Key Financial Decisions To Consider During Residency

$$$. Not something that’s in excess for most residents. For those who do not know, residents are doctors who are completing their final stages of medical training. We make a fraction of the salary Attendings (doctors who have completed medical training) make. We work 70-80 hours a week while bringing home $XX,XXX. Make it make sense! Still, it’s so important to make financially sound decisions now so we can set ourselves up for success. There are some steps I’ve been taking and I wanted to share them with all of you. Again, there is an ATL townhome with a rooftop waiting for me.

Eliminate Credit Card Debt. Y’all, this is the very first thing I did. Money was extremely tight during medical school. I also had that period of time when I did not get financial aid because I had not passed STEP 1. I relied on credit cards (and a personal loan) to make it through the rest of medical school. I realize this is not a reality for many, but I had a gap year job before starting residency. I took those funds and really paid down my debt. I now only use one credit card I’ve had for years. I pay off the balance before it’s due so I am not charged interest. I use the credit card like a debit card, ensuring I have the funds to pay whatever I charge. The reason I still use the credit card is so I can maintain a track record of good credit history and get cash rewards. The ability to show a long standing history of good credit is so important when it comes to receiving loans for homes and so much more. The only debt I currently owe is comprised of my student loans. Speaking of…

Sign up for the Public Service Loan Forgiveness program. Get those loans repaid, y’all. Through this program, you pay on your loans for 120 consecutive months (based on your income). After that time period (10 years), the balance is forgiven. Because of the covid-related pause on student loans, I have not had to pay on them as of yet. HOWEVER, every single month that goes by (yes! without payment!) counts toward the 120 month requirement. There are forms you must complete yearly to authenticate your employment at a qualifying site and your salary (for income-driven payment plans). Be sure to submit those forms annually so there are no discrepancies once your 10 years are done.

Set up an Individual Retirement Account (IRA). Highly recommend. It’s always a good time to save for your future. You can choose between a ROTH or Traditional IRA based on income and when you want the funds to be taxed (now or later). Most residents can qualify for the ROTH IRA based on an individual income of < 144,000 for the 2022 tax year. You can establish your IRA through a bank or an investment firm. My older brother helped me get mine up and running. Also inquire about your employer’s options for retirement accounts. Some institutes may match your contribution.

Work with an accountant/financial advisor. Y’all, I started working with Intrinsic Accounting this year and I’m so so glad I did. I have income as a medical doctor and as an influencer so I want to ensure my business and funds management are set up for success. Intrinsic Accounting filed my taxes, walked me through tax payment as a business owner, and provided so many tips for financial wellness. They are such a wealth of information and provide an array of services. I highly recommend working with them.

Secure Additional Savings. There are so many ways to do this. In addition to contributing to my IRA on a monthly basis, I have auto deduction set up to contribute to my savings on a weekly basis. My IRA money is for later in life. I do not touch it. I forget it exists. Savings are for in case of emergency now. Savings are also for my house fund.

Tithe. Y’all, I believe in doing this for sure. I have been tithing—bringing 10% of all I make to my church—since I was 13 years old. There is no doubt in my mind my finances are blessed BECAUSE of this act of faith. That $10,000 scholarship I received for the amount I needed when financial aid was taken from me, the amazing job I had to cover me during my gap year before residency, all the paid collaborations I am securing for SAC. At certain points in my life, cash has been low. Still, I have NEVER been without. You can’t out beat God’s giving ~ Malachi 3:10

I hope these tips and considerations are helpful. In medical school, I got used to doing so much with so little. That time in my life really did provide amazing lessons on financial stewardship. Saving has become something I so enjoy and has become a goal I have so much fun monitoring. Residents, we can achieve financial wellness even while we are being exploited for free labor. Ha! Happy Friday, y’all! Seven more days until vacay!

xx,

Photos by Sweetie Mensah

Preset by Tina Smith