How to minimize debt in med school/residency?

[Eudaimonia]

49 minutes ago, Comprehensible said:

It’s funny how we all seem to end up spending more than we anticipated. 

I’m living on less than 1200 dollars a month for myself, but I also have a horse who costs me about 700 bucks a month. I love him dearly, but he’s hours away from me so I only see him on holidays. Unfortunately, he also has an injury which makes him un-sellable or leasable. 

So, I spend like 90 bucks a month in groceries, have no car, and spend as little as I can. I could have gone to a school in another province for like a third of what I’m paying now, but I decided to pick a city I thought I’d like (and that I’d be able to get home from in case of emergency). Was it my best choice? I don’t know. But at some point, sometimes it’s worth picking happiness over money. 

Where did you end up choosing, Comprehensible? That seems like you're doing a great job on spendings, at least relatively to me haha. But I agree, money is meant to be spent to gain happiness, within reason. (I'm not saying happiness is only obtained from money either lol)

[Thunderbirds]

3 hours ago, Comprehensible said:

It’s funny how we all seem to end up spending more than we anticipated. 

I’m living on less than 1200 dollars a month for myself, but I also have a horse who costs me about 700 bucks a month. I love him dearly, but he’s hours away from me so I only see him on holidays. Unfortunately, he also has an injury which makes him un-sellable or leasable. 

So, I spend like 90 bucks a month in groceries, have no car, and spend as little as I can. I could have gone to a school in another province for like a third of what I’m paying now, but I decided to pick a city I thought I’d like (and that I’d be able to get home from in case of emergency). Was it my best choice? I don’t know. But at some point, sometimes it’s worth picking happiness over money. 

Wait, what? Here I am trying to figure out how I can fit my groceries (and eating out) in $500/month. 

[Comprehensible]

32 minutes ago, Thunderbirds said:

Wait, what? Here I am trying to figure out how I can fit my groceries (and eating out) in $500/month. 

If you add eating out, I’m around 115 bucks a month. I definitely spend less than most, which leads to less fancy food. 500 sounds like a lot though - I think an average number is around 250.

I was lucky enough to have a good store of staples from my undergrad, so I use a lot of rice, beans, lentils, pasta, etc. which I rarely have to restock. I buy most of my vegetables and fruit frozen at Costco, and am happy to eat instant oatmeal for breakfast for a week straight. I also take my parents’ leftovers when I go home and they give me a little bit of some more expensive stuff like cheese when I see them, but I’ve only been home at thanksgiving, Christmas, family day and spring break so that’s not sustaining me full time.  I don’t buy any drinks: pop, juice, alcohol, etc. I often eat 2 granola bars and a pack of seaweed for lunch (not to save money, just because I dislike packing lunches).

Finally, I’m a woman so I eat less than most men. I would also would rather lose weight than gain it, so I’m not going through as much food as some people do trying to put on muscle. 

Edit: grammar, and also that being said, I accidentally bought a $15 spaghetti squash that I thought was 5 dollars last week, so I'm sure not perfect.

[Comprehensible]

2 hours ago, Eudaimonia said:

Where did you end up choosing, Comprehensible? That seems like you're doing a great job on spendings, at least relatively to me haha. But I agree, money is meant to be spent to gain happiness, within reason. (I'm not saying happiness is only obtained from money either lol)

Nice to see you around! I remember that we were both feverishly refreshing this site last year haha

I'd rather not say which school I'm at (with all of these universities being so small), but I agree with all of your points, as long as it's kept within limits.

[cleanup]

7 hours ago, lasko.heater said:

 

My cousin is almost done with his residency and he just recently got a 1.5 M house , but both him and his wife are going to be working physicians very soon. 

1.5 mil is a bargain for a home in Toronto. It doesn't get you much.

[cleanup]

3 hours ago, Comprehensible said:

If you add eating out, I’m around 115 bucks a month. I definitely spend less than most, which leads to less fancy food. 500 sounds like a lot though - I think an average number is around 250.

Kudos for the extreme frugality. I'm not sure where you live but I'm not sure I could live on $250 of food a week never mind $250 a month.

[Comprehensible]

6 hours ago, cleanup said:

Kudos for the extreme frugality. I'm not sure where you live but I'm not sure I could live on $250 of food a week never mind $250 a month.

Honestly it’s more about not wanting to spend the time to go to the grocery store than frugality, but its a nice side effect.

I’m in a major city, but I have noticed food is more expensive here than it was in my smaller home city. It’s true that location makes a huge difference. 

Are you feeding anyone else? Or just going through lots of meat? Or are you super busy and eating out a lot? 

[blah1234]

18 hours ago, PhD2MD said:

Kind of curious how big you'retalking?

Well into the 7 figures. I know roughly how much they make and I would not feel comfortable. They essentially put themselves on a treadmill until their retirement (if that ever happens) and if there is any short term pressure of dipping prices and rising interest rates they could become insolvent.

Too many people want to live the extravagant lifestyle and make choices assuming they can work this hard and fast for the rest of their lives. 

