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kanakari

Let's Discuss Finances

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I figure the incoming first years could use some advice, but I am also finding right now that my questions I had going in to first year haven't been answered still -- perhaps this will be of some help to all of us.

 

Everyone says either "don't worry about it" or "stick to a budget" but the nature of our LOC and loans is so unconventional that it is hard to get a grasp on it. Yes if I throw numbers on a paper I could make a budget, but as I have only been a student, there is no context for these numbers. It's just magical money that I have yet to tangibly work for; future me is paying current me but is not sure how much to pay. Yes, I could "not worry about it", but then again, I am a medical student who frequents premed101... 

 

I recognize that I could spend X or spend Y dollars and still end up fine in the end, but what are the advantages of spending X vs Y? As a medical student, what are the boundaries in which I should be letting myself spend each month? Obviously there is no fixed answer, but just some general numbers from other students would be appreciated to help set expectations. How much do you typically spend on nonessential things? Do you consider yourself frugal? Insight into how much should be budgeted towards elective applications, Carms, travel, board would also be appreciated.

 

 

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For med school, I had rent, utilities and had to buy a car with affordable payments over 5 years. I lived in the same frugal lifestyle as in undergrad (where I also loved on loans) and my only luxury was summer vacations.

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hEY SORRY about my irrelevant post. I frequented premed101 since cepep (back in 2010). I still check on the topic discussions everyday, not because I worry too much about my future. I just love this forum to answer the premed students questions (remember us in their shoes a few years ago). Also it is a great place to have feedback for our profession :)

 

For your question now. I am a frugal med student. I don't come from a well-off family (ghetto represents  :) ). So far, I live on governmental loans and bursaries, sometimes, I get lucky and get some scholarships :P  I have worked a lot before med school (since high school) and have made some savings. The summer research bursaries pay off my summer spending. I am a special case in medicine. I have noticed that some of my friends have LOCs and are enjoying their life with it. Otherwise, some others are very lucky, and their parents support them entirely. 

 

For CaRMS and for electives, I will be generous. For electives' spendings, it depends which city you plan to do your electives (the cost of living). 

I figure the incoming first years could use some advice, but I am also finding right now that my questions I had going in to first year haven't been answered still -- perhaps this will be of some help to all of us.

 

Everyone says either "don't worry about it" or "stick to a budget" but the nature of our LOC and loans is so unconventional that it is hard to get a grasp on it. Yes if I throw numbers on a paper I could make a budget, but as I have only been a student, there is no context for these numbers. It's just magical money that I have yet to tangibly work for; future me is paying current me but is not sure how much to pay. Yes, I could "not worry about it", but then again, I am a medical student who frequents premed101... 

 

I recognize that I could spend X or spend Y dollars and still end up fine in the end, but what are the advantages of spending X vs Y? As a medical student, what are the boundaries in which I should be letting myself spend each month? Obviously there is no fixed answer, but just some general numbers from other students would be appreciated to help set expectations. How much do you typically spend on nonessential things? Do you consider yourself frugal? Insight into how much should be budgeted towards elective applications, Carms, travel, board would also be appreciated.

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I feel that I will be watching this thread with interest :)

 

(you are going to be likely widely different answers as various people have different degrees of risk tolerance, external support, and different levels of comfort with debit or perhaps more hedonistic lifestyles ha - also different ideas of what types of doctor they want to be - there is a big different in planning between knowing you will be basically certainly a family doc in 5 years say, and hoping to be particular type of specialist in 9-10 years).

