I started setting up a financial budget since I was in college. Having a limited income through some grants, a part-time job at my college health center and some student loans made it necessary for me to have a budget. As I transitioned into medical school, I continued that mindset of knowing I still have a limited income (which I did exclusively through more student loans). It is such an essential skill that has set the foundation of my financial future that I wish people took more seriously. So whether you’re a medical student, resident, or fellow, managing your finances effectively through budgeting can help alleviate stress and prepare you for the financial responsibilities that come with being an attending physician. Here’s a guide to creating a realistic budget while in training.

Assess Your Income and Expenses

Start by understanding your monthly income and fixed expenses. As a resident, your primary income will be your salary, while medical students might rely on mostly on loans. List out all sources of income, including any side gigs, scholarships, or financial aid.

Next, list your fixed expenses. These typically include:

• Rent/Mortgage: Your largest monthly expense.
• Utilities: Electricity, water, gas, internet, and phone bills.
• Transportation: Car payments, car insurance, gas, public transportation costs.
• Insurance: Health, dental, disability, and possibly life insurance.
• Student Loan Payments: If you’re required to start repaying them during training.

Track Your Variable Expenses

Variable expenses fluctuate each month and include:

• Groceries and Dining Out: Food and beverages.
• Entertainment: Movies, concerts, subscriptions (Netflix, Spotify, etc.).
• Clothing and Personal Care: Clothes, haircuts, grooming.
• Miscellaneous: Gifts, travel, hobbies.

Tracking these expenses can help identify areas where you can cut back. I used spreadsheets for these while I was in medical school. Nowadays, I love using the Copilot app. But there are other apps like YNAB (You Need a Budget) that also helps keep track of these things.

Set Financial Goals

Setting clear financial goals is crucial for motivation and discipline. These goals could include:

• Short-term Goals: Saving for a vacation, emergency fund, paying off high-interest debt.
• Long-term Goals: Saving for a down payment on a house, retirement, or paying off student loans.

Having defined goals helps prioritize your spending and saving habits.

Create a Budget Plan

With a clear picture of your income, expenses, and financial goals, you can create a budget plan. Here’s a simple budgeting framework I use to consider:

• 50% Needs: Essential expenses like rent, utilities, groceries, transportation, and insurance.
• 30% Wants: Non-essential expenses like dining out, entertainment, and hobbies.
• 20% Savings and Debt Repayment: Emergency fund, savings, and loan repayments.

Adjust these percentages based on your situation. For instance, you might allocate more towards savings if you’re aggressively paying off debt or saving for a major purchase.

Automate Your Finances

Automating your finances can ensure you stick to your budget. Set up automatic transfers to your savings account and schedule automatic bill payments. This reduces the risk of late fees and helps build your savings consistently.

Cutting Costs

Identify areas where you can reduce spending:

• Housing: Consider living with roommates or in less expensive housing options.
• Food: Meal prep and cook at home instead of dining out.
• Transportation: Use public transportation, carpool, or consider biking if possible.
• Subscriptions: Cancel unused subscriptions and seek student and/or resident discounts.

Review and Adjust Regularly

Your budget isn’t set in stone. Review it at least monthly to ensure you’re on track and make adjustments as needed. I’m fairly regimented so I review my budget weekly while I also pay off my credit card bills weekly. Life changes, such as a higher rent come lease renewal or an unexpected car repair, can happen which necessitate budget tweaks.

Bottom Line

Creating a realistic budget while I was training was vital for my financial stability as a student. By assessing your income and expenses, setting clear goals, and regularly reviewing your budget, you can develop healthy financial habits that will serve you well throughout your career. Remember, the discipline and skills you develop now will pay off enormously in the long run. Happy budgeting!