Living Like a Resident
There is a fairly well known concept that’s floating around called “living like a resident” as a way to help medical professionals put themselves on solid financial ground. The concept is fairly simple, after you graduate residency or nursing school and get a well paying job, continue living as you have been in order to pay off student loans and other debts and maximize your investments. In today’s blog I’m going to give you a brief overview of why you should live like a resident and an often overlooked critical component of doing so.
Why You Should Live like a Resident
After coming out of residency or nursing school, you’ll likely be making more money than you ever have before, which is great. However, that also means that the pull to greatly upgrade your standard of living will be hard to ignore, so you have to be careful in trying to do everything at once. For doctors, you may be thinking “I’m making 250k now, I can start making major purchases” but the fact is you’ve likely already spent more than 250k on medical school. Even though you’re making a high salary, you are still not on solid ground yet, as you have to deal with student loans, as well as a myriad of other debt, whether that’s car or house or credit card debt. By living like a resident for 2-5 years after you finish residency, you’ll be able to pay off a good chunk if not all of those loans and then be able to start rapidly building wealth, as opposed to trying to catch up with your spending for the rest of your life.
Often Overlooked Component
For those who have spouses or partners and are looking to live like a resident, please have a conversation with them about your plans. This is a very simple concept, and perhaps that’s why it’s so often overlooked, but if you plan to live like a resident make sure that you’re both on board. Financial issues can be a huge thorn in a relationship, so being proactive in making decisions about lifestyle is a great way to avoid any potential conflict. Taking the path of living like a resident is a great way to build a solid financial foundation, but nothing destroys that faster than a partner who isn’t onboard with the plan.
For those who have questions, comments, or ideas, please comment on this post or send me an email, I’d love to hear your feedback.