Residency finances

[MsSassyBaskets]

Calling [MENTION=985]spotty_dog[/MENTION] and other personal finance enthusiasts!

DH and I have started talking about managing our finances during residency, and I'm wondering if we should hire a financial adviser (and if so, who and how!?).

We have a number of new factors - mortgage payments taking the place of rent, high daycare expenses, loan payments for both med school and my master's coming into play in this calendar year... and I haven't used Mint in months (cringe). My initial plans are to track for a couple months to see how our new income and expenses are washing out. I won't have it all calculated until I've seen the actual take-home for a couple months and worked out our new utility expenses, etc. We still have an emergency fund, mostly in mutual funds because we're depleting our cash reserves with the house/move, and I have a small retirement fund. DH has no retirement to speak of. We are both 31.

The big questions are: exploring loan repayment/consolidation/refinancing options, how to start getting DH back on track for retirement savings, how to file taxes to our best advantage (together vs. separate, etc.), balancing savings with loan/mortgage repayment, and saving up for some large expenses like a new furnace and a new car when our older one inevitably dies.

I'm assigning the WCI book to both of us to read in the next couple months, and I'm going to get back on track with tracking income/expenses and setting a basic household budget. What's next? What could an adviser help us with? If we decide to use one, how do we find one?

[DrBandMe]

I can give you the name of our advisor and one that a lot of our friends use here in MKE if you'd like. I can also give you a rough idea of hubby's take home based off what B brings home this year. Shoot me a text if you'd like any info I can provide. Feel free to post in the RSA group for advisors/banks/loan refinancing recommendations.

[spotty_dog]

I'm not really any help on the nitty-gritty. I just muddle through as best I can.

I see two ways to handle personal finance stuff. The simple, conservative way is to live on 80% of what you make (including all debt payment) and save the rest. Make sure you have a solid emergency fund (it should not be subject to market risk, and if you have a house, it should cover about 6 months of living expenses) and use your available tax-advantaged spaces as best you can (Roth IRA can be nice to utilize at this stage if your income levels now are lower than you expect them to be in retirement). Make sure you can cover 1-2% of the value of your home in maintenance each year, and that you're not going to dip too far into the emergency fund when you start looking at interviewing and moving expenses and living without a paycheck for a month or more. There are some more specific suggestions in the (kind of ridiculously exaggerated) book "Financially Stupid People are Everywhere."

The more complicated way to balance your income and expenses on a tighter budget that utilizes more of your income, may or may not involve an adviser to help you identify goals, prioritize savings, and set aside specific "buckets" of savings. You'd want a fee-only adviser with CFP or CFA certification and just pay them by the hour for planning purposes. I gather the cost should be under $200 per hour. Then you can get a check-up if you feel you need one in a year or two. Don't put your assets under their management though unless you have a LOT of assets and REALLY don't want to do the legwork. No one cares about your money like you do.

Good luck!

[Vanquisher]

I just got an advisor through North Star. So far, I'm very happy.

[MsSassyBaskets]

[MENTION=4334]DrBandMe[/MENTION], I would definitely appreciate an adviser recommendation, thank you!

We do have a plan to rebuild the liquid emergency fund without having to cash out investments. It will probably take 6 months or so.

Can a "regular" financial adviser help with questions specific to loan repayment and tax filing and such? Or really just the how and what of saving?

[scrub-jay]

I have a good group that's also part of North Star and they are free for those in training (they want to build the relationship for when you are attending level). They also do contract review & have a database of recent contracts in your area/specialty to advise you as to whether it's fair or standard or if it can be negotiated (bonuses, pay structure, malpractice, etc). Doesn't take the place of a lawyer review, but is valuable for the comparison factor.

[MsSassyBaskets]

I have a good group that's also part of North Star and they are free for those in training (they want to build the relationship for when you are attending level). They also do contract review & have a database of recent contracts in your area/specialty to advise you as to whether it's fair or standard or if it can be negotiated (bonuses, pay structure, malpractice, etc). Doesn't take the place of a lawyer review, but is valuable for the comparison factor.

Awesome - did you just look for a group local to you?

[scrub-jay]

Residency finances

Awesome - did you just look for a group local to you?

Don't be jealous... but they offered dinner to ppl (and spouses) in DH's program and I don't pass up free food. They obviously have more interest in the people finishing up this year, but they are all about the relationship. They have clients all over the country although this small group are primarily in MN and KC.

ETA: Let me know if you need a contact.

[MsSassyBaskets]

Side note, does anybody know anything about Pay As You Earn loan repayment? I had thought that DH wasn't going to be eligible because he had federal loans from undergrad prior to October 1, 2007, but then I read that Obama signed an executive order so people who weren't "new borrowers" could participate. I can't find any specific information about eligibility though. It would cost a lot less than IBR in the long run if he is eligible...

[scrub-jay]

Start here: https://studentaid.ed.gov/repay-loan...ay-as-you-earn

Then you call your loan servicer and ask questions.

[MsSassyBaskets]

I saw that and it still says Oct 1, 2007... boooo. I thought the program was supposed to expand so that he would be eligible. Wouldn't that be nice.

[scrub-jay]

I'd still call your servicer and see what they say. They are the ones who approve it or not, I've known people who thought they didn't qualify who ended up getting it. Worth asking, worst case they reject him.

[MsSassyBaskets]

I'd still call your servicer and see what they say. They are the ones who approve it or not, I've known people who thought they didn't qualify who ended up getting it. Worth asking, worst case they reject him.

We will... I know my loan servicer told me they couldn't even give me IBR estimates until my grace period was over, which is total BS for those of us who want to plan ahead and create a budget. Since DH hasn't graduated yet I'm not sure if they can tell us much but we will see.

[SoonerTexan]

I hate how the system works. No info the BOOM figure it out all at once or pay thousands by the end of the month please!


Sent from my iPhone using Tapatalk

[gcuthbe1]

There's lots of information out there, but it does take a lot of reading. My rule if thumb is, if you can handle doing your own taxes, you can handle being your own financial advisor. Biggest thing - if you have loans with higher interest than 7%, make moves immediately. For any private loans definitely consider refinancing via home equity.

Sent from my SM-G900V using Tapatalk