Money Tips for Incoming Medical Students


First of all, Congratulations!  You made it!  Before this point, you were known as one of many tens of thousands of "pre-meds".  But now you have officially taken that first step to become one of the future physicians of America.  As you prepare for your white coat ceremonies, I have a few money tips for you.  I know you've got a lot of things on your mind, so I'll keep this short and sweet...

Tip #1 - Don't Max Out Your Student Loans

I'm sure you are aware that student debt has become a major socioeconomic problem in America.  Student debt has risen to become the second largest consumer debt - behind only mortgage debt.  Medical school debt is no exception.  According to the AAMC, the class of 2016 graduated medical school with a median debt of $190,000, a 4% increase over 2015.  With an average cost of attendance of $59,026 and $80,753/year for public and private institutions respectively, it is likely that student loan will have some role to play in your medical education.  I encourage you to do everything you can to minimize the amount you borrow.  While it is difficult to predict how much money you will need in advance when you are just starting at a new school, perhaps in a new city.  But once you get settled in and figure out how much your living expenses will be, know that you have 120 days from the original disbursement date to cancel part or all of your federal student loans.  

For example, you borrowed $15,000 in unsubsidized loans for the fall term.  At 6.8%, this loan has accrued approximately $335 of interest to date.  If you return $5,000 of this loan, that will reduce your principal balance to $10,000 and the outstanding interest to $222.  Your student account will be billed for the amount of loan funds returned.  However, instead of a $5,000 charge, it will be a $4,950 charge because you don’t have to pay the loan fee (which was 1% of the borrowed amount). 

Tip #2 - Hunt for Deals to Furnish Your New Place

One of the biggest expenses of starting life in a new city is getting settled into your new place.  New furniture, new appliances, new everything costs money.  Instead of purchasing everything new from the store, I encourage you to hunt for bargains.  The best place to find furniture and appliances locally is via Craigslist.  When I started medical school at University of Missouri, I purchased a set of beige couches from Craigslist for $350.  The same set of couches I sold for $450 when I graduated in 2013.  Or if you're used to purchasing everything online, check out my previous post - Future Proof Toolkit: Saving Money Online.

Couches bought for $350, sold for $450 five years later.

Couches bought for $350, sold for $450 five years later.

Tip #3 - Don't Buy Textbooks!

Here is the thing about medical textbooks - they cost a lot and you probably won't use them all that much.  I can count on one hand how many textbooks I use on a regular basis throughout residency.  Even when I was in medical school, most of the "required" textbooks were used once for a class and then never to be seen again.  And that was before the age of iPads and Kindles.  If I was starting medical school all over again, I would do everything in my power to NOT purchase any textbooks.  If you are required to have a specific book for a class, I would try finding an eBook version online, borrow it from the local library or even check out the many textbook rental services available.

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Future Proof, MD

Dr. Bo Liu is an aspiring radiologist-in-training and the founder and editor of the White Coat Money Blog.  He has an interest in interventional radiology and helping his medical colleagues get ahead in this mad world of medicine and money.  When he's not crushing the list at the PACS station or typing up your next favorite blog post, you can usually find him at the local badminton club, movie theater or the most recently opened restaurant.