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When it comes to maintaining a strong financial plan and healthy financial behaviors, people’s brains can sometimes work against them. Unconscious habits, mental shortcuts, and emotional drivers can all get in the way of setting and meeting financial goals.

Consider recency bias, which is the tendency for people to look to recent events to make decisions about the future. Just because a stock has skyrocketed recently, that doesn’t mean its upward trajectory will last forever. In fact, jumping into the market during a rally could mean you end up buying when prices are high, right before investors bail and prices fall.

Another mental tendency to consider is ego depletion. It’s the idea that people can only exert their willpower for a limited time, and after that, it’s harder to practice self-control. If you have an important financial decision to make, it may make sense to wait until you are no longer feeling depleted.

Here’s a closer look at the ego depletion theory, what it could mean for your finances, and how to overcome it.

What Is Ego Depletion?

The concept of ego depletion hinges on the idea that a person’s willpower reserves are finite, and when people exert self-control for too long, they use up those reserves. Once those are depleted, it is harder to exert self-control, and we’re more likely to make poor decisions.

The term was coined by American social psychologist Roy Baumeister in the late 1990s, though the idea of ego depletion has become popular in recent years. This may be in part because it makes sense intuitively. For example, the experience of eating a healthy breakfast and lunch only to get home from work and eat a bag of chips for dinner is pretty easy to relate to.

However, not everyone agrees with the concept of ego depletion. Some scientists report a lack of consistent data to support the idea. Instead, they have found that motivation is not finite. Rather, it can be subjective, and there are ways to increase it. That can be a good thing as you begin to set long-term financial goals.

If you’re looking to build your long-term financial plan, a money tracker app can help. The SoFi app connects all of your accounts in one convenient dashboard. From there, you can see all of your balances, spending breakdowns, and credit score monitoring. Plus, you can get other valuable financial insights.

Causes of Ego Depletion

There are a variety of factors that may play a role in ego depletion, including:

•   Low blood sugar: If you haven’t eaten and your blood sugar has dropped, it may be more difficult to exert willpower.

•   Emotional distress: Temptations may be harder to resist if you’re experiencing a state of mental anguish.

•   Unfamiliar tasks: If you are doing something for the first time, you may need to exert more mental energy, which can lead to ego depletion.

•   Lack of choice: If you are forced to do a task not of your choosing, you may be more likely to become depleted.

•   Illusory fatigue: If you think that a task will be mentally tiring, you may experience ego depletion faster. In other words, ego depletion happens more often when you expect it to. If you think a task won’t tax you too much, you may be able to exert more self-control.

•   Cognitive dissonance: If you’re in a situation in which you do or say something that contradicts your beliefs, it can tire you out and diminish your self-control.

•   Variable heart rate: Those who experience a variable heart rate have been found to have less self-control.

The Effect of Ego Depletion on Your Finances

If tasks that require self-control weaken your willpower, you may be less likely to make good decisions when you experience ego fatigue. When it comes to your finances, for instance, you may be more likely to spend money on things that you can’t afford.

Ego depletion could also mean you’re less equipped to make important decisions, such as how to invest your money. For example, if the market is experiencing a downturn, you may find yourself more prone to panicking and potentially pulling out your money. But in doing so, you’ll lock in losses and potentially miss out on a subsequent upswing.

Ego depletion could also mean you miss important deadlines, such as deadlines for funding your 401(k) or IRAs or tax deadlines.

Recommended: Personal Finance Basics for Beginners

How to Overcome Ego Depletion

Luckily, there are ways to overcome ego depletion and improve your money mindset.

Get Enough Sleep

Lack of sleep makes self-control difficult. Sleep counteracts fatigue and helps reset your willpower reserves, so practice good sleep hygiene. Go to bed at a consistent time. Make sure your bedroom is quiet, relaxing, and dark. Avoid large meals, caffeine, and alcohol before bed.

Manage Stress

Managing stress can help you address the causes of ego depletion as well as its effects. Consider strategies such as deep breathing, mindfulness exercises, healthy eating, and regular exercise.

