Money, money, money

When I was in med school, I’d hear rumors about how much money people make in residency,how much they’d end up saving etc. Well don’t listen to rumors, I’ll give you the facts right here. PGY-1 (post-graduate year 1) residents in the US makes around $47,000-51,000/year depending on the state they live in and the program they’re training in. I get paid bi-weekly (i.e. twice a week) and my health insurance and rent are automatically

deducted from my salary. What remains is automatically credited to my bank account. Not all programs do this. Because I get my health insurance from my hospital and I live in housing subsidized by the hospital, it’s all integrated into my paycheck. It’s just more convenient.

So here’s the breakdown of the biweekly paycheck:

Gross pay: that’s how much money I get every 2 weeks, multiply that by 26 (that’s how many weeks are in a year, yeah I thought it was 24 too, but apparently not) and you get $49,727, which is my annual salary.

Deductions: the first 4 deductions are taxes, then below that I have my dental insurance, my rent for 2 weeks (it’s $1,450/month), and my health insurance. So my actual spendable salary is $734/2 weeks or $1,468/month. That’s only 38% of my gross pay! So you lose most of your money to rent and taxes. This is why a lot of people come to work in Qatar, just look at how much of their salary they lose to taxes and rent. N.B. since I am under a J-1 visa, I don’t pay medicare and social security taxes which end up being around $140/2 weeks. If you’re an American citizen you would pay it. I had to ask them to stop deducting those tax, they didn’t do it automatically, it’s your responsibility to let them know! It shouldn’t be, though. I guess they just don’t give a damn. How rude! There’s also another deduction of $734, that’s not an actual deduction, they are just removing that amount from the physical check since the money goes directly to my bank account. So the physical paycheck ends up being just a receipt.

You’ll also notice at the top of the paycheck there are tax allowances. I have 0’s for all of them. One can claim more tax allowance points if one is married, has children, etc. In other words, expenses. The more points you have, the less tax they deduct from your paycheck every 2 weeks. So you make more money/month. But when it’s tax return season, you have to pay that money back to the government. So you can either pay your taxes now or later. I choose to claim no allowances and pay all my taxes now. But since I’m claiming no points, I may be entitled to some allowances that I haven’t claimed. So I actually end up gaining money in tax season. I spoke with one of my upper classmen who’s on a J-1 visa and doing his residency in NYC, and he said he got a check for around $3000 at tax season. It’s really complicated; I can’t explain it any better than that. The bottom line is, it doesn’t matter how many points you put for tax allowance when you work in the states. You’re not losing money; you just get it now or later.

With the $1,468 I earn/month, I have to pay my electric bill ($25-30/month), my iPhone bill ($75/month), and my internet bill ($29/month). So then I’m left with $1,330. I use what I’m left with for food, clothes, going out.

So yeah, don’t expect to save much money during residency. But take into account that I’m living in NYC, one of the most expensive cities in the world. My classmates living in other cities pay much less for rent so they end up saving money. I’m paying $1,450 month for a tiny studio apartment! On the other hand they have to buy a car and maintain it, which is very expensive. I, on the other hand, live right next to the hospital so I can just walk. Also if you used QF for financial aid in pre-med and med, you have to pay around $500/month. Ouch. Thank God I didn’t. Then there’s the cost of buying all the furniture and stuff for your house when you first move in.

But there’s hope! Here are some tips on saving money in residency: 1) get a roommate. It’s cost effective and you won’t feel as lonely. I’m living with one of my classmates from med school and I think it’s working out great. 2) don’t’ eat out unless you go out with people. I buy a lot of prepared meals from the supermarket and cook on my days off and store it in the fridge/freezer so that I can eat quickly when I get home. I only eat at nice restaurants when I go out with other people. 3) turn off your lights and air conditioner when you go out. When I asked one of the residents how much she pays for electricity, she said around $80/month. So don’t just leave things on when you leave the house. 4) clean your own house, 5) don’t dry clean things after one use. 6) use your hospital meal card when you’re on call and take advantage of noon conference lunches when you’re working 7) probably the biggest money saver is at the beginning of the year, residents sell their old furniture when they graduate or just want to buy new stuff. All I really paid for was my bed and couch, the rest I just bought for practically nothing from the other residents.

I’ve actually managed to save >$2,000 since I started residency in June using the above techniques. And it’s not like I deprive myself. I go out and order whatever I want on the menu, and I take cabs sometimes when I don’t feel like taking the subway. You can live comfortably, just be reasonable. But really you just eat, work, and sleep in internship, so you won’t even have the opportunity to be frivolous with your money.