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Best ways to reduce expenses as a resident

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  • Best ways to reduce expenses as a resident

    I'm in sort of an unusual situation, as I'm living rent free with my parents during my IM-prelim/TY intern year before moving away in summer 2017 for radiology residency elsewhere.  I'm also provided limitless cafeteria access through my program = it's pretty nice  

    Next year, obviously, I'll lose these benefits, and so in light of this month's WCI book giveaway, I'd thought I'd start a discussion on strategies other residents have used to develop effective spending habits and reduce monthly expenses.

  • #2
    buy a 2bed/2bath place and rent the other bed/bath out.  you will end up paying peanuts for the remaining monthly mortgage cost.  i bought a place for 170k prior to starting residency using a doctors loan.  my mortgage, utilities, HOA fees, cable/internet, etc totaled to 1350/mo.  i rented out the 2nd bed/bath to another resident, who paid me 800/mo for it.  so, my total living costs were only 550/mo, and much of that essentially went into equity.

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    • #3
      Find a reasonable place that is close to work that is walkable or bikable to cut your auto/gas budget.

      Buy groceries and learn to cook for yourself to cut your food budget.

      Take advantage of free meals provided by the hospital, department, or reps.  The rep meals were abundant when I was a resident but I understand places are cracking down on it now.

      Wear scrubs everyday to cut your clothes budget. (If you do this, make sure you aren't getting too fat.  I knew more than a few fellow residents who wore scrubs everyday, and didn't notice their expanding waistline until they couldn't fit into their real world clothes anymore.)

      If you are relatively young and healthy, consider opting for the HSA plan if your program has one.

      Look into moonlighting opportunities if you can afford the time.  Your first job/duty is to your residency however.

       

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      • #4
        Moonlight, moonlight, moonlight!

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        • #5
          I'll second most of what's been said except the "buy a house" - even if you know what you are doing and aren't already heavily in debt w loans, that could just as easily do more harm than good. I'll add- find a significant other that has a full time job to help out?

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          • #6
            After student loan payments, housing is likely to be your next major expenditure. I'd get a budget on paper that lists amounts for all your major financial items/goals first, e.g., Roth IRA, employer-matched retirement accounts, HSA, disability and life insurance, food (groceries and dining out once a month as a treat), gifts (birthdays and holidays), et cetera. Then look for housing that only costs what remains in your budget. Most people do it the other way around, budget for student loans and housing then for everything else. These are the folks who tend to say they can't contribute to a retirement account because their other fixed expenses are too high. This will help you cut down on your expenditures because you'll have already "spent" the majority of your money on things that are truly important to you.

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            • #7
              Saving money during residency shows discipline and is admirable. It's good to form the habit.

              But... if you want to do well financially, focus on income after graduation. I didn't save very much in residency, but I was working full time as a locum starting Monday, July 3rd and on call the 4th of July. Compared to classmates who graduated and took a month off before starting their first job, I was $30,000 ahead by August 1st.

              Best,

              -Physician on FIRE

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              • #8
                Live in a local trailer park with free WiFi and drive a Vespa to work.

                You laugh, but my buddy did this during his TY...all while owning a sailboat and a Volvo XC90.  Now he's a flight doc.  Probably moonlights all the time now, but he got rid of the Airstream, so he's actually got some expenses now.

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                • #9
                  First, actually live like a resident.

                  You might laugh but I see many residents in our hospital who start buying expensive cars once they get their first paycheck. So continue to live frugally.

                  Own the same car you have till it dies.

                  Either rent an apartment cheaply or have room mates or if you can affordably do it, buy a 2 bedroom apartment. Easier to sell if it is in a college town. I lived in an apartment while doing residency and fellowship and for 3 years as an attending. Helped me really jump start my savings. Small apartment means less space, so less wasteful purchases.

                  Eat healthy. Some of the rep provided meals may be too fattening.

                  If you can, start a small savings plan. It might bring in the discipline to start saving later on in life.

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                  • #10
                    Thanks to all of you for the comments!

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                    • #11
                      Yes, "live like a resident" is first and foremost here, and well into your early attending years as well (I'm 2 years out, rural primary care, doing great).

                      Like-minded lifestyle with friends and fellow residents is key, particularly you're prone to following other residents' 'bad' examples (don't do this).

                      I'll echo a lot of what you've heard already, with additional twists and notes here and there:

                      1. Rent, don't own. Even if you have no student debt  - if so, nice work; if not, I share your plight - residency is generally not a good time to buy property unless you're going to be there 5 years or more; there can be exceptions to this, but not usually.  Rather than buy a two bedroom and rent one out, rent a 2-3 bedroom and make sure there's a sub-lease clause for you to sub-lease those other rooms, if you want to go that way in the first place.

                      2. Live close. Since I had an OB quotient to my FM residency, we had to be within 15 minutes of the hospital; this also meant I could bike to the hospital in around 30 minutes (I lived within 5, biked within 15, but that's me).  This markedly saved on automotive fuel and related costs, as well as building in regular exercise, which is a must in residency - for mental health alone, much less physical fitness/maintenance, IMO. (Yes, I always drove for deliveries).

                      3. Cook. If you already know how to cook, and well and regularly, kudos, I commend you.  If not, OODLES of money is wasted on going out to eat, particularly stress eating/snacking, going out with fellow residents too often (depends on how close your class is), or just being exhausted at the end of the day and not caring (speed dial pizza is REAL easy when you're otherwise incoherent after long call or ICU shifts, etc). Cooking for yourself, in additional to being markedly healthier, as you know, is significantly cheaper; I've had several colleagues in residency easily spend almost $1000 a month on going out: with some proper planning, that could be $150-200 per month easy if it's just you (more with spouse/kids/etc, obviously).

                      4. Wear scrubs. As mentioned previously, if you can get away with wearing scrubs everyday, laundered by the hospital, do it. It's not the laundering costs (although the temporal cost is certainly there), it's the JCPenny/Macy's/wherever costs.  I had lots of clinic, which forbade scrubs due to dress code policy, so I couldn't completely dodge it, but throughout all surg/ER/OB rotations I just lived in scrubs: 'professional pajamas' are great!

                      5. Own you vehicle. Car, bike, both, whatever: own it. Car payments in residency should be avoided like the Plague. I watched many friends/colleagues do it, whilst I drove my '03 Outback into the ground (it always worked though); these folks still live paycheck-to-paycheck, even making 5 times what they used to, because those same habits continued, just adding more zeros on the end.

                      In any event, most of this you already know: it's simple, but not easy.  In the end, it's the consistency over time that matters most: diligence. I highly recommend the WCI book for you, a great resource for much of this and more.  GOOD LUCK!

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