I recently signed a new contract and negotiated a modest sign on bonus. I’m coming right out of a radiology subspecialty fellowship, so the boost to the pocket book is exciting. What did you all do with the split to buy something nice but not squander it all away?
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Mine went towards the down payment on my house. Put 10% down, which, along with a smaller second mortgage helped me get out of paying PMI on my 15 year mortgage. Not exciting, but wasn’t squandered. This was one of the WCI tenets we violated right off the bat—buying a home out of fellowship. It was in an area we knew, and I’ve been at my job for over 3 years already so I guess it worked out OK. Home value has also gone up by over $100k in 3 years.
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0.25%- Celebratory dinner with my wife
10%- Charity
15%- Held aside for taxes
Blew the rest on what I thought would make me happiest
… a lower student loan balance.
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that's pretty solid right there.
only thing i would modify is to create an immediate e-fund rather than just hitting student loans.
cash in the bank gives me a heckuva lot of feeling of security.
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Depends on when you get the bonus. Mine was part of my first paycheck, not when I signed the contract. Keep in mind that there will be a gap in time from when you get your last pay check from residency / fellowship to when you start making money again. Mine was over a month. So if you got the bonus now, plan for those living expenses during the gap. With a long residency and fellowship, new family, and high COL area I was down to credit cards for the last 2 months. My bonus was used to pay off that balance. Also, as others have stated, most of the bonus's I have seen these days are characterized as advanced pay, so if you leave before a specified period of time you may have to pay it back.
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peds doesnt get a sign on bonus.
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My pediatrician wife got a signing bonus. I got a starting bonus. Note the difference: the former you get when you sign the contract and the latter when you actually start working. There may be a large gap of time in between those two.
We saved most of her signing bonus and used a quarter to spend a month in South America between residency and starting our jobs -- time and money well spent.
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Thanks for all the responses. I think I’ll spend it on my first vacation in 7 years and furniture at the new place.
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7 years? You have a problem. Yikes.
Please don't ever do that again.
(I assume you at least took some time off, it just wasn't to the beach or some distant locale!)
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