 

One thing I will say I guess - the point of medical school one some level is to a) find out what specialty you want to do and b ) get that specialty. The line between being frugal and cheap could be defined on when your lack of spending compromises that goal. So if you find a place 30 mins extra travel both ways to campus but is X dollars cheaper you have to consider that you just lost 1hr a day of studying etc time. That will matter potentially.  Eye on the prize and all that :)

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For electives' logding, since I am a green hipster who dislikes driving. I prefer living close to academic hospitals, so even for a frugal med student I am now. I am willing to pay the high prices to live close to the hospitals in downtown, it means 1 hour of more sleep or free time; and also the luxury of being downtown (close to everything! so convenient) :D

I feel that I will be watching this thread with interest :)

 

(you are going to be likely widely different answers as various people have different degrees of risk tolerance, external support, and different levels of comfort with debit or perhaps more hedonistic lifestyles ha - also different ideas of what types of doctor they want to be - there is a big different in planning between knowing you will be basically certainly a family doc in 5 years say, and hoping to be particular type of specialist in 9-10 years).

 

One thing I will say I guess - the point of medical school one some level is to a) find out what specialty you want to do and b ) get that specialty. The line between being frugal and cheap could be defined on when your lack of spending compromises that goal. So if you find a place 30 mins extra travel both ways to campus but is X dollars cheaper you have to consider that you just lost 1hr a day of studying etc time. That will matter potentially.  Eye on the prize and all that :)

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For real #s, I find the big monthly variables for me are

food-groceries (for 2) vs coffee/restaurants

auto-gas, repairs & insurance (I pay 2x a yr)

clothes/personal-if I find a deal I stock up so its not consistent

 

I find that I average $500 per month when I'm working, (about $200 is gas so $300). I use my credit card bill to track my spending as normal or oops each month & look at where I spent it. I have a no fee president's choice master card that gives me points in food $$.

The annual stuff always messes me up, 2 professional membership fees, xmas gifts, holiday trips, and I'm trying to track/plan those better.

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While I can't speak much to med school costs yet, I've had a lot of experience creating budgets for myself.

 

For us at Mac, things are a bit different in that we have one year less of living expenses to account for, obviously, so that will reduce the overall demand on our LOCs. Depending on your habits, that could reasonably be anywhere from $12k to $30k for a single student not living at home.

 

My situation is obviously different and not all of our living costs will go on the LOC. I'll be "paying" myself up to $2k monthly from the LOC for part of our living and incidental household expenses (birthdays, holidays, etc.) If I need less, I take less, if I need more, I need to consider carefully. It's a "is this reasonable?" checkpoint, if you will.

 

It adds up to a bit under $80k (when you add interest) over the three years, and I think that's a reasonable amount for living. I also have our move/setup costs which are not included in that. Adding in moving, computer, a small amount for fun we have budgeted, the bit of tuition/fees not covered by loans, a loose budget for visiting electives, and a rough amount for CaRMS and exams and I still have lots of wiggle room for a longer residency or other as-yet unanticipated expenses.

 

For me, I took into account repayment very heavily. Whether you'll need to roll loans onto the LOC (I mostly won't have to), whether you plan to practice in rural areas with incentives, whether you plan to go for a specialty that may have startup costs, etc. and this will really affect what is reasonable for each of us. I'm trying to keep the overall debt amount in view, though I'm also allowing us a slightly better standard of living than we have had.

 

I made up a really big excel sheet that I can plug my monthly and irregular amounts into and it'll calculate my projected LOC usage (including interest) by the time residency rolls around so that I have some idea of where I'll stand. Quite handy and I'd recommend doing one for yourself to paint a picture and even look at multiple scenarios on the fly.

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I made an Google doc with a rudimentary budget. (working on coding it so that its more plugin and display the relevant data)

 

It depends on your situation. In medical school, people like to live differently, Some people live frugally, others a bit nicer.

 

In terms of myself,

 

Rent, Utilities, Internet, phone take up ~800 a month.

Car: Parking, insurance and gas varies on the rotation but around 350 a month

Food varies. It depends on the rotation I'm on. Do I have time to make food or do I eat out a bit more. that ends ~300-400

Clothing: Clerkship and interviews mean looking your best. I spent a fair bit on my wardrobe at the beginning to look good. It's an expense but its how I treat myself.

Clerkship costs: Interviews, electives, travel etc all add up.