Set Goals

Clear financial objectives and the steps you need to reach them can help overcome ego depletion. Consider using SMART goals, or goals that are specific, measurable, achievable, relevant, and time-bound. With these in place, you’ll know what you need to do to accomplish your objectives, and you’ll also be less likely to make moves that stray from your plan.

Plan for the Long Term

Long-term financial plans take your goals, risk tolerance, and time horizon into consideration. They are built to account for the natural cycles of volatility. With a long-term plan to refer to, you may be less likely to make rash decisions in the short term, such as panic selling when markets are down or buying when market prices are peaking and may be nearing a fall.

Recommended: Guide to Money Affirmations

Tools to Help You Reach Your Goals

There are a variety of tools out there that can help you set and meet your goals and make financial freedom a reality. It’s worth shopping around to find the ones that work best for you and that you’re more likely to stick with.

One to consider is a spending app, which can help you set up a budget, categorize and track spending, make bill payments on time, and track your credit score.

The Takeaway

The idea of ego depletion centers around the idea that when people exert self-control for too long, they use up their willpower reserves and are more likely to make poor decisions. Learning the causes of ego depletion is a first step in helping you head off rash financial decisions that may work against you. If you recognize that your willpower is fading, take a breather. And when in doubt, refer back to your long-term financial goals and plans.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

What is the cause of ego depletion?

Ego depletion can be caused by a number of factors, such as emotional distress, fatigue, low blood sugar, or unfamiliar tasks. Anticipating that a task will be difficult can also contribute to ego depletion.

What are the symptoms of ego depletion?

Symptoms include a lack of mental energy, less ability to focus, and lower self-control.

Some people may also lose their temper more easily.

What is an example of ego depletion?

An example of ego depletion might be spending the day hard at work and then coming home, sitting on the couch, and turning on the television instead of pursuing other healthier activities, such as going to the gym. Giving up on a diet or exercise routine is another example of ego depletion.

How do you deal with ego depletion?

There are a number of strategies to combat ego depletion, such as getting enough rest, managing stress, and eating healthy foods. It’s also important to set and stick to long-term goals.

How does ego depletion affect financial decisions?

Managing your finances takes some self-discipline, so if you’re feeling worn out mentally, you may make poor financial decisions. This can include overspending, panicking over market changes, and missing deadlines.

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Photo credit: iStock/Delmaine Donson

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Salary will always be an important factor in any career decision, whether you’re looking for a new job or choosing which offer to accept. And yet, few questions in the job application process are more uncomfortable than the basic “What is your desired salary?”

Not sure what to put for a desired salary on a job application? Keep reading for some helpful insights and templated responses.

How to Answer Desired Salary on an Online Application

If you’re not sure what to put for your desired salary on an application, you likely need to do some research and then think carefully about your answer. It’s true that listing too high a salary can immediately eliminate a candidate if the company can’t afford to pay that much. But it’s equally true that lowballing can impact a candidate financially for years.

When deciding what to put for your desired salary on a job application, it’s important that candidates don’t simply list the number they want to earn. A salary number should be based heavily on research. Spend time looking into the cost of living in the area, as well as what typical salaries look like for the role, seniority level, and industry you’re applying for. Education level, years of work experience, and special skills should also be taken into account.

When completing an online job application, it’s common for the candidate to be asked whether the salary listed is negotiable. This is usually done in a checkbox format, but if you are open to negotiation and don’t see an option to highlight that fact, there is usually a notes section where you can mention your flexibility.

Recommended: What Are the Average Monthly Expenses for One Person?

How to Answer the Desired Salary Question in Interviews

Salary requirements can come up at any stage of the application process, including during the interview. To avoid feeling put on the spot, it’s smart to have an answer ready to go beforehand. As nerve-racking as interviews can be, they’re a great time to discuss salary with a potential employer to make sure both parties are on the same page.

