While medical doctors have high earning potential, the first few years of a doctor’s career — known as residency — tend to be defined by long hours and relatively low pay. So if you’ve got a medical career ahead of you — and medical school student loans to pay off — what sort of financial life can you expect? In this article we’ll explore the average pay for medical residents, and what they can do to manage their finances during this time.
Key Points
• The average medical resident earns around $60,373 annually, which translates to ~$3,800/month after taxes.
• Residents often work up to 80 hours/week, making their hourly rate roughly $14–$15.
• Budgeting, roommate living, and minimizing fixed costs like transportation and subscriptions can help stretch income.
• Meal prepping and cooking at home can significantly reduce monthly expenses.
• Refinancing student loans during residency may reduce interest accrual and allow for low monthly payments, though federal benefits may be forfeited.
How Much Do Medical Residents Make?
So, how much do doctors make during residency? According to the Association of American Medical Colleges, the average medical resident salary was $60,373 as of July 2022 . After federal and state taxes (assuming an average tax rate of 8.9%), this leaves the average medical school resident with $3,797.73 to spend each month.
Medical residents are known to work very long hours. The Accreditation Council for Graduate Medical Education requires hospitals to ensure that residents work no more than 80 hours a week. If you do the math, an annual salary of $60,000 breaks down to just over $14 an hour if a resident puts in a full 80 hours a week.
Making that money stretch can be a challenge — especially in high cost-of-living areas. To help, here are five tips for getting by (and even thriving) while living on an average resident salary.
💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.
How to Get by on a Medical Resident’s Salary
1. Make a Simple Budget
The average resident has little time to keep track of their expenses, but building a simple budget could be the difference between making it work and ending up short. Your first step should be to make a list of all “necessary” spending, such as rent, utilities, transportation, and food.
Next you’ll want to look how much you bring home each month, including your resident’s salary and any additional income from your partner or family support. Then look at how much money you have left over. That’s how much you have to spend on “extras” each month, like dining out, travel, or clothing. You might decide to set spending limits for each category (for example, $100 for eating out) or monitor your spending as the month progresses. Or, you can do both.
2. Consider Personal Preferences and Trade-Offs
A budget can feel like a hassle, but if you set it up right, it can also be freeing. By knowing exactly how much you can spend, you can then decide what’s important for you to prioritize and what you don’t mind cutting out.
Maybe you’ll decide that you want to cut cable, but you don’t want to stop meeting up with friends at your local wine bar. Or perhaps you’ll give up eating out so you can spend more on rent. Making a budget is just analyzing each trade-off. Ask yourself, “Do I want this, or something else?”
3. Focus on Fixed Costs
One substantial way you can make an impact on your budget is by making “big wins” on fixed costs, such as housing, car payments, or utilities. For example, lowering a bill by $20 each month is going to have a bigger effect than saving a few dollars on small purchases. Looking at your own fixed spending, where could you ask for better rates? Or cut back entirely?
While you’re at it, look at your subscription services and other memberships. Though not often considered a “fixed cost,” they can add up quickly to become a significant expense. When you put them on autopay, it’s easy to forget about them and miss the chance to cancel them each month or year. Take time to go through your credit card statement to make sure you’re not paying for a service that you’re not able to use because you’re so busy. Try to eliminate one or two for automatic monthly savings.
4. Share a Living Space
When you’re trying to save money, there’s usually no financial win that’s bigger than saving on your housing costs. To do this, you can move into a more affordable place, live with roommates, or rent out a room in your place. Not only can a roommate help you save on rent, but on utilities like water, electric, and cable.
Some folks don’t like the idea of having roommates because they lose some privacy. But if you’re a busy resident who’s not home very much and is trying to eke by on a small salary, it can be a great way to save money.
5. Choose Less Expensive Transportation
Transportation may be your second biggest expense after housing, especially if you’ve got car payments. But even if you’ve already paid off the vehicle, you’ll need to cover the cost of car insurance, as well as maintenance and sometimes parking. It can add up.
If you’re living in an area with good public transportation, or you’re able to live within walking distance of the hospital, you might want to get rid of your car to save money. In some areas, Uber or Lyft offer a flat-rate, monthly pass option that can be less expensive than owning and maintaining a car.
If you’re not ready to sell your car quite yet, simply try using it less. Even this small act may save you money each month. For example, if you’re spending $120 per month on gas but could ride public transportation for $30 per month, you may save over $1,000 on transportation in a year.
It might be a difficult transition at first, but you may find that you appreciate the time you aren’t behind the wheel. Another potential way to save money on transportation is by shopping around for car insurance. If you haven’t done so in the last several years, it could be well worth it — especially if you have a good driving record.
6. Cook at Home
You’re likely overworked and want to rest during your off hours, and it’s hard to find the time and energy to cook. But eating out is expensive. While it may be unreasonable to think that a medical resident will cook every meal, it may be worth taking a few hours each week to make a batch of meals that you can eat throughout the week. Preparing meals and eating at home could potentially save residents hundreds of dollars a month.
Another Option: Refinance Medical School Loans
Like most people who attended medical school, there’s a very likely chance you took out student loans. Managing these loans while you’re living on an average resident salary may be important for your financial success. It is important to understand your loan repayment options as a medical resident. One of the first decisions you may want to make is whether you want your loans to go into forbearance or to make payments on your loans during residency.
Student loan forbearance may seem like an ideal option for a person on a medical resident salary, but that might not always be the case: Federal medical school student loans accrue interest during that time, and that interest is added to your balance at the end of your forbearance period. This is called compounding, or capitalization, and means that you’re paying interest on top of interest.
You may want to consider refinancing your medical resident student loans with a company like SoFi that offers programs designed for medical school residents. Refinancing is the process of paying off one loan (or many loans) with another, generally to lower your overall interest rate or to change the terms of your loan.
Refinancing student loans won’t be for everyone, as you will lose access to federal loan programs such as Public Service Loan Forgiveness (PSLF). SoFi’s medical school loan refinancing offers monthly payments as low as $100 per month during residency, while no interest capitalizes during that period.
Additionally, with SoFi, you might be able to lower your overall interest rate as well, which could potentially save you thousands of dollars over the life of your loan. Learn more about SoFi’s medical resident loan refinancing rates and terms.
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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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