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How to Survive Intern Year…Financially

Intern year has just begun for thousands of freshly minted residents across the country. This is a super exciting and rewarding time. But it is also an extremely challenging time. It’s a year spent drinking from a fire hose in terms of learning how to be a doctor, how to managed patients, how to navigate a hospital, and myriad other things.

I can still remember my first day as a surgical resident at NYU way back in 2013. I was the overnight surgical resident at the VA Hospital, taking care of all of the surgical patients, including fresh cardiac surgery patients, as the only resident in the hospital. Needless to say, I was terrified.

But I got through. And so will you. Of that, I have no doubt. When you do have doubt, just keep in mind that if all of the other doctors in the world have done it, you certainly can as well!

Your focus during intern year should be on doctoring

I’m always very careful to say that during residency training, especially intern year, your focus should be on becoming the best doctor that you can be.

That is the whole point of your training…to train.

But, that doesn’t mean that you should neglect everything else

Take care of yourself. Eat well. Exercise. Spend time with friends and family.

Doing these things maintains and enhances your overall well-being and actually makes you a better doctor.

Ignoring them is a surefire route to burn out.

How do I know? Well, because I neglected many of these things and experienced intense burn out as a trainee.

And financial well-being is an important but way too neglected part of your overall well-being

I also found this out the hard way. As many of your know, I totally neglected all of my finances throughout my training. This led to a ton of stress that affected me way more than I ever realized. This is very true for probably most physicians in the world!

This stress grew until I actually faced my mistakes head on and vowed to make things better.

Related Posts:
What I Did (And Am Doing) To Fix My Financial Mistakes – Part I
What I Did (And Am Doing) To Fix My Financial Mistakes – Part II

And once I did address my financial situation at the end of my training and came up with a plan, I found that my overall well-being improved by a HUGE amount. And by that point, I hadn’t had my income increase by even $1. Just having plan gave me a huge sense of relief.

Now I knew that as long as I followed my plan, I would reach my financial goals.

My whole goal with this blog is to help doctors improve their financial well-being to practice medicine and live their lives on their own terms. And this includes doctors in their intern year! But it really applies to just about any doctor 🙂

So, here is my guide for you to survive intern year financially!

These are the high yield steps that you can take to maximize your financial well-being as an intern in the limited time you have while maintaining your focus on your training, where it belongs!

intern year

1. Limit lifestyle creep

What?!

Lifestyle creep…as a resident??? Seems like an oxymoron.

Pretty much 100% of the time, you will see this advice in reference to trainees that are about to become attending physicians.

But, the truth is that there can be significant lifestyle creep going from a medical student to a resident. It is the first time that you are likely making a true salary. You go from paying for your work/education to getting paid for it.

It’s really exciting.

However, it’s important to remember that while you are a doctor and you are making money, you are not yet making doctor money. And also that you are likely very much in debt (more on that later).

Selenid and I did this all wrong. Throughout my training, we had a savings rate of 0%…actually it was probably negative given that we took out credit card debt. Before we had kids, we used all of our potential savings to satisfy lifestyle creep. We ate out too much, spend stupid money at restaurants and on activities/excursions, etc.

It’s not that we shouldn’t have spent any money to enjoy ourselves. But we should have moderated it in a way that we could also maintain a savings rate.

2. Create a savings rate

To dovetail off of my above point, work hard to create a savings rate. Honestly, I don’t think it even matters what your savings rate is in intern year or during training. 20% is ideal but even starting at 1% is fine. Then grow it. It’s about creating a lifelong habit.

Here is what you should include in your savings rate.

3. Come up with a plan for student loans

refinance student loans

This is a biggie. Most of you will have student loans. The average student debt for graduating medical students currently is around $200,000.

For me, my student loans were the biggest source of financial stress during training. I had over $400,000 from college and medical school. And I had no plan. None at all. So I deferred them and put them in forbearance for 7 years.

The amount seems so insurmountable. I had no idea how I was going to pay these off and felt they would haunt me the rest of my life.

Then, I came up with a plan. My plan would allow me to pay off all of my loans in 5 years. All of a sudden, they didn’t seem like a huge stressor. It still sucked to have them, but I knew that if I followed my plan I would get rid of them soon enough. As long as I followed my plan, no need to worry.

The problem was that I didn’t come up with my plan until the very end of my training.