Again, a salary number should be backed by careful consideration and research. Be ready to share the basis for the number you choose. If you’re flexible on salary, that can also be expressed here. Many candidates factor the benefits, title, signing bonus, growth potential, and other elements into their decision to accept a job.

If a candidate is pitching a number higher than the employer’s budget but they’re willing to accept a lower salary if they can work from home three days a week, then they should share that during the job interview.

How to Answer the Desired Salary Question in Emails

Some employers may not ask about a candidate’s salary requirements until after an interview or two, and they may then do so over email. When it comes to figuring out what to put for the minimum salary desired, many candidates list their current salary or a number slightly higher than that to increase their disposable income.

Some employers may ask for a range. Here, it’s important for candidates to choose a minimum salary they feel is worthwhile enough for them to continue the application process.

Candidates may include a note in the email about salary being negotiable if that is true. But if the candidate really does have a minimum figure they need to consider the job offer, they should make that clear in writing. We all have different expenses and budgets that impact how much we need to make. A spending app can help candidates determine what salary they need in order to pay all their bills.

Recommended: The Most Rewarding Jobs in America

Declaring a Salary by Email: Templates

If you’re feeling uncomfortable about salary negotiations and you’re not sure what to put for the minimum salary desired, it can help to practice writing it out. You can use these email templates as a script for in-person or phone conversations, depending on how either party brings up salary:

•   Template 1: Salary Range: “Based on market research and cost of living in our area, I’m looking for a new role that will pay in the $80,000-90,000 range. I am flexible and open to negotiation, but I can only make a move for a salary in that range.”

•   Template 2: Minimum Salary: “The average salary for my role in the greater Los Angeles area is $65,000. I am currently looking for roles that can accommodate a salary of $65,000 or more.”

•   Template 3: Flexibility: “With ten years of industry experience and a recently earned MBA, I am looking to make a move to a more senior position. Compensation is important to me, and I would like to make between $100,000 and $135,000. However, I am also looking for a role that provides schedule flexibility and would be willing to discuss a lower salary in exchange for a minimum of three remote work days a week.”

These templates give candidates an idea of how to get started. But it’s important to customize and flesh them out based on your own research.

When to Discuss Salary

Once you decide how much to quote for your minimum desired salary, you also need to be prepared to discuss it. There is really no wrong time to discuss salary during the job application process. While many candidates wait for the employer to bring it up, it is possible for the candidate to jumpstart the conversation. Some employers will wait until they make an offer to even mention salary.

While it’s generally not advisable to try to negotiate a salary before receiving a job offer, it is perfectly acceptable to ask what salary range they have in mind for the role.

If a candidate has concerns that the company’s budget is not in line with the salary the candidate is aiming for, inquiring early on about the salary range can help them avoid committing to multiple rounds of interviews for a role that isn’t the right fit.

What to Put for Desired Salary: Examples

At some point during a job search, you might encounter a request to share your salary requirements. Once you feel confident about what to put for a desired salary, you can turn to one of these examples to help format your request:

•   “I need to make a minimum of $XX in order to consider making a move from my current role/company.”

•   “I am looking for a new role that pays in the $XX-XX range.”

•   “I am hoping to make $XX in my next role, but am open to negotiation for the right role.”

It’s totally fine to keep salary requirements simple and straightforward to help eliminate any miscommunication.

SoFi Coach℠ Chat is a tool designed to help you view and analyze your financial data, get personalized insights, learn about SoFi products, troubleshoot issues, and take certain actions in chat. Coach responses are information for you to consider and not financial advice. Coach responses are based on limited information from your connected accounts and may have inaccuracies. The insights are meant to help you think about your finances and options —they are not advice or recommendations, and they do not guarantee results. Coach may offer you options to explore SoFi products on which SoFi would earn revenue. You are solely responsible for any financial decisions you make. Coach is offered by Social Finance, LLC.

The Takeaway

When you’re not sure what to put down for a desired salary, you’ll need to conduct market research into standard ranges for that role, industry, and experience level. You may also want to take your local cost of living into account. Once you feel confident with what to put for your desired salary on a job application, communicate that amount clearly and concisely.

