A medical fellowship after residency can provide the training you need for a successful career in your preferred specialty. But it also probably means you’ll make far less for a period of one to three years.
Do you get paid during a fellowship? Yes, you do. Primary care medical fellows earn an average salary of $75,943 per year. While that’s above the national annual median salary of $59,228, it doesn’t compare to the salary of a full-time family medicine physician of $273,000.
You may need to set and stick to a budget during your fellowship training period. Read on for some strategies that can help.
Key Points
• A medical fellowship typically offers a salary of around $75,943, which is lower than that of fully licensed physicians, necessitating careful budgeting.
• Budgeting effectively involves categorizing expenses into fixed and variable types, ensuring that monthly expenses do not exceed income.
• Housing is often the largest monthly expense; finding affordable housing or considering shared living arrangements can significantly reduce costs.
• Utilizing income-based repayment plans, deferment, or forbearance options can help manage student loan payments while in a medical fellowship.
• Seeking passive income opportunities, using credit card points, and practicing smart grocery shopping can further alleviate financial pressures during fellowship years.
The Difference Between Residency and Fellowship
Residency usually takes place right after medical school and is designed to give doctors the experience needed to serve patients. A fellowship follows residency and is designed to train fellows in a narrower specialty.
While some fellows may earn more than residents (residents earn an average of $67,400 per year), their salary is still significantly lower than that for most working physicians. Usually, medical fellows have to pay for the majority of their living expenses, including housing and at least some meals.
Additionally, most fellows face a high student loan burden as well, with 73% of medical school graduates having some form of education debt. The average student loan debt of medical school graduates, including undergraduate loans, is $264,519.
With a relatively low salary and a high debt burden, being smart with money during fellowship years can be a big part of creating a strong financial foundation.
Fellows may feel like they have too much on their plate to devote time to thinking about personal finance. But just a few savvy budgeting strategies can help fellows spend wisely and potentially avoid getting deeper into debt.
10 Budgeting Tips for Living on Your Fellowship Doctor Salary
1. Finding a Budget that Works for You
The first step to smart budgeting is actually making a budget. Start by creating a list of monthly expenses in two categories: fixed expenses (those that stay roughly the same every month, such as rent, utilities, and insurance) and variable expenses (those that fluctuate, such as eating out and entertainment).
Next, note how much money is earned each month from fellowship or any other income sources. Use take-home pay after taxes and deductions.
Ideally, expenses should be less than income. If they’re not, work out where costs can be trimmed. With a reasonable budget in place, the next step can be to track spending each month.
2. Living Within Your Means
Expenses should not exceed the money you bring in. During a medical fellowship, you might be tempted to extend yourself financially with the expectation that your salary will soon increase dramatically. But going into debt isn’t a savvy way to start off your career.
Credit cards generally have the highest interest rates, so even a small balance can balloon into substantial debt down the line. Failing to make payments or using too much available credit could impact an individual’s credit score, which could make a difference when looking for a mortgage or car loan.
3. Choosing Housing Carefully
For most people, housing is the single largest monthly expense. That’s why it’s worth putting in the effort to find an affordable option that meets your needs. In a particularly expensive market, it may be worth getting roommates. Another factor to consider — the closer you are to your workplace, the more that can potentially be saved in commuting costs.
4. Delaying the Purchase of a New Car
For those living in an urban area, think about whether public transit or carpooling may be options for getting to work. If a vehicle is nonnegotiable, consider a used car rather than a new one. Cars lose much of their value when they’re driven off the lot for the first time, so it may be worth seeking out used cars that are in great shape at a great price.
5. Saving on Food
As a variable expense, food is an area with plenty of opportunities to save. If you have any meals provided for you as part of your fellowship, take advantage of the free food. Eating out can be tempting with a busy schedule, but it may be wiser to limit how often you go to restaurants and how much you spend there.
Since you won’t always have time to cook, preparing meals in batches to eat throughout the week could help you resist the temptation of going out.
To save money on food when you grocery shop, purchase what’s on sale, learn what produce is in season, and consider purchasing generic brands. Look for nonperishable items in bulk at discount stores. If you’re feeling extra thrifty, using coupons could save you some change, too.
