Money Magazine - Young Doctors in Debt

Pre-Med & Medical School Pre-Med Topics
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<p>I'll post this before somebody else does:</p>

<p>Young</a> doctors in debt - Nov. 16, 2007</p>

<p>Here are some points that I find interesting:</p>

<p>This couple has a *massive negative net worth, but evidently were still able to get a condo mortgage anyway. I know people who make more money all by themselves than that couple combined, and don't have any negative net worth, and yet still can't afford to buy property. </p>

<p>{Yes, yes, I know, from the bank's standpoint, it's not the negative net worth that really matters, rather, it's the future ability to pay back what you owe. In other words, from the bank's perspective, this couple's credit worthiness is still better than a lot of other people's, despite the massive negative net worth.} </p>

<p>*This couple presumably has 2 decent cars. I know a guy who, by himself, made far far more money than that couple does, and yet still used to drive around in a beat-up old used Mercury Topaz that he bought for just $700. {Hey, don't laugh - the car lasted for more than 3 years before it finally became unusable.} </p>

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<li>Let's see: every year, they spend over 2k for clothing, over $1.6k for hobbies/leisure, 2k a year for gifts, 1.4k for pet care, and $2.8k for Internet/phone/TV, $700 for vacation. Granted, this is a married couple we're talking about, hence you can divide by 2 (but you would also think there should be some 'economies of scale': i.e., presumably they are sharing the cable TV). But still, you add all of this up, and it seems to me that they are spending much more money per year on fun, discretionary purchases than a lot of people that I know that make more than they do and aren't carrying a massive negative net worth around.</li>
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<p>I was about to say that I think this article is very pessimistic, even for my normal financial Cassandra, but actually it sounds a *little *pessimistic. Most of the shock value (for me) comes from the fact that their debt is doubled.</p>

<p>It does make sense not to put money into a 401K at this point. I doubt their portfolio is going to beat a guaranteed 9.75% after you account for risk.</p>

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<p>It looks like they are living tight to me.</p>

<p>You take away the savings, retirement, and taxes and they aren’t spending that much.</p>

<p>I don’t know how two people can live on their food budget.</p>

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<p>$3719 for groceries + $2347 for dining = $6066 for total food in the year or $3033 for each person. </p>

<p>That sounds eminently reasonable to me. I doubt that I spend more than $3000 a year on food, and I don’t even cook. I’m sure if I did, I could spend even less. </p>

<p>But hey, maybe that’s just me.</p>

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<p>$3,000 a year is less than $10 a day. I can’t do it.</p>

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<p>Really? $2800 a year just on Internet/cable/phone? That’s more than $230 a month. Particularly, with the cable TV. What’s up with that? I thought these were medical residents whose work schedules mean that they are basically *living * in the hospital. If so, how much time do these people really have to be watching TBS or NFL Sunday Ticket? I think it’s time to seriously consider living on basic broadcast TV and drive their monthly TV costs to zero. Or, heck, not even have TV at all (I know lots of people who don’t have TV’s).</p>

<p>What about Internet? Again, why not just leave with cheapo basic DSL, which probably costs around $20-$25 a month? I highly doubt that these people need faster speed because they’re camping out on YouTube all day long. </p>

<p>About the one thing I can see is having 2 cellphone plans. But look. My plan costs $50 a month (including all the fees). Multiply by 2 and you still end up paying only $100 a month. Granted, I don’t have a lot of daytime minutes in my plan, but, honestly, how much time do these people have to be gabbing during the daytime anyway?</p>

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<p>“Or, heck, not even have TV at all (I know lots of people who don’t have TV’s).”</p>

<p>Me for example! I’m not even a medical student.</p>

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<p>Uh, I really don’t think it’s that hard. Homemade sandwiches are dirt cheap to make. So is cereal and milk. Tapwater obviously costs nothing. Most fast food restaurants have cheapo dollar deals. Heck, I knew a senior engineer who routinely ate from the dollar menu at McDonalds for lunch. Pay $2 for 2 of the double cheeseburgers and/or McChickens, and that’s a whole meal. </p>