Take control of your finances with SoFi Coach. You can easily view all of your accounts in one convenient dashboard: bank and investment balances, current debts, spending breakdowns, and credit score. Easily set up budgets and spot upcoming bills. And get personalized insights on everyday money questions and take action with Coach chat, the AI guide that’s powered by the playbooks of SoFi Financial Planners, so its guidance comes from expert knowledge.

Meet SoFi Coach, your smart personal guide to getting your money right.

FAQ

What should I put for desired salary per hour?

When deciding what to put for your desired salary for an internship, part-time job, or other hourly role, you’ll need to research what the going rate is in your area. You also need to know what number works for your budget.

What should I put for desired salary for a part-time job?

Not sure what to put for a desired salary for a part-time job? Do some digging online to see the pay for other roles in the same industry and locality to get an idea of a fair number to ask for.

Is desired salary hourly or yearly?

Whether or not someone’s desired salary is hourly or annual typically depends on the type of role they’re applying for or the company’s preference. It can be helpful to have a number in mind for both.

How can I determine my desired salary?

When choosing your desired salary, consider factors such as the typical pay for the role, your location, industry, level of experience, education, and relevant skills. You may also want to consider the cost of living in your area and whether the position includes benefits or flexible work arrangements.

Should I consider benefits when deciding my desired salary?

Benefits and other forms of compensation can be important when deciding what salary you would be willing to accept. Benefits such as a signing bonus and flexible work options can add significant value to a job offer.

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About the author

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Photo credit: iStock/Prostock-Studio

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

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Financial health and mental health are closely connected. Financial strain can contribute to stress and affect areas such as sleep, emotional well-being, and productivity. At the same time, mental health challenges can make it harder for people to manage finances and stay focused at work.

Recent research indicates that these pressures continue to affect today’s workforce. PwC’s 2026 Employee Financial Wellness Survey found that 59% of employees are stressed about their finances, while 49% say their compensation isn’t keeping up with costs. Among Gen Z respondents, 85% said financial stress affects their mental health, and 71% reported reduced productivity.

Financial pressures are not the only source of stress at work. The American Psychological Association’s 2025 Work in America survey found that 54% of U.S. workers said job insecurity has a significant impact on their stress levels. The survey also found that concerns about job security can affect workers’ sleep and relationships, while 46% said their work environment has a negative impact on their mental health.

These overlapping pressures can create challenges for both employees and employers. Financial stress and mental health concerns may affect concentration, motivation, productivity, and engagement. That has led many employers to look at financial well-being and mental health benefits as complementary parts of a broader employee support strategy. Here are some ways organizations can address the connection between financial and mental health and help employees navigate both.

Recognize How Financial Well-Being Programs Can Support Mental Health in the Workplace

Financial planning, budgeting tools, debt-management resources, financial coaching, and financial education have become increasingly common workplace benefits. These resources can help employees develop financial skills, manage day-to-day challenges, and work toward longer-term financial goals. Having access to practical financial support may also help employees feel more prepared to handle financial pressures, which can be an important part of overall well-being.

Financial well-being programs can complement, rather than replace, mental health benefits. Employees dealing with financial stress may benefit from resources that address the underlying financial concerns while also having access to mental health support when needed. Employers can consider how these programs work together as part of a broader approach to employee well-being.

Offer a Choice of Flexible Financial-Contribution Programs

Personalized benefits that are relevant to individuals’ situations can be especially helpful in reducing the financial stress employees are feeling right now. Depending on an employee’s personal situation, payroll deduction emergency savings accounts, student loan repayment programs, and/or debt management tools may be effective ways to help workers handle the financial stressors that may be contributing to depression, anxiety, and other mental illness.

This may be a good time to take inventory and see what solutions might be missing from your financial well-being benefits. Questions to consider include:

•   Have you set up an automated emergency savings program for employees?

•   And if you have, are you sure your employees know it exists and how to participate?

•   Do you have a 401(k) matching program for employees paying off student loans?