 

I don't live as frugally as I did in undergrad, but I dont live like a staff, which is probably the most important thing, its harder to downsize than it is too upsize.

 

https://docs.google.com/spreadsheets/d/1V7OVagb_HlvWq1whlMVLmWubcVRkyNbIgUhVYXpTNxA/edit#gid=1758121811

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To add to that - One other general key to finance I will mention is that is you generally get used to what ever level of spending you currently have - you rapidly acclimatise to a spending level. People tend to spend up to their income, then basically stop, and marvel at how the grass will be greener when they earn more money. It is always initially great to get any raise but that doesn't usually last. People tend to fantasize about how great things are when they have more - truth is closer to it is amazing how much we shortly then take for granted things. 

 

So don't ramp up things unnecessarily - for instance you don't have to immediately ramp up to staff income the second you get a staff position. Living a few years at 1/2 of your full doc income (which is still twice that of a senior resident), will still be amazing but rapidly put you in an amazing financial state. I mean amazing quite literally. There will be a weird point in time when your investments earn more than you personally doing your day job.

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A good book to read about this topic is called the "white coat investor". It is is primarily targetted towards American students and MD's but I think the principles are still quiet valid for here.

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On 7/14/2015 at 3:30 PM, thestar10 said:

I made an Google doc with a rudimentary budget. (working on coding it so that its more plugin and display the relevant data)

 

It depends on your situation. In medical school, people like to live differently, Some people live frugally, others a bit nicer.

 

In terms of myself,

 

Rent, Utilities, Internet, phone take up ~800 a month.

Car: Parking, insurance and gas varies on the rotation but around 350 a month

Food varies. It depends on the rotation I'm on. Do I have time to make food or do I eat out a bit more. that ends ~300-400

Clothing: Clerkship and interviews mean looking your best. I spent a fair bit on my wardrobe at the beginning to look good. It's an expense but its how I treat myself.

Clerkship costs: Interviews, electives, travel etc all add up.

 

I don't live as frugally as I did in undergrad, but I dont live like a staff, which is probably the most important thing, its harder to downsize than it is too upsize.

 

https://docs.google.com/spreadsheets/d/1V7OVagb_HlvWq1whlMVLmWubcVRkyNbIgUhVYXpTNxA/edit#gid=1758121811

Access to this doc is restricted, can you make it accessible?

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So is the basic financial advice:

  • Use as much OSAP and personal savings as possible in the beginning
  • Use LoC later, once OSAP starts to accrue interest
  • Try to be as frugal as possible

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On ‎6‎/‎22‎/‎2018 at 6:14 PM, 2hopeful said:

So is the basic financial advice:

  • Use as much OSAP and personal savings as possible in the beginning
  • Use LoC later, once OSAP starts to accrue interest
  • Try to be as frugal as possible

Use the LOC is possible to absorb the OSAP loan if the rate of interest on the OSAP loan is greater than the LOC (which it will be) - assuming doing so does not use up so much of your LOC that you have no more flexibility with things.

Get every bursary your school will allow you to get - make a point of applying. It is often considerable sums of money.

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The most common strategy is to max out government loans/bursaries during med and then pay them off with your LOC once you start residency and they begin to accrue interest.  Some people in Ontario do RLIRP instead, and the government picks up your interest on your government loans during residency in exchange for a fairly liberal ROS - if you're absolutely sure you plan to practice in Ontario, there's no harm in it except that plans change and depending on the job market in your specialty, it may be prudent to retain your mobility, and there are a few other plot twists (you can't do fellowship, can't locum for more than a year, etc).  I will likely stay in Ontario but I still decided not to bother with RLIRP.

Honestly people's budgets are so different that as long as you HAVE one (I find using a budgeting app really handy for this) you're probably good.  The best way to do it IMO is to get an app, track all your spending for a month without trying to change anything, just to see where you are and where you may be hemorrhaging money (take out/eating out is my achilles heel financially).

