When I got into Family Medicine residency, I was not very financially informed but I had learned to live frugally in college and medical school. I decided I was going to live frugally and pay off my student debt as fast as I could. Since I did not think I was planning to do any loan repayment plans/ options, I refinanced my loans to get the loan percentage down from 8.5% to 5%. This locked in that I had to pay this back without repayment programs because of the type of loan. In hindsight, I probably should have looked at repayment options, but I made a decision and it gave me one path forward.
At the beginning of residency, I needed a new car. I looked at all different cars and found a great deal on a Honda Insight Hybrid. It got 45 mpg and was a 3-year-old used one for $12,500 (side note: I had the car for 8 years, over 100,000 miles added on, only needing routine maintenance and sold it for $6,000; so very good value). From my first paycheck in residency, I paid $1000 dollars a month toward my loans. Then whenever I had the chance, I would put an extra $1000 towards loans. I shared an 800 square foot apartment with another resident and mainly ate at the hospital or home. I was determined to have my loans paid off fast. I was also saving for an engagement ring during this time as well and had to save up for about 6+ months. My residency class calculated our pay based on our average hours worked each week and it came out to approximately $11 dollars an hour.
On average in residency, I continued to live on a very low budget of about $1,000 per month. This included everything from rent, food, gas, travel, and clothes. It did not include loan repayment as discussed above. There were some benefits that saved me money such as a food stipend at the hospital when working and small amount of CME funds added for covering call for inpatient rehab that helped cover the cost of a CME trip.
I got married at the end of my second year of residency and spent most of our first three months of married life apart from my wife as she was finishing PA school. We moved into a 540 sq ft, 1 bedroom apartment for the final year of my residency. She started her job, and we continued living on approximately $1000 dollars a month for the two of us and put all of her salary towards loans and saving for a down payment on a house.
We had limited time together due to our work schedules, but it was a time that we were able to develop our relationship by going on dates involving free and cheap activities. We made financial choices that set us up well for the future without either of us really having any financial literacy or background other than we both really disliked debt and wanted to get rid of our student loans as fast as we could. I think this set us on a good path to continue to live this way when I graduated residency and started my attending physician job. This transitioned into a stage of “live like a resident”, which we still do today by choice. We are fortunate to have financial peace and can have the margin in our budget to make splurges when we choose.