[rmorelan]

19 minutes ago, blah1234 said:

Well into the 7 figures. I know roughly how much they make and I would not feel comfortable. They essentially put themselves on a treadmill until their retirement (if that ever happens) and if there is any short term pressure of dipping prices and rising interest rates they could become insolvent.

Too many people want to live the extravagant lifestyle and make choices assuming they can work this hard and fast for the rest of their lives. 

it is common for many people - it is a personal choice so not right or wrong but I would say personally it adds  a lot of stress and inflexibility to things which is very unpleasant ha. 

 

[ZBL]

Another devils advocate comment here. Frugality can be good at times, and yes you shouldn’t let your spending get out of control. But don’t forget that you are spending the prime years of your life in a classroom, ER, or some crappy call-room while you work a stupid amount of hours each week and miss out on friends, family and your own youth, the thought of which would make most normal people vomit. That trade off should be rewarded - not deferred to 30 years later.

The one thing most med students do have going for them is their health. 30 years later, who knows what your situation will be. Spend money to eat properly, buy things that make you happy now, do fun things with what little free time you have. Saving everything for the future is risky just as well in my opinion. If it’s a difference of even 80K at the end of residency, my personal opinion is who cares? 6 months more to pay it off is meaningless when you’ve been in school for 10+ years with a (hopefully) 30 year career ahead of you. There’s a difference between living, living well and living extravagantly, and there’s no reason a med student/resident should be forced into just getting by on the bare minimum cost.

PS I also think reasonable mortgages CAN be a good idea in the right circumstance. Not a clear cut yes or no though.

 

[rmorelan]

On 3/11/2019 at 10:46 AM, ZBL said:

To play devils advocate (and in actuality I’m not suggesting one way or another as only you know your financial situation), but even if you did spend more each year on a nicer living arrangement, car, clothes, vacation, a nice bag or whatever etc - your LOC might be 30-60K higher at the end. That sounds like a lot, but as a staff physician that extra 30-60K probably won’t make a huge difference. It all comes down to balancing what you are comfortable with and capable of in terms of expenses vs what you need to be happy, de-stressed and the convenience factor. None of us here can tell you where that sweet spot will be for you. 

But it if you really want to save money...

- downsize your apartment/house and get roommates or live with parents

- ditch the car and bike or take public transit or Uber

- map out what restaurants have chicken wing deals for dinner 

- only go for coffee when residents or staff are going too

- staycation on time off

While I am on the more frugal side of things, there is still logic in not super worrying about. I will point the problem is that the LOC in my opinion isn't even the paying off phase - it is the gap between med school and staff - can be up to 7 years long - where those interest payments to prevent loan from growing is the main issue. I have seen a lot of people that are perfectly able to pay off the loan as staff hit a major wall 2 years prior to that point and it is painful. 

Even that say 60K would take 1/2 a year of income for a family doctor to pay off - not including the extra interest, or what would happen in the rates bumped up (which may or may not happen - who knows ha). 

I basically did much of what you said about kind of automatically - rented a room, didn't get a car as my location just didn't need one, didn't eat out much, and I did travel for a major Europe trip I didn't exactly go for 5 star hotels ha. Glad I did in the end as I enjoyed myself fine without crossing over into miser territory and the extra room let me get a house in residency.

I should say that the entire pay it off later requires some discipline as well - the problem is that people that think that way and cannot snap out of it are exactly the types that end up pushing things off so long that they get into serious trouble. Can you pay if off quickly as staff if you live like a resident and use the rest to pay off debit for a few years? Sure - but will you is a different question ha. Being frugal is like going to the gym regularly - it is kind of a way of life ultimately.

In residency you will met a lot of 70 year doctors that are not living the life they want but messed up along the way. Man those are some bitter people ha. You also see others 55 year olds with their part time hours living it up with their 3 month long vacations in France (and annoying the staff around them as well - so much fun). Have to know what you want and go for it in any case - just make sure you know how things work and want the options are. 

[ZBL]

5 minutes ago, rmorelan said:

While I am on the more frugal side of things, there is still logic in not super worrying about. I will point the problem is that the LOC in my opinion isn't even the paying off phase - it is the gap between med school and staff - can be up to 7 years long - where those interest payments to prevent loan from growing is the main issue. I have seen a lot of people that are perfectly able to pay off the loan as staff hit a major wall 2 years prior to that point and it is painful. 

Even that say 60K would take 1/2 a year of income for a family doctor to pay off - not including the extra interest, or what would happen in the rates bumped up (which may or may not happen - who knows ha). 

I basically did much of what you said about kind of automatically - rented a room, didn't get a car as my location just didn't need one, didn't eat out much, and I did travel for a major Europe trip I didn't exactly go for 5 star hotels ha. Glad I did in the end as I enjoyed myself fine without crossing over into miser territory and the extra room let me get a house in residency.

I should say that the entire pay it off later requires some discipline as well - the problem is that people that think that way and cannot snap out of it are exactly the types that end up pushing things off so long that they get into serious trouble. Can you pay if off quickly as staff if you live like a resident and use the rest to pay off debit for a few years? Sure - but will you is a different question ha. Being frugal is like going to the gym regularly - it is kind of a way of life ultimately.