One helpful thing may be to look up the PGY1 salary (it differs between provinces, but it's a guidepost at least) and what you will get monthly, and see how your budget lines up with that.  Then you can look at how your current amount of spending will stack up when you start residency, and how much you'd have left over each month to go towards your debt/savings/emergencies etc and see if you're satisfied with that.  Then maybe shave off a bit more if you want to live more frugally and maybe have a quality of life bump at the end of medical school, and if you want to account for the fairly large expenses of 4th year medical school (electives, CaRMS, LMCC, etc).  But it gives you somewhere to start, at least.

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7 hours ago, ellorie said:

The most common strategy is to max out government loans/bursaries during med and then pay them off with your LOC once you start residency and they begin to accrue interest.  Some people in Ontario do RLIRP instead, and the government picks up your interest on your government loans during residency in exchange for a fairly liberal ROS - if you're absolutely sure you plan to practice in Ontario, there's no harm in it except that plans change and depending on the job market in your specialty, it may be prudent to retain your mobility, and there are a few other plot twists (you can't do fellowship, can't locum for more than a year, etc).  I will likely stay in Ontario but I still decided not to bother with RLIRP.

Honestly people's budgets are so different that as long as you HAVE one (I find using a budgeting app really handy for this) you're probably good.  The best way to do it IMO is to get an app, track all your spending for a month without trying to change anything, just to see where you are and where you may be hemorrhaging money (take out/eating out is my achilles heel financially).

One helpful thing may be to look up the PGY1 salary (it differs between provinces, but it's a guidepost at least) and what you will get monthly, and see how your budget lines up with that.  Then you can look at how your current amount of spending will stack up when you start residency, and how much you'd have left over each month to go towards your debt/savings/emergencies etc and see if you're satisfied with that.  Then maybe shave off a bit more if you want to live more frugally and maybe have a quality of life bump at the end of medical school, and if you want to account for the fairly large expenses of 4th year medical school (electives, CaRMS, LMCC, etc).  But it gives you somewhere to start, at least.

I think because I took the year off, it's weird feeling like I will have no "income" again as a student. Rather, I am just accruing more debt ontop of my existing undergraduate debt. I had a whole plan of how to divide up my income into my TFSA, emergency, and daily living expenses. I feel like all of that goes out the door now without any income and sort of just this LOC of 275K and how I can spend it most reasonably in the next 4 years+.

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25 minutes ago, 2hopeful said:

I think because I took the year off, it's weird feeling like I will have no "income" again as a student

Man I feel this. This is what I'm feeling exactly. It's going to be weird again to be super-frugal, but I guess it's the way to go.

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24 minutes ago, hartk48 said:

Just curious... does OSAP start adding interest to the loan during residency or the interest starts applying after residency?

The federal part of the OSAP loan which is more than half starts accruing interest immediately after you graduate, the ontario part starts accruing interest 6 months after you graduate. All in all, it is generally better to pay off your OSAP with your LOC immediately after graduation although the benefit of doing so isn't really that great until the Ontario part starts charging interest. If you end up doing family medicine, you may qualify for a loan forgiveness program for doing some rural rotations or something like that. 

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59 minutes ago, Edict said:

The federal part of the OSAP loan which is more than half starts accruing interest immediately after you graduate, the ontario part starts accruing interest 6 months after you graduate. All in all, it is generally better to pay off your OSAP with your LOC immediately after graduation although the benefit of doing so isn't really that great until the Ontario part starts charging interest. If you end up doing family medicine, you may qualify for a loan forgiveness program for doing some rural rotations or something like that. 

just to be 100% clear - by graduation you mean completing residency, correct?

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Just now, hartk48 said:

just to be 100% clear - by graduation you mean completing residency, correct?

No, completing medical school. You can keep your LOC for residency but your OSAP starts going into repayment at the end of medical school. 

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1 minute ago, Edict said:

No, completing medical school. You can keep your LOC for residency but your OSAP starts going into repayment at the end of medical school. 

Got it. Still better than nothing! Thanks

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