<p>But again, hey, maybe that’s just me. Maybe some of us guys over here have made an artform out of living cheap.</p>

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<p>Full disclosure. I have a TV. I even have cable. But I have *basic *cable. Cost? Less than $10 a month. </p>

<p>Granted, I don’t get ESPN. I don’t get CNN. I don’t get Comedy Central. I don’t get most of the regular cable channels. But that’s OK. I can live without that stuff. I just use the (free) public library to borrow TV shows by DVD box set. For example, I just borrowed the box set for the Sopranos final season. {Don’t tell me what happens!} Cost? Zero.</p>

<p>And look, I even have a positive net worth, and I’m living cheaply. I would think that a couple with nearly half a million dollars in negative net worth would want to live at least as cheaply.</p>

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<p>$2K on gifts is an awful lot of money. $220 a month for telecom? I didn’t even know that was possible, although I guess I could probably think of some exotic cable package that would do the trick. ($100 on cell phones, $40 on internet… $80 on cable, I guess is possible?) $10 a day for food might be on the small side given that most of their meals are going to be rush jobs in the cafeteria.</p>

<p>(For that matter, I don’t understand why these two are so busy. Peds and anesthesia are two tough residencies, but they’re not supposed to be THIS insane; they certainly shouldn’t be exceeding 90 hours a week and most of their hours should be daytime anyway. Not being at home together in a week?)</p>

<p>And I know and understand that it’s important to live in a close place, and I would make exactly the same choice, but that’s hardly living a spartan lifestyle. I live in a really convenient location; I find it worth the expense, but as a consequence CNN doesn’t write articles about how austerely I’m living. (In my defense, I live in a VERY cheap real estate market.)</p>

<p>Too, I’m totally lost about why he committed to a less prestigious, more expensive medical school. I know, it was closer to where he eventually wanted to end up, but I really don’t think that was sound logic.</p>

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<p>I think it is a great skill to be able to live cheap. </p>

<p>The $2800 could be cut. Probably should be. But in the long term scheme of things, whether they make it or not financially is going to come down to other factors.</p>

<p>I can’t eat at McDonalds. OK. I can have their fries a few times a year. But that’s it.</p>

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<p>You don’t need to eat at McDonald’s in order to eat cheap. Learn to cook. You can prepare entire meals for less than $5 easily.</p>

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<p>Put it this way – with the exception of the cable television (seriously!) I would probably spend exactly as they are now.</p>

<p>I would live in a nice-ish place, close to where I work (because 90 hour work weeks are long enough), and in a good neighborhood because I’m having a kid. Such a place would be expensive.</p>

<p>I’d be borrowing that money against my future earnings, which banks let me do because they seem to think I’m good for it. And I’d do it in order to “level off” my consumption. It’s just logical behavior. And medium-sized luxuries, like NFL Sunday Ticket, probably wouldn’t delay my paying off my debt particularly quickly.</p>

<p>But a CNN article about how austerely I’m living seems a little odd.</p>

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<p>“Too, I’m totally lost about why he committed to a less prestigious, more expensive medical school. I know, it was closer to where he eventually wanted to end up, but I really don’t think that was sound logic.”</p>

<p>That’s an $80,000+ difference (Probably over $100,000 when interest and other costs are included). That dwarfs most of the other expenses. Plus, is there even a payoff? Doesn’t Illinois place people in Chicago? I don’t get this either.</p>

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<p>Consider that the cable/internet/telephone likely includes two cell phone bills. Even shared cell plans will probably run them close to $100 a month.
High speed internet is a must. Researching on pubmed is agonizingly slow over dial up (believe me, I’ve done it). Many medical schools strongly require that students have high speed access, so I don’t find surprising that hospitals would demand the same from their residents. Depending on what sort of stuff they have available to them (ie blackboard), there are a lot of videos available on line. Several of the departments at my school videotape all their noon conferences and make them available online, and residents can fulfill their required attendance by watching them online. </p>

<p>Also I’ve heard rumblings of some hospitals are dropping their pager services (because pagers are such outdated technology and it’s getting harder to find people to service them and such) and just using cell phones. Not saying I’ve verified this, but I’ve heard it as fourth and fifth hand information. </p>