Related Post:
Revealing My Secret Strategy to Pay My Huge Student Debt

So, make sure that you take some time to develop a plan for your student loans. Here is some general advice:

  • If PSLF is your plan, set up your paperwork and make income based payments each month
  • If PSLF is not your plan, figure out how much you can pay each month (this is part of your savings rate) and consistently pay that much each month

Regarding PSLF,

  • If you have a long training time like me (6 or more years), PSLF can be a good option regardless of future earning potential
  • If your debt to future income ratio is >1, PSLF is likely a good option
  • But, if your debt to future income is <1 (and in a normal length residency), PSLF may not be a good option for you

(Obviously, these are generalizations and you should take consideration of your individual circumstances.)

Related Post:
How I Refinanced My Private Student Loans
The Wrong Way for Doctors to Think About Loans

4. Make a budget

Again with the dreaded budget.

But honestly, just do it. Just make a budget. It really is pretty painless. And it is especially useful as a trainee when your income is more limited.

Selenid and I never really budgeted while I was in training. And it was so stressful because I never had a good sense of how we were doing financially on a monthly basis. I worried about having enough to pay rent. Forget about a savings rate.

Download my budget template here and take the 45 minutes required to make one. It will help automate your journey to financial success.

5. Get the right insurance

This is often overlooked by trainees starting intern year and beyond. And the reasons are that it is assumed to be too expensive and it is assumed that the group insurance included by the training program is sufficient.

Let’s break it down.

As a trainee,

  • You need life insurance if someone like a spouse or kid(s) depend on your income. You need enough life insurance so that if you died, they would comfortably survive. If your residency group life insurance policy is enough for that, great. But it’s likely not.
  • You need disability insurance if you are not financially independent. And you need own occupation disability insurance. You need enough to survive if you cannot work. Your group policy likely is not enough and/or not own occupation.

Related Post:
Life Insurance Advice for Physicians

Getting these insurances sooner than later will also ensure better rates as you are a trainee and will, by definition, be just about as healthy as you will ever be in the future.

I didn’t have life or own occupation disability insurance as a trainee. Despite being married and having 2 kids. I got lucky. Anything happening to me would have meant financial devastation for my family. It’s not worth the risk.

If you would like to speak with a trustworthy insurance broker, check out my Recommended list.

6. Read your contract

There are a lot of little benefits, financial and otherwise, that you may have included in your standard resident contract. But you won’t know if you don’t read it.

Don’t be like me. Read your contract. It just takes a couple minutes.

7. Invest

I put this last because it honestly is probably the last priority as an intern/trainee.

If you are doing the 6 things ahead of this on the list, you are golden. You are better off than most trainees in there intern year or beyond. Heck, you’re better off than most physicians. Period.

But, if you can do those things and also invest a little bit, that’s even better!

prudent plastic surgeon graduating to success
Looking for a one stop shop to get your financial plan in order? Look no further!

How can you figure out if you have enough to invest? See #4 above (Make a Budget)! And once you determine if you have enough to invest, you’ll need to figure out where you should invest it.

Email an HR person at your program to see what is available to you. Many programs will have a 403b or 457 investment account available for trainees. I would strongly encourage you to consider making Roth contributions to these accounts if possible. This way, your investments are taxed now (in your current low tax bracket) and never again in the future (when your tax bracket is much, much higher.)

If these accounts are not available, you can also invest up to $6,000/year to a Roth IRA account (likely by direct contribution rather than through the backdoor given your lower income).

Related Posts:
A Quick and Dirty Guide to All Types of Investment Accounts: Where Should You Put Your Money?
3 Reasons I Don’t Invest in a Backdoor Roth IRA
The 3 Most Tempting Current Investments to Avoid

And that’s it!

Each of these steps can be set up and automated in probably an hour or less each. And then you can continue these habits forward throughout your life with minimal effort.

Do this and I promise you will reach financial well-being and freedom.

You can do that and still maintain your focus in the right place, on your training. In fact, you’ll be able to focus even more on becoming the best doctor compared to your colleagues (attendings included) who are also working on managing their financial stress!

Looking for some more financial nuggets?!

What do you think? Did you pay attention to your finances during intern year or in training? Did this help or hurt you? Were you still able to focus on your training? Let us know in the comments below!

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    The Prudent Plastic Surgeon

    Jordan Frey MD, a plastic surgeon in Buffalo, NY, is one of the fastest-growing physician finance bloggers in the world. See how he went from financially clueless to increasing his net worth by $1M in 1 year and how you can do the same! Feel free to send Jordan a message at [email protected]

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