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Budgeting on a Fellowship Doctor Salary

November 05, 2018 · 6 minute read

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Budgeting on a Fellowship Doctor Salary

If you’re preparing to become a physician, you’re on track to eventually make an average of $299,000 a year . 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 make an average of between $54,107 and $71,167 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 you the experience needed to serve patients. A fellowship usually follows residency and is designed to train you in a narrower specialty.

While some fellows may earn more than residents, the salary is still far lower than for most working physicians. You usually have to pay for the majority of your living costs, including housing and at least some meals . Additionally, most fellows face a high student loan burden as well. Three-quarters of medical students graduated with debt in 2017, and nearly half had a student loan balance of $200,000 or more.

With a relatively low salary and a high debt burden, being smart with your money during your fellowship is key to setting yourself up for a successful future. You might feel like you have too much on your plate to devote time to thinking about personal finance. But just a few savvy budgeting strategies can help you live within your 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—you guessed it—actually making a budget. This isn’t as hard as it sounds. Start by making a list of your 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 you make each month from your fellowship and any other income sources. Be sure to use your take-home pay after taxes and deductions. As you suspect, your expenses ideally should be less than your income. If they’re not, work out where you can trim costs. Once you come up with a reasonable budget that works for you, you can start tracking your spending every month.

2. Not Living Beyond Your Means

It bears repeating: your 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 17% on average), so even a small balance can balloon into substantial debt down the line. Failing to make payments, or using too much of your credit, can impact your credit score, which can make a difference when, for example, you’re 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 the most affordable option you can. If you’re in a particularly expensive market, consider getting roommates. And remember that the closer you are to your workplace, the more you can save on commuting costs.

4. Delaying the Purchase of a New Car

If you live in an urban area, think about whether you can use public transit or carpool to get 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 might want to seek out used cars that are in great shape at a great price. And if you get a car, consider carpooling which can help you save on gas, tolls, and parking.

5. Saving on Food

As a variable expense, food is an area with lots 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 your 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 can 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

You’ll probably want to go on vacation and take a break from all your hard work. But your well-deserved trip doesn’t have to break the bank. If you have a decent enough credit score, you may qualify for credit cards that offer significant point bonuses, which can be redeemed for travel costs like flights, hotels, or rental cars. Most cards require you to spend a certain amount up front 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

If you have eligible federal loans on which you can’t afford to make payments, the government offers options for delaying or reducing your monthly payment if you meet certain qualifications. Income-based repayment plans allow you to tie your monthly payment to what you make, and the balance is generally forgiven after a certain number of years (currently anywhere between 20 to 25 years).

Your eligibility for these programs mostly depends on the types of student loans you currently have, and when you took them out. If you are in a qualified graduate fellowship, you can request to defer your loans. If you’re successful, you likely won’t have to make payments during the fellowship, and, depending on the loans you have, you may not have to pay interest that accrues. If you don’t qualify for deferment, but are still struggling financially, you can apply for forbearance, but you are still responsible for paying the interest that accrues.

If you’re looking to go into public health, you can also consider the Public Service Loan Forgiveness program . If you work for a qualifying non-profit establishment, you may be able to get your loans forgiven after 10 years of income-based payments.

8. Trying to Save

Given your salary, you may not have a ton of extra room in your budget. But if you can manage to cut costs enough, you would be smart to start saving as soon as you can. If you don’t already have an emergency fund, you can try to put away some money every month until you have 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 your money is invested, the more time it potentially has to grow and withstand any volatility.

9. Considering Passive Income

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. You may have to put in 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, 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, 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. If refinancing lowers your monthly payments, however, it could help you start making a dent on your loans instead of deferring them.

Struggling to get by on a medical fellowship salary? Look into refinancing your student loans with SoFi. Refinancing could lower your interest rate or monthly payment.


SoFi can’t guarantee future financial performance.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.
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