<p>Food budget - most residency programs include lunch programs and provide money for food while on call. Usually only $5-10/day, but it can help a lot. </p>

<p>Gifts seem a lot, but who knows how large their families are. I have friends with 7 brothers and sisters married to girls with 5 siblings. By their own admission they don’t feel like they’ve yet reached that critical mass/set of ages where they can go to drawing names and only spending limited amounts on christmas gifts. So everyone buys for everyone for the most part, and it gets expensive.</p>

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<p>Then go to Wendy’s. I love Wendy’s chili, and it only costs 99 cents. Get 2 or 3 of those, and that’s quite a meal. </p>

<p>Or don’t eat at fast food at all. Just make your own sandwiches and brown-bag it. Give me a bunch of homemade tunafish or grilled sandwiches and I’m good to go. </p>

<p>The point is, if you want to eat for $3000 a year, it’s really not that hard to do. </p>

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<p>And how much is that? DSL is available in many areas of the country for less than dial-up. That’s right, LESS. That’s because the telcos are trying to wean people off dial-up as dial-up actually costs the telcos MORE (because a modem call ties up on an entire voice line, whereas DSL uses spare data capacity). Even if you can’t find such a deal, you can probably still get DSL for less than $40 a month.</p>

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<p>Ah, well if that’s true, then I would think that those hospitals should pay for your cellphone service. Why not? Certainly I would think it’s rather unfair for them to force you to burn up YOUR daytime minutes (which you paid for) just so that they can contact you.</p>

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<p>If you’re going to get VOIP/cable/internet, you might as well bundle them. Don’t know what that costs you in your area but in mine, it runs you about $120 a month (before taxes and fees) for VOIP/Digital Cable/cable internet. Standard Cable and internet costs $86 per month. In my mind, it’s worth the extra $40 a month for the extra services. And many people - especially the residents I know - are tacking on TiVO or DVR services so that they can record their favorite shows. </p>

<p>Throw on the cell phone bills as have already been discussed, and we’re up to over $200 a month on phone/tv/internet…which puts us right about where they are at $2800 a year on those items.</p>

<p>Is it the smartest way to spend money? Maybe, maybe not. Could they do it for cheaper? Perhaps. But my point is that this is one expense that is very reasonable and accurate as listed. </p>

<p>Sakky, have you seen how hospitals treat residents? Yes, they should probably subsidize cell phone plans if they are dropping pager service, but that doesn’t mean that they will. And it’s not like residents have the time or energy to organize a rebellion.</p>

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<p>This logic of choosing an osteopathy degree at higher cost over an allopathic degree seems questionable since in the 2006 Anesthesia match 1040 of the 1287 matched positions were filled by U.S. Allopathic senior grads (versus 191 osteopath grads). If the nationwide proportions can be applied the 58 spots in the Illinois programs, 47 spots were filled by allopaths and 9 were filled by osteopaths. Similar data was available in 2001.</p>

<p>[ASA</a> May 2006 Newsletter](<a href=“We can’t find that page | American Society of Anesthesiologists (ASA)”>We can’t find that page | American Society of Anesthesiologists (ASA))</p>

<p>Illinois Anesthesia residency programs.
Illinois Masonic: Chicago
Loyola University: Maywood - Stritch School of Medicine
Northwestern (McGaw): Chicago
Rush-Presbyterian-St Luke’s: Chicago
University of Chicago: Illinois - Pritzker School of Medicine
University of Illinois: Chicago</p>

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<p>Ha! It is entirely unreasonable. Again, why exactly do you need cable? If you are using cellphones, then why do you need a home phone line? Why do you need DVR? I thought residents were working Ibanking hours anyway, so, again, it’s not like they have all this time to be obsessing over the latest season of Desperate Housewives. </p>

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<p>Then you know what I would say? I would simply claim that I don’t have a cellphone at all. So if you (the hospital) want to give me a pager or a cellphone, that’s cool. But if not, hey, what do you want me to do?</p>

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<p>Do students in residencies work in other places for extra money?</p>