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. Medical fellows and residents earn a median salary of $58,305 a year, depending on how many years it has been since they earned a medical degree.
The Difference between Residency and Fellowship
Residency usually happens right after medical school and is designed to give residents the experience needed to serve patients. A fellowship usually follows residency and is designed to train fellows in a narrower specialty.
While some fellows may earn more than residents, the salary is still lower than for most working physicians. Usually fellows have to pay for the majority of their living costs, including housing and at least some meals.
Additionally, most fellows face a high student loan burden as well. Nearly three-quarters of medical students graduated with debt in 2020, and the median debt amount in 2019 was $200,000.
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 live within their means 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. This isn’t as hard as it sounds. Start by making 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 could be trimmed. With a reasonable budget in place, the next step can be to track spending each month.
2. Living Within Your Means
It bears repeating: generally, expenses should not exceed the money you bring in. On a medical fellowship, you might be tempted to bite off more than you can chew 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 (currently more than 16% on average), 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, for example, when looking for a mortgage or car loan.
3. Choosing Housing Carefully
For most people, housing is their 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 non-negotiable, 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.
Grocery shop knowing what’s on sale, what produce is in season, and even take a chance on generic versions of brand-name foods. Look for nonperishable items in bulk at discount stores. If you’re feeling extra thrifty, clipping coupons could save you some change, too. Some stores even offer coupons through their app—no clipping required.
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.
Related: Top Travel Hacks
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-based repayment plans allow borrowers to tie their monthly payment to what they make, and the balance is generally forgiven after a certain number of years (currently anywhere between 20 to 25 years).
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 to defer your loans.
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 non-profit establishment, may be able to get their loans forgiven after 10 years of income-based payments.
8. Trying to Save
Living on a fellows 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 interest 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 much extra time to take on a side hustle. If you’re looking for ways to potentially boost your pay, consider looking into low-effort side hustles as sources of passive income, which can allow you to earn money without investing much time or energy.
Examples include renting out your room or car, wrapping your car in ads, or creating an online course. It may require some up front effort, 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, potentially from both undergraduate and medical school, 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—both federal and private—with a private lender, you typically get a new loan at a new interest rate and/or a new term.
Depending on your situation, student loan refinancing can lower your monthly payment. Many online lenders consider a variety of factors when determining your eligibility and loan terms, however, including your educational background, earning potential, credit score, and other factors.
Keep in mind that when refinancing with a private lender, you do give up the benefits that come with most federal student loans, like deferment, forbearance, or income-based repayment programs, so it won’t make sense for all borrowers.
Fellowships can be an excellent opportunity to learn about a specific medical field, 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.
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