so I decided to think back and share 10 things I wish I knew about starting residency to prepare for a successful financial future.
1. If you’re single get a roommate.
Intern year will be stressful. Think of the most tired you’ve ever been in your life, then add more work to that. That’s how tired you’re going to be. Having a roommate can help alleviate some of that stress. Financially sharing expenses will help to decrease your financial burden, but having someone else to just be normal with is priceless.
2. You need 2 months worth of expenses saved up.
THIS IS EXTREMELY IMPORTANT. Majority of medical students are not going to have student loans which will cover moving expenses as well as a downpayment/security deposit for a new place to rent. Additionally intern year actually starts before July. Typically you show up a couple weeks prior to July 1st to do your hospital orientation. MOST HOSPITALS DO NOT PAY YOU DURING THIS TIME. Unless your intern year contract states the financial commitment begins in June, you’ll have to wait until two weeks after July 1st to receive your first paycheck. For some students the time between your first paycheck and medical school graduation can be up to 2 months. Which is why it is good to have 2 months of expenses saved up in advance.
3. Get 90 days of your prescriptions to prior to the end of med school.
Similar to you receiving your first paycheck, don’t expect to have medical benefits immediately on July 1st. The establishment or effective date of your medical insurance will vary based upon the hospital and medical insurance company. Thus if you require daily prescriptions ask your physician to provide at least 90 days of your medications prior to the ending of your medical student health insurance coverage. This will help you avoid any out of pocket expenses to buy prescriptions that you need.
4. If you’re hospital offers a 403B or 401K contribute enough to receive the matching contributions.
If becoming an intern is your first “real” job, then you’ll need to understand something, YOU HAVE TO RETIRE ONE DAY, SO PREPARE EARLY. Some hospitals offer a retirement plan to their residents. While it may not seem that important to you at first glance, I can flat out tell you its extremely important for your future. Those retirement plan contributions even if only for 3 years can jumpstart your retirement nest egg. The money you contribute pre-tax can be supercharged with compound interest. Please if you follow one thing on this list, follow this one.
5. Don’t let student loans cause you financial stress.
Everyone hates student loans. Student loans and student loan repayment in and of itself is controversial and can generate extreme feelings. But the reality is a lot of medical students start intern year worried about the mountain of student loans they accrued.
Prior to graduation your school is likely going to give you a presentation on student loan refinancing, consolidation, etc. Let me tell you right off the bat, its going to suck. It probably won’t make sense and its the same canned slides every year which is provided by the Department of Education.
Here is what isn’t known, if your student loan payment is going to bankrupt you every month, think about deferring them or just paying the interest. You don’t have to feel victimized by your student loans. You can feel empowered. Residency is hard enough as is and this added stress is not needed. Whether you’re in residency for 3 years or 7 years, the payments you make won’t even touch the principal. However what those payments could do is cause financial stress that would add to the stress of being an intern. That can not be ignored.
The Department of Education also understands this which is why they offer a forbearance for those in a medical residency. It has to be filed and certified every year to re-identify yourself as a medical resident however it can be a huge help. The drawback is your loans will continue to accumulate interest. The benefit afforded to you as a Physician is that you can expect a large increase in your salary in a short time. Thus you need to know up front that using this benefit in residency may cause an increase in your payments after residency. However there is a priceless benefit in decreasing your stress.
6. Consider buying a house and house hacking if you’re in a longer type residency.
This is one thing I wish I would have considered and quite frankly known about when I was starting residency/internship. House hacking has the ability to generate wealth through real estate ownership, provide added income when you are being paid pennies as a resident, and refine your financial management ability. House hacking isn’t for everyone, however for the right person and situation it could be an amazing tool for building wealth.
7. Get a Costco/Sam’s Club account and buy as much as your groceries in bulk.
If you have a family Costco/Sam’s Club can be a life saver. One buying in bulk saves you money over the long run but it decreases the time requirement throughout the month to grocery shop. Intern year is all about being efficient. Buying in bulk is exactly that.
8. Prep your meals for the week on your day off.
This is one that was very helpful intern year. I had the benefit of being gifted a pressure cooker as a medical school graduation gift and to be honest it was the most useful gift that I received. I would prepare meals in the morning and then sleep as much as I could while the food cooked. When I woke up, the food was typically done and I could eat then portion then save the rest for week. This was a huge time saver and I could add additional much needed sleep on my day off. Trust me anything you can do to get extra sleep, you’re going to want to do.
9. Eat Healthy and Workout.
One of the best pieces of advice I was given was to workout at least 3 times per week and to eat healthy while in residency. The adverse effect of stress of intern year can make the Freshman 15 look like anorexia. It’s important for your mental and physical health to stay in shape and eat well. Please don’t forget that you are your first patient. So take great care of yourself.
10. Have fun.
You’ve worked your tail off for a least a decade to get to this moment, SO ENJOY IT. Smile, have fun, and remember you’re a Doctor.
Finally congrats again. Most people won’t realize what it took to get to this moment. The late nights, the missing events, the blood, sweat, and tears, most won’t understand it. But you made it. You’re a physician. Medical school is a big financial commitment. Their financial commitment becomes more apparent as you go along the pipeline. It doesn’t have to be stressful. You just have to know how to navigate the journey.
As always if you have questions or concerns regarding creating an emergency fund, investing, real estate, insurance, or planning for the future, don’t be afraid to speak with qualified financial advisor. Smart Asset has a great tool to find an advisor in your area or feel free to email me (contact@surgifi.com) to help you on your path to financial independence.
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