6. Traveling with Rewards Points
During your fellowship, you’ll probably want to go on vacation and take a well-deserved break. But your trip doesn’t have to break the bank. Fellows with a decent enough credit score may qualify for credit cards that offer significant point bonuses, which can be redeemed for travel costs like flights, hotels, or rental cars. Some cards may require cardholders to spend a certain amount upfront to qualify for a bonus, so double check you’re not taking on unnecessary expenses or carrying a balance if you don’t need to.
7. Taking Advantage of Income-Based Repayment Plans, Deferment, or Forbearance
Those with eligible federal loans who cannot afford to make payments may be able to pause their payments through deferment or forbearance options if they meet certain qualifications.
Income-driven repayment (IDR) plans allow borrowers to tie their monthly payment to what they make over 20 to 25 years. After that, the balance is forgiven on one of the IDR plans, the Income-Based Repayment (IBR) Plan. Eligibility for these programs largely depends on the types of student loans that the borrower holds and when they were borrowed.
Those who are in a qualified graduate fellowship may be able to request a student loan deferment while in a medical fellowship. If successful, they likely won’t have to make payments during the fellowship. In some cases, borrowers may not be required to pay accrued interest, for example, if they hold subsidized federal student loans.
Borrowers who don’t qualify for deferment but are still struggling financially may be able to apply for forbearance, but would likely be responsible for paying the interest that accrues.
Fellows who are interested in pursuing a career in public health may also consider the Public Service Loan Forgiveness program. In that program, borrowers who work for a qualifying government or non-profit organization may be able to get their loans forgiven after 10 years of qualifying payments.
8. Trying to Save
Living on a fellow’s salary may not leave much room for saving, but if at all possible, setting small savings goals could be helpful.
For example, if you don’t already have an emergency fund, you could try to put away some money every month until you have about three to six months of living expenses saved.
Once you have a cushion for emergencies, consider contributing to a retirement account, such as a traditional or Roth IRA. The power of compound returns means investing early can translate into gains over time. The longer money is invested, the more time it potentially has to grow and withstand any volatility.
9. Considering Passive Income
As a fellow, you probably don’t have extra time to take on a side hustle. If you’re looking for ways to potentially boost your pay, consider looking into low-effort sources of passive income, which can allow you to earn money without investing much time or energy.
Examples include renting out a room or your car. It may require some effort up front, but if you can increase your cash flow without working too much, it could be worth it.
10. Refinancing Your Student Loans
Dealing with student loans can be challenging when you’re living on a medical fellowship salary.
Refinancing your medical student loans is one way to help make your debt more manageable and potentially free up some extra cash.
When you refinance your loans with a private lender, you get a new loan, ideally with a lower interest rate and/or more favorable term.
Depending on your situation, student loan refinancing can lower your monthly payment. Note: You may pay more interest over the life of the loan if you refinance with an extended term.
Keep in mind that when refinancing with a private lender, you do give up the federal benefits that come with most federal student loans, such as deferment, forbearance, income-based repayment programs, and student loan forgiveness. If you plan on using those programs at any point in time, it is not recommended to refinance your federal student loans.
The Takeaway
Fellowships can be an excellent opportunity to hone in on your medical specialty of choice, but the relatively low salary may require some creative budgeting in order to keep expenses in line with income.
Some ideas to consider include creating a passive income stream, shopping smarter at the grocery store, establishing a realistic budget, and finding an affordable living situation.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
Is a medical fellowship worth it?
Whether a medical fellowship is worth it depends on an individual’s situation and goals. Medical fellowships provide advanced learning and training as well as practical work experience in very specific specialties. Medical fellows tend to be highly respected, and a fellowship can be a solid foundation for a successful career.
However, medical fellowship programs are extremely competitive to get into, fellowships require a significant time commitment, and the salary is substantially lower than the salary of a full-time physician.
Does a medical fellowship pay more than a residency?
A medical fellowship generally does pay more than a medical residency. The average salary for a primary care medical fellow is $75,943 per year, while the average salary for a medical resident is $67,400 per year.
How long is a medical fellowship?
A medical fellowship is typically one to three years, but the exact length of time depends on the area of specialization. For example, family practice physicians generally have a three-year fellowship, while general surgeons have a five-year fellowship.
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