Budgeting is a fundamental skill of adulthood that those in medicine don’t learn soon enough. I recently published a post called Got Debt?! The Truth About Paying for Medical School- Since We Can’t All Go to School for Free where I talked a lot about budgeting and how crucial that is to paying for medical school. But a lot of people don’t actually know how to budget and I didn’t learn until residency! Here’s are some things that I’ve learned along the way.
MAKE A THOROUGH BUDGET
Most people don’t keep good track of how much they are actually spending. In the medical profession we tend to be particularly bad at this because we take out loans and worry about the consequences later. “I’m on call so I deserve take out, I been studying all day so I’ma treat myself.” We have all been there and that’s how we end up spending $200 a month on take out. So the first step to stacking your coins is to know where your money is going.
List ALL your expenses: every single expense. Depending on where you live your costs may vary. As a New Yorker, I spend sooooooo much money on rent. I live close to my job so my commute is minimal and I don’t spend a lot on transportation. However, that expense is not negligible and when I take an uber and public transportation to get around outside of my job that adds up. Don’t have a washer and dryer in your place? Laundry counts too! Go to happy hour once a week? That counts too. All those expenses add up. If you are not sure, review you bank statements and bank account to see what you are spending money on and use that as a starting point.
Also be realistic. Do not pay all your bills with one check and have no money to eat until you get paid in 2 weeks. I distribute my bill payments across the month depending on when the bill is due and pay well before the due date to give myself an extra cushion. That way I do not have to worry if a random expense comes up that my account is empty until my next check. Some companies give you a discount if you set up automatic payments and paper statements. I pay all my bills manually before the due date to avoid overdraft fees and being overcharged for a bill and having to dispute it later.
Stick to your budget. If you really need to go over your budget, that money will need to come from elsewhere. I also give myself a spending allowance, that way I can buy whatever I want with that money without feeling guilty or affecting my overall budget. But that means once that money is gone, I can’t go out to dinner, take a $10 cab, or buy a pair of shoes without having to take that money from some of my other financial responsibilities. Taking out physical cash from the ATM can also help with sticking to your budget because physically watching your money dwindle is sad. Check you bank account at least once a day to make sure you are not overdrafting or someone is hacking into your account.
Here’s a list of some of the things I include in my budget:
Rent and utilities (electric, water, gas etc)
Transportation (gas, Uber, public transportation, visiting home)
Subscriptions (Apple Music, Spotify, Netflix, Hulu, Magazines, etc)
Toiletries (toilet paper, paper towels, soap, detergent)
Health (dental work, copay, prescriptions, etc)
Books and educational expenses
Spending allowance (going out, makeup, clothes, dinner)
Adjust your budget as needed. Keep your budget somewhere you can adjust as needed like a notebook, excel sheet, or budgeting app. I find the budgeting app to be the most useful and having it on my phone makes it super easy to make sure I’m not overspending.
Here are a few budgeting apps I have used: Fudget, Mint, Clarity, Joy, NerdWallet
If you like this blog, be sure to look for the follow-up on how to cut costs.
Natasha Ramsey, MD is a Pediatrician in training in New York City who is specializing in Adolescent Medicine. She is the founder of Gorjus Doc, an organization meant to inspire women in medicine to find balance and purpose through her writing and mentorship.