Exciting times! You just graduated, were matched, and have a residency starting soon. Here are the key financial areas to focus on before you get that first check.
Get your loans in order
Figure out exactly how and when you need to pay your loans. The main things you need to know are:
How much your payments will be?
What the total out of pocket will be over the life of the loan?
When your loans will be paid off?
If you should use a forgiveness program
Decide if you need to end your grace period early. Call your servicer to get set up, and make sure to put your annual update on the calendar for next year. Don't know who your loan servicer is? Login studentloans.gov to review all of your federal student loans, they'll also tell you who to contact in regards to your loans.
Make sure to get credit for your qualifying service while in residency, and submit your PSLF employment certification form annually.
Set a budget
If you’re making $55,000 a year, don’t expect a $4,580 check. Once you know what your net income will be, write out your expenses. Here’s a sample first-year resident budget based on the hundreds of budgets we’ve seen:
We used a simplified tax rate of 25%, which may not apply to you. Consult a tax professional for a tax breakdown based on your specific situation.
Build your emergency fund
Start by saving around $1,000, then work up to 3 times your monthly salary.
Save towards retirement
If you're offered a match through your employer-sponsored retirement plan, contribute enough to get the full match. By setting this up right away, you won’t feel the hit to your budget.
Pay off credit cards
If you accrued credit cards while in school, or maybe you're adding to them now before you're paid, it's time to pay them off once you get paid.
Your residency is a new chapter in your life. For the majority of you, this will be the lowest your income will be. Don't extend your financial commitments too far in expectation of a higher salary later. Live within your means now, so you can enjoy your money later.