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Budgeting in Medical School — What You Should Know

Rice and beans are a lunch and dinner staple for Sean Kiesel. He knows which station sells the cheapest gas. And the temperature in his house stays between 62 and 65 degrees in the winter to save on heating costs.

Kiesel, a fourth-year medical student studying osteopathic medicine, and his wife have become pros at cutting costs wherever they can to be able to afford the massive bills and six-figure debt that are par for the course in obtaining a medical degree.

“It is incredibly tough. My wife and I were very lucky enough that we were really strict with budgeting and we kind of had a real good financial sense beforehand,” he said.

Setting a budget right out of college is a crash course in adulting for any young professional. But med students and residents face extra financial burdens of paying off costly medical school and undergraduate loans, exam fees and interview costs while juggling a high pressure residency along with their everyday living expenses.

The Cost of a Medical Degree

The average cost of attendance for medical school at a public university is $37,556 per year, including tuition, fees and health insurance, for an in-state resident. The average cost for private, non-resident med students runs more than $62,000 per year. That’s a massive cost for a medical education. 

The median student loan debt for doctors is around $200,000, more than six times higher than the average national student loan debt of $29,800.

Then there is the medical residency that lasts for three to seven years, depending on the type of medicine. After finishing med school, doctors are on the hook for the thousands of dollars it takes to interview for residencies, plus their licensing fees. 

“Nobody really understands how much every step of the way costs,” said Kiesel. “I think it’s just all the extra little things that people don’t realize that come beyond just tuition. It’s paying for all this stuff as well. It’s not built into your loans and you just have to make it work.”

Kiesel, who was in Arkansas for his third year of med school, moved back home to Utah for this fourth-year of med school so that he could be within driving distance of residency interviews in Utah, Colorado, Idaho, Nevada, and Arizona. He is planning for about 15 residency interviews. 

Typically, each interview costs hundreds, if not thousands, between airfare or other travel costs, hotels and food. But with driving and staying as local as possible, Kiesel said he’s hoping to spend around $200 per interview or about $3,000 total.

“A lot of people end up taking out personal loans to cover the cost of residency applications,” he said. “I know somebody last year that took out a personal loan to the tune of about ten grand to cover all these expenses.” 

Kiesel estimates he will begin his career with upwards of $300,000 in student loan debt. While he will pay what he can to cover the interest during his residency, Kiesel said he plans to hit the debt hard once his residency is over to knock it out as soon as he can. 

Budgeting Tips From Doctors 

The median salary for a physician in the U.S. is $208,000, according to the Bureau of Labor Statistics. But medical residents earn, on average, $61,200 per year. While residents in family, internal and emergency medicine bring in less — between $57,400 to $58,600, on average —  specialties such as allergy and immunology, medical genetics and infectious diseases can bring in as much as $67,500 per year on average.

There are numerous financial aid options: many med students use federal Direct Unsubsidized Loans and Direct PLUS Loans, according to the AAMC and organizations for specific types of medicine have their own list of available financial aid and scholarships.

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“If you do things like pay for lattes daily, have a pet, get your hair blown out for job interviews, fly out to friends’ weddings, buy extra lives on video game platforms, use Amazon Prime, and other personal expenses,” De said. “You have to have line items for these if you are going to budget.”

Spend money wisely on food and groceries

Food is a major place to cut back on spending, Kiesel said. In addition to his rice and bean meals, Kiesel bought meat in bulk and then stretched it out between recipes. De saved money by forgoing alcohol most of the time and couponing. Both avoided eating out whenever possible.

Take advantage of residency perks

“I lived in grad student housing with roommates,” De said. “Good residency programs have a smartphone allowance. You need it for work because someone might call you with a question about your patient.”

Get creative about travel costs

In addition to driving to his residency interviews, Kreisel said he’s planning on “couch-hopping” with friends and family as much as possible to avoid paying for a hotel. 

De took advantage of travel rewards to help pay for her flights. “I am very good at leveraging regular bills to generate frequent-flyer miles,” she said, “so that helped with any travel.”

Be smart about life’s little luxuries 

Online forums are a great place to learn about extreme budgeting and tips to cut costs. But sometimes you need to cut yourself a bit of slack — within reason.

“If you consistently break a budget category and that item makes your life easier or happier, try to restrict another one,” De said.” Perhaps keep the Lyft rides home from the lab for safety, but ditch the cable bill. You can split YouTubeTV with five people, and it works out to almost nothing.”

Consider refinancing your loans

There are several options for loan repayment, including refinancing those federal loans as long as you aren’t currently utilizing federal benefits. Kiesel said he plans to refinance his high-interest government loan with a lower-interest private loan when he graduates. 

There’s also several options for med student loan forgiveness programs, including service and employer-based programs, as well as those through the government and military. 

Disclaimer: The opinions expressed by the interview subjects are not necessarily those of Earnest. 

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.