In residency you will met a lot of 70 year doctors that are not living the life they want but messed up along the way. Man those are some bitter people ha. You also see others 55 year olds with their part time hours living it up with their 3 month long vacations in France (and annoying the staff around them as well - so much fun). Have to know what you want and go for it in any case - just make sure you know how things work and want the options are. 

I agree. There is a balance to be made for sure, which is very individualized to each person and their situation. I just discourage living in misery lol. Beyond that, make a spreadsheet!

[rmorelan]

3 hours ago, ZBL said:

I agree. There is a balance to be made for sure, which is very individualized to each person and their situation. I just discourage living in misery lol. Beyond that, make a spreadsheet!

The way I define it:

Misery - spend so little money that you are causing yourself pain (keeps their thermostat at 10 degrees in the winter to save on heat)

Cheap - spend so little money that you cause people around you pain (the jerk that buys the 5 dollar wedding present they go to)

Frugal - spends less money that others of similar income but causes neither themselves or others pain by doing it. The guy that enjoys their lentil soup for dinner that costs very little to make isn't exactly hurting anyone ha (I really do love my lentil soup)

Bottom line - don't spend so little money that it becomes a distraction when you are trying to get your degree. Similarly don't spend so much that it causes you problems in residency. The path is a long one and your LOC is your shield. Use it wisely

[JohnGrisham]

12 hours ago, cleanup said:

Kudos for the extreme frugality. I'm not sure where you live but I'm not sure I could live on $250 of food a week never mind $250 a month.

Unless your in Alaska, 250$/week for one person is ALOT. Even if your eating eating out alot

[Lactic Folly]

On 3/28/2019 at 12:02 PM, blah1234 said:

Well into the 7 figures. I know roughly how much they make and I would not feel comfortable. They essentially put themselves on a treadmill until their retirement (if that ever happens) and if there is any short term pressure of dipping prices and rising interest rates they could become insolvent.

Too many people want to live the extravagant lifestyle and make choices assuming they can work this hard and fast for the rest of their lives. 

There is also social expectation to project the lifestyle of a physician (doesn't bother me in the slightest, but could play into the decisions of the more status-conscious).

I am fortunate to live in one of the nicest neighbourhoods in the city and can't imagine anyone could get a mortgage here without a decently above average income. However, on more than one occasion, when people (outside my field) find out the property that I have, I have gotten raised eyebrows and been asked why I'm living there (just doesn't fit their mental image I suppose). And I think about being chained to that exact treadmill you've described...

[cleanup]

13 hours ago, Comprehensible said:

Honestly it’s more about not wanting to spend the time to go to the grocery store than frugality, but its a nice side effect.

I’m in a major city, but I have noticed food is more expensive here than it was in my smaller home city. It’s true that location makes a huge difference. 

Are you feeding anyone else? Or just going through lots of meat? Or are you super busy and eating out a lot? 

It's just me, but I eat well. I probably spend about $100-150 a week on groceries and then maybe another $100-150 a week or so on eating out. More if I'm treating other people.

7 hours ago, JohnGrisham said:

Unless your in Alaska, 250$/week for one person is ALOT. Even if your eating eating out alot

It's all context-dependent. It depends what you're eating, and where you're eating out. Food is something I will never feel bad about spending money on.

[Comprehensible]

On 3/28/2019 at 10:21 PM, cleanup said:

It's just me, but I eat well. I probably spend about $100-150 a week on groceries and then maybe another $100-150 a week or so on eating out. More if I'm treating other people.

Fair enough! If you're happy with it, that's great .

From one of your other posts, I understand that you're currently a working dentist. Having income coming in would definitely reduce the stress about spending (it's no longer all going on the line of credit lol). That also explains why you're able to treat other people - I will admit to being confused for a second there. I'm kind of envious of how well you must eat - I used to feed 3 people on a budget of $275 a week and felt like we we were eating luxuriously.

[cleanup]

10 minutes ago, Comprehensible said:

Fair enough! If you're happy with it, that's great .

From one of your other posts, I understand that you're currently a working dentist. Having income coming in would definitely reduce the stress about spending (it's no longer all going on the line of credit lol). That also explains why you're able to treat other people - I will admit to being confused for a second there. I'm kind of envious of how well you must eat - I used to feed 3 people on a budget of $275 a week and felt like we we were eating luxuriously.

There's certainly no need to spend the amount I do. I'm fortunate that I'm able to. I'm a big foodie and I love to cook a variety of things. When I was a student my diet was incredibly simple, and I ate the same things over and over and over, which was perfectly fine. It wasn't just out of a need for frugality and simplicity but it also kept me very healthy. I would easily be able to feed 3 people on a budget of $200-275 a week as well, simply because I know how to make good use of fresh ingredients and buying in bulk, but I'd need a lot more time and effort to expend into it.

My only argument against frugality sometimes is a cautionary concern of people taking it too far. There's a threshold, and everyone's is different, but "Save as much money as you can as often as you can" just doesn't strike me as a legitimate, productive or positive strategy, and yet I see it a lot, paraded as some sort of righteous effort. That's confusing to me.