•   Are your education and financial planning efforts aimed at all employees, not just those focused on long-term savings?

Help Employees Keep an Eye on Long-Range Goals, Too

Today’s high cost of living combined with immediate financial concerns like repaying student loans and credit card debt means that many employees are simply not saving enough for the future.

Despite the demand for short-term saving solutions, you may also want to help employees balance short- and long-term goals. Even for younger employees, you don’t want to take the focus completely off retirement and college savings benefits. And for employees who are closer to retirement, building savings is important, too. Helping everyone in your workforce, regardless of where they are, maintain a balance between short-term and long-range goals can be an important step to developing their overall financial well-being and lowering their stress.

The Takeaway

Research shows that financial stress can significantly impact your workforce, leading to mental and physical health issues as well as decreased engagement and productivity. By connecting mental health and financial wellness benefits into customized, accessible packages, you can better support your employees and prepare them for future challenges.

SoFi at Work can help. We provide the benefits platforms and education resources that can enhance financial wellness throughout your workforce.

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This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

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When setting income goals, some people use a six-figure salary, which runs from $100,000 to $999,999 per year, as a benchmark. Here, learn more about what this salary means, how to earn that level of income, and more important intel.

How Much Is a Six-Figure Salary?

“Six figures” simply refers to a number with six digits. Typically used with money, the term covers amounts from $100,000 to $999,999. Once you hit a million, you’re in seven-figure territory. Someone with a six-figure salary makes at least $100K.

SoFi Coach℠ Chat is a tool designed to help you view and analyze your financial data, get personalized insights, learn about SoFi products, troubleshoot issues, and take certain actions in chat. Coach responses are information for you to consider and not financial advice. Coach responses are based on limited information from your connected accounts and may have inaccuracies. The insights are meant to help you think about your finances and options —they are not advice or recommendations, and they do not guarantee results. Coach may offer you options to explore SoFi products on which SoFi would earn revenue. You are solely responsible for any financial decisions you make. Coach is offered by Social Finance, LLC.

How to Make Six Figures

There’s no one right way to earn six figures. That said, there are strategies that can better position you for this level of income. Getting a good education, while not absolutely necessary, is a solid foundation for the kinds of jobs that pay in the six-figure range. Another path is to start your own business.

The Bureau of Labor Statistics (BLS) lists 127 occupations with median annual salaries of at least $100,000. The degrees required for these jobs range from a high school diploma to a doctoral degree.

It’s important to recognize that certain careers just pay more than others. Once you’ve chosen a high-paying field, you can determine the type of education and training you’ll need to pursue.

You’ll also want to learn how to manage and grow your money. A good place to start is by tracking your expenses and savings with a free spending app.

Average Age to Make Six Figures in the US

According to the U.S Census Bureau’s most recent data, about 16.7% of households earn between $100,000 and $149,999. Another 10.1% earn between $150,000 and $199,999. And 16% earn $200,000 or more. Note that this is household income, not individual. Compare those figures to the national average salary of $64,505.

Some workers begin earning six figures in their twenties and thirties. Economists nickname them HENRYs, for “high earners, not rich yet.” But for most people, their “peak earning years” are from age 35 to 44.

Keep in mind that annual income says nothing about someone’s financial health. An individual making $50K who manages their money well can be in a better place financially than someone making six figures.

Recommended: What Is a Good Entry-Level Salary?

Examples of Jobs That Pay Six Figures

A look at the highest-paying jobs by state offers insight into these types of careers. All these jobs make at least $200,000, and many of them are in the medical field.

Some jobs that pay a six-figure median salary include airline pilots ($226,600), IT managers ($171,200), and lawyers ($151,160). It’s probably fair to say that, in any industry, there are successful bosses who make six figures.

What Does a Six-Figure Salary Get You?

What a six-figure salary will get you depends on several other factors. A big one is the cost of living in your area. This is how much you spend on housing, transportation, food, and other necessities. When someone lives in a place with a high cost of living, they will typically have less disposable income and less to put into savings than someone who lives in a location with a low cost of living. This can be true even if both are making competitive salaries.

