Written by: Nichole Coyle, CFP®
Residency is a pivotal stage in your career as a physician, marked by intensive training and countless hours dedicated to patient care. Amid the rigorous demands of medical residency, one of the most daunting challenges residents face is managing your finances on a limited salary. We’re here to help explore the realities of living on a resident’s salary and offer practical tips for financial well-being during this crucial period.
The Reality of a Resident’s Salary
Medical residency salaries vary by location and specialty, but they generally fall far below the average physician’s income. In Ohio, according to Salary.com, the median average salary is $56,767 in 2023. While residents often earn a modest income that covers their basic living expenses, this salary can still be challenging, especially considering the mountain of student loans many residents carry.
Managing your finances effectively during residency is vital to alleviate the financial strain and build a solid foundation for your future. Here are some budgeting tips to consider:
Develop a monthly budget that outlines your income and expenses. Track your spending to ensure that you’re living within your means.There are many ways to do this including spreadsheets, online tools like mint.com, and even with your financial planner. We want to help you simplify your finances so budgeting is included in all of our financial plans at Impact.
Focus on covering essential expenses such as rent/mortgage, utilities, groceries, and insurance. It may seem obvious that these should be your top financial priorities, but keep your budget in mind especially when looking for a new apartment or if you are looking to buy a house.
Limit non-essential spending, such as dining out, entertainment, and unnecessary shopping. Remember that this is only a short phase in your long-term career. The time will come that you have more expendable income and can loosen up your budget. But, while in residency it’s wise to live within your means and not have the added stress of credit card debt or living paycheck to paycheck.
Tackle Student Loans: Consider your student loan repayment options. Most residents may qualify for income-driven repayment plans, which can ease the burden of high student loan debt. At Impact, we create a custom student loan repayment plan for you based on your income, family and marital status, budget, forgiveness possibilities, and more. If you are interested in learning more, schedule a free discovery call or visit our website.
Seek Financial Guidance. Consulting a financial planner can be highly beneficial during residency. They can help you create a custom financial plan, provide advice on managing debt, and offer guidance on investments and retirement planning. Because we mainly work with physicians, we have a specialized program to help you find the best student loan repayment plan to suit your unique situation.
Prepare for the Future. Though living on a resident’s salary can be challenging, it’s also a temporary phase. As you progress in your medical career and transition to an attending physician, your financial situation will improve. This is still an opportune time to build a strong financial foundation.
In addition to budgeting and student loan repayment planning, talk with your financial planner about building up your emergency fund and starting your retirement savings. By building your emergency fund, you can help cover unexpected expenses and emergencies. And by starting your retirement account early, even with a small consistent contribution, your account can grow significantly with time.
With all the time and energy you spend on your education and growing your skillset, it’s important to also educate yourself about personal finance and investing. Seek out a CERTIFIED FINANCIAL PLANNER™ who can guide you and provide you with knowledge that can benefit you throughout your life.
Living on a resident’s salary is undeniably challenging, but it’s a challenge that can be navigated with thoughtful budgeting, financial planning, and the right mindset. By addressing financial matters wisely during your residency, you can set the foundation for your future financial wellness.
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With over 13 years of experience, we specialize in financial planning and wealth management specifically for physicians and your families. We care about your financial wellbeing and take what worries you most about your finances (topics like taxes, investing, student loans, and retirement) and we create a plan that focuses on your unique goals. Giving our clients the option for you to meet with us in-person or virtually provides you with added flexibility for us to work together whether you are struggling to find time in your busy schedule or you are moving across the country.
residency • fellowship • attending
residency • fellowship • attending
