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 No need for PM. Med school is expensive. Life is expensive. The typical med student will rack up 150-250K in debt and that’s normal. Fear the debt, but also love it - it lets you live normally for the next 10-12 years. You’ll pay it off quickly once you’re done so don’t sweat an extra few thousand here and there. 

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2 minutes ago, ZBL said:

 No need for PM. Med school is expensive. Life is expensive. The typical med student will rack up 150-250K in debt and that’s normal. Fear the debt, but also love it - it lets you live normally for the next 10-12 years. You’ll pay it off quickly once you’re done so don’t sweat an extra few thousand here and there. 

Agreed, but also don't get discouraged when >50% of your classmates have much less debt due to family support.  Many of my medical school classmates didn't even get LOCs until we started residency. 

Don't count pennies, but don't also buy 8$ smoothies everyday with your LOC and you'll be okay. Make sure to apply for gov't student loans, ensure you are eligible for any bursaries from the govt and as well your medical school - usually this requires a short application. Apply for any extra bursaries/scholarships as they hit your email.  

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14 minutes ago, JohnGrisham said:


Don't count pennies, but don't also buy 8$ smoothies everyday with your LOC and you'll be okay. Make sure to apply for gov't student loans, ensure you are eligible for any bursaries from the govt and as well your medical school - usually this requires a short application. Apply for any extra bursaries/scholarships as they hit your email.  

Agreed, this is the same advice I was going to give.

Think carefully about what’s actually worth spending money on for you, and give yourself extra allowances to spend money on things that will make your life easier. A budget isn’t a horrible idea, just to keep yourself from surprising yourself by how much, for example, you can spend on fancy coffees in a month when you’re studying for your first round of exams :p

And some people around you will spend a lot of money - In early pre-clinical years especially, I remember sometimes daily social medica posts of people eating out, or people going on 2-3 month international vacations during our precious time off. If you want to do that, it’s probably not a problem - the people with 250K debt can pay it off almost as easily as those with 150K debt. It just takes longer, and that might not be a priority for you. 

 

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6 minutes ago, frenchpress said:

And some people around you will spend a lot of money - In early pre-clinical years especially, I remember sometimes daily social medica posts of people eating out, or people going on 2-3 month international vacations during our precious time off. If you want to do that, it’s probably not a problem - the people with 250K debt can pay it off almost as easily as those with 150K debt. It just takes longer, and that might not be a priority for you. 

Also with a great interest rate, there is not necessarily a rush to pay the debt off – long term it might make more sense to hold the debt and invest your income for a better return.  

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Just now, FrannieLydon said:

Also with a great interest rate, there is not necessarily a rush to pay the debt off – long term it might make more sense to hold the debt and invest your income for a better return.  

Prime -0.25 is always great in relative terms. But if prime is 6%, or 10% it’s not great in absolute terms. Which is not to fearmonger, but just to say that it’s important to remember that those interest rates can change, and you have no control over what it will be in 6-10 years when you’re done residency training and have access to that larger income to pay things off. Which is why I’ve always been shooting for that low end of the standard debt estimates personally. Although with the COVID recession/depression on the horizon, interest rates a likely to be low for while.

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8 minutes ago, icymeia said:

People say to be frugal but not extremely... how to find that line? I don't know how much money is appropriate to spend in a monthly budget, so I'm curious to know how other people do it!

The amount that is appropriate to spend is the amount of debt you’re willing to take on. It is a personal decision.

To make a budget: Open a spreadsheet. Put all your fixed living and school costs into it (housing, groceries, tuition, car insurance, etc), as well as what you think you’d like to spend on extras (restaurants, etc). If you aren’t sure, take a stab at it and then revisit it after a month or two and see how far off you were, what things you missed, etc. Revise accordingly based on your own preferences as you go. You might start off overly frugal, or overly spendy, and learn over time what your priorities are and what’s worth debt to you and what isn’t.

Multiple that by 12 and you can see how much you’ll roughly spend in a year. Then add in what you think you’ll spend on big purchases in a year (travel, buying a car, etc.). 

Multiple that by 4, and you’ll likely see how many  people end up spending 200K or more in 4 years. 

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1 hour ago, JohnGrisham said:

 Many of my medical school classmates didn't even get LOCs until we started residency. 

Wouldn’t you be in less of a need for a LOC in residency since you make 50+K and you no longer pay tuition? 
Maybe because it’s the time people starting looking into buying a home?

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I graduated with a total of about 150k in debt.  This was entirely from medical school (Ontario tuition).  I had no parental support in medical school and no savings going in, but I also had no debt from undergrad so I went into it with a clean slate in both directions.  This was partly on my line of credit, partly Alberta/Canada student loans, and partly (but not massively) bursaries from the school.  I did not work during medical school, but I did take a summer research studentship for two summers, for which I earned a small but not negligible stipend.

What kind of budget is reasonable depends partly on cost of living where you live.  So it's hard to say, really.  When I lived in London I paid about 700/month in rent.  I didn't actually have a formal budget at the time (I really should have, and I do now) but I had a ballpark in my head for how much I wanted to spend on different sorts of things.  I never travelled internationally but took the occasional trip by bus.  I ate out or got take out fairly frequently (at least 1-2 times a week, probably more) but don't drink alcohol at all and so never went out to parties or bars.  Didn't have a car.  Bought new clothes periodically but mostly from places like Old Navy or I shopped in the sale bins.  Bought some entertainment items (mostly video games) but nothing too luxurious - I didn't have a TV at home.  Had an iPhone a few models behind the most recent with a small amount of data.

People choose to prioritize different things, too.  I don't travel at all, so I save a lot of money there, but I really like to eat out.  I don't really spend money on clothes and I don't really care about having the newest and fanciest anything but I like electronic gadgets and video games.  I don't drive but I take the occasional taxi if I'm tired.  For other people they might do the opposite in all of those areas and also still have a very reasonable budget.

Currently as a PGY5 living in downtown Toronto I would say my total monthly budget including rent, all bills, my million insurance policies and all of my spending is about 4000/month.  This has crept up slowly as my salary has increased, and throughout residency I have never spent more on a monthly basis than I was making, and have typically had anywhere between 300-900 dollars left at the end of the month.  When I was a PGY1 I was spending about 3000/month.  Currently I have about 800 dollars at the end of the month, which goes directly towards paying off my line of credit.  Any money I earn from call stipends, or other incidental cash (tax refund, awards, whatever) goes into a savings account for major expenses like the MCC, Royal College, or other big purchases (e.g. a new laptop when mine broke).  This system has worked well for me.

When I was in medical school I certainly wasn't spending more than 2000/month.  Most of the increase in my current budget comes from rent (I am paying probably about 2.5x what I was paying in London) but some has come from allowing myself to spend a little more freely.  But not too much.

I would say absolutely don't spend more in medical school than you will be making as a PGY1 (not counting tuition), and ideally spend less so that you can have a little bump when you start residency, and also have a cushion to put to savings or paying back debt.  But again this is a little variable depending on if you do residency in a more or less expensive city than medical school.

Some people feel like "living within your means" includes living within the means you will (likely) have as a staff, but I just don't personally feel good about that.  I think it's better to live within the means you have now (which is nebulous in medical school with the LOC, so I interpreted that to mean as if I were making a bit less than a PGY1 salary).

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1 hour ago, medicmac said:

with a relatively low interest rate due to the pandemic, does it it become wise to invest some of your line of credit?
any opinions out there?

If you've never normally invested and know what you're doing, then no, there is no reason to start investing now with money that is coming at a negative 2.2%+ drag.

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