Another factor is household size. For a single person living in California, a six-figure salary might be more than enough. However, a family of four living in the same area could be just scraping by.

Recommended: How to Counter a Salary Offer

Do You Need a Six-Figure Salary to Build Wealth?

While a six-figure salary may be considered good, you don’t necessarily need to earn that much to build wealth.

That said, you need to have a reasonable income to live on. For example, a $20,000 salary typically isn’t enough for a household to meet basic expenses. Consider rent: With this salary, the 30% rule recommends spending no more than $6,000 on rent per year (that’s 30% of $20K), which works out to $500 a month. The average rent nationwide is now $1,763, more than three times what you could afford on a $20,000 salary.

What about a $40,000 salary? This may be enough for a single person in some areas, but probably not for a family. And while an individual could afford basic necessities, they may not have much left for building wealth — that is, saving and investing.

Another factor is existing debt. If you’re paying down high-interest credit card balances, it can be hard to also put money toward savings.

The income needed to build wealth, then, is an amount that covers the cost of living in your location, allows you to pay off any debt, and provides you with enough extra money to set aside for an emergency fund, retirement, and investing.

How to Build Wealth Without Earning a Six-Figure Salary

As mentioned above, the steps to building wealth are the same for any salary. First, pay off your debt, especially high-interest credit cards and loans. Money going toward paying interest is money that could be going into your savings or investments.

Second, look for ways to cut back on spending: cooking at home instead of going to costly restaurants, closing fee-based apps that you don’t really need, and so on.

Finally, save and invest the money that isn’t going to credit card debt or other nice-to-have but not necessary expenses.

Recommended: The 52 Week Savings Challenge

The Takeaway

A six-figure salary, meaning one between $100,000 and $999,999, is a benchmark for many people who want to meet financial goals. Having a good education is usually helpful, but it’s not always necessary, and certain jobs are more likely to come with six-figure salaries. Having a good salary is helpful when building wealth, but the same strategies can be utilized on a five-figure salary. Tracking your spending and automating your savings are two good first steps.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

Is a six-figure salary good?

In most places in the United States, $100,000 is a good salary, covering the needs of an individual or small family while allowing them to build savings. However, having a six-figure salary doesn’t always indicate financial health, as this depends on how well you manage your money.

What does a six-figure salary mean?

This is a salary that contains six digits. It ranges from $100,000 to $999,999.

What is an eight-figure salary?

This is a salary amount consisting of eight digits. It goes from $10 million annually to $99 million.

What jobs typically pay six figures?

Six-figure salaries are common for certain professions, including lawyer, pilot, and chief executive jobs. However, note that the salary for a particular role may differ significantly depending on your location and job demand.

Can you make six figures without a college degree?

Yes, it’s possible to make six figures without a college degree. While some high-earning roles require advanced education, others may require work experience and specialized training that can be obtained with a high school diploma.

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Photo credit: iStock/Renata Angerami

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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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 $70,000-$85,000 per year. While that’s above the national annual average salary of $69,770, it doesn’t compare to the salary of a full-time family medicine physician of $255,820.

You may need to set and stick to a budget during your fellowship training period. Read on for some strategies that can help.

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 (first-year residents earn an average of $60,000-$65,000 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, with 70% of medical school graduates having some form of education debt. The average student loan debt of medical school graduates, including undergraduate loans, is $223,130.

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 your 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 complimentary 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 such as 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 20-30 years. After that, the balance is forgiven for the Income-Based Repayment (IBR) Plan or the Repayment Assistance Program. 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 federal 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 nonprofit organization may be able to get their federal 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 upfront, 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

A fellowship 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.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

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 and can be a solid foundation for a successful career. However, they are extremely competitive to get into, require a significant time commitment, and have a substantially lower salary than 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 $70,000-$85,000 per year, while the average salary for a first-year medical resident is $60,000-$65,000 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, a standard cardiology fellowship lasts three years, while most family medicine fellowships last one to two years.

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