Finances and Residency--Give It To Me Straight

Hey, all.

Right now I'm really stressing over our finances during DH's residency. He's going into Path, and we have a list of goals to meet during the first 1-2 years of his training. Our goals are: buy a house, start a family, and live on only his pay so that I can SAH with our child(ren). We don't plan to TTC until he's 6mo-1yr into his residency, so I will continue to work during that time and hopefully throughout pregnancy.

DH is in the USAF, so he has a couple of options. The first is to try to do a military residency. According to DH, the military will pay about $60K/yr, plus benefits, including a housing allowance. We would have more than enough money to meet our goals on such pay, but the problem is that the only AF path residency is in Texas, and we don't want to move so far away from our families in Pennsylvania. On the other hand, I'm afraid we will find it very difficult to meet our goals on the $40K or so that a civilian program is likely to pay. If we can do it, though, I don't want to move across the country from home.

Do those of you who are in the residency years now think that we can get by on a civilian resident's pay and still meet our goals of having a house and a family on one income? How difficult should we expect it to be? Any tips?

FYI: We are debt-free except for the remainder of my undergrad loans (~$15K) and about $40K from DH's first year of med school. We have about $40K in savings. Finally, DH has already been offered interviews in Cleveland, OH, and Lebanon, NH, and has also applied to places in several other cities throughout the eastern US (almost all low-to-moderate COL areas).

[houseelf]

Re: Finances and Residency--Give It To Me Straight

First, best of luck. I know very little about the military medicine path, but I do know this. $40,000 in some places for a family of 2 adults plus infant is doable in some regions and impossible in others. You need to really think hard about COL when putting in your rank list if SAH is your goal. Also, there is a wide range in that $40,000 pay range, with some places offering around $34,000 with expensive benefits and others starting closer to $50,000 with cheap benefits. In this sort of situation, the numbers are going to mattter A LOT.

Still, many families have done this. Save like you have never saved before. Kids are ferociously expensive.

Kelly

Re: Finances and Residency--Give It To Me Straight

Thanks Kelly.

Regarding the COL in the places DH has applied, the cities I can think of offhand are: Morgantown, WV, Pittsburgh, PA, Hershey, PA, Winston-Salem, NC, and Durham, NC, in addition to the places I mentioned in my first post. Right now, I can't remember where else he applied.

Anyone know how much a resident's pay gets you in any of these places?

Re: Finances and Residency--Give It To Me Straight

It really depends on how modestly you can / do live. It can be done. It is rarely done w/o family help, or accumulating credit card debt, or a combination of both. We did not live extravagantly at all ... but made lots of little stupid purchases and dug ourselves quite a hole. I know others who did live quite modestly, but had family help with furniture purchases, vacations, and even cars. Life is just expensive - and residency pay is CRAP.

I can give you a lot of info about Cleveland - specifically Path - before you rank if you continue as a member. Feel free to PM me as the time gets closer.

Re: Finances and Residency--Give It To Me Straight

For cost of living info, try this:
http://www.bestplaces.net/col/

Would you rent or by a house? I noticed that there is quite a variation in property tax and thus your monthly escrow payment. That is something to keep an eye on.

[planet]

Re: Finances and Residency--Give It To Me Straight

When the actual numbers are being crunched some questions to ask (HR can asnwer some):

Is annual salary calculated by dividing by 24 (as in 12 months*2 for biweekly) or by 26 (as in 52 weeks/2 biweekly) as the difference can be substantial. GET a copy of benefits options with your out of pocket costs. What is the retirement plan policy (some are mandatory contribution, some not and this will impact your take home). Taxes in that state.

Re: Finances and Residency--Give It To Me Straight

I know your list of cities pretty well, I'll pm you on them. Yes it can be done. We are a family of four, and have been living on about the same income for a long time. Some years are better than others, some times it's that check in April that saves the car repair from accumulating to much debt on the credit card. Some years we've come out even - but never ahead. We live frugal, we could live more frugal,
which would mean:

less fresh fruit and veggies

no gym membership (which we got only for me and the kids) and ask anyone who is a SAHM and no husband to help give you a break - this is my sanity. But sidenote on this I got a small discount through the YMCA, and I know ladies who have worked at the YMCA one day a week and got a total free membership for the family, so there are ways around the extra $$

no cable - but after 8 years of marriage we finally got cable, only cause when we moved reception was very bad (on a very $$ antenna) and we couldn't get PBS - a deal breaker, remember we have kids and the need for sanity but if push can to shove we could rid of this and we got only basic cable, no HBO for us

driving less, which I need to do just to get out of the house, but yeah I could do it less

never eatting out, and to us eatting out is a coupon and a dinner for four for $15 to $22 w/tip, hardly high living, but yeah we could skip this too

and we could drink Folgers coffee, um... hack hack, um... no DH and I both agreed if our good coffee had to go we would just drink tea



Every family has things that they do that are important to keep some level of happiness, and I don't think you should give everything up. But if you want to save money you will have to. If you are ok going even then you don't. Oh and I would mentally prepare for extra debt in residency even if you have no plans to take out extra debt, loans whatnot, cause some months the car won't start, the family is sick, the cat gets hurt, and whatnot, and on a residency salary there isn't much give for these $$$ extras - sad but true.

HTH, it can be done, but you have to be anal every week on every purchase, and worry about how much you spend all the time, but it can be done.

Re: Finances and Residency--Give It To Me Straight

Have you visited the FREIDA online search? It has all of the residencies, and gives an average pay/hours/insurance and things like that.
http://www.amaassn.org/vapp/freida/pgmr ... 9,,00.html

I hope this helps! Let me know! I'm in the same boat as you are and looking to start a family around the same time, but I don't think we will be able to have me stay home until DH is done with residency.

Re: Finances and Residency--Give It To Me Straight

When the actual numbers are being crunched some questions to ask (HR can asnwer some):

Is annual salary calculated by dividing by 24 (as in 12 months*2 for biweekly) or by 26 (as in 52 weeks/2 biweekly) as the difference can be substantial. GET a copy of benefits options with your out of pocket costs. What is the retirement plan policy (some are mandatory contribution, some not and this will impact your take home). Taxes in that state.

Excellent suggestion.

[SuzySunshine]

Re: Finances and Residency--Give It To Me Straight

We will be dropping to one resident salary when I leave my job in March. I would say COL makes a huge difference like most people have posted. I'm not familiar with those cities you listed as we've never lived on the east coast.

We own a home, will be adding a child, have a mortgage payment, two car payments, my student loan payments but we have been saving for the last three years so that we could do this without going into debt, or at least that is the plan there are always those unplanned things that can come up. I would say if you're will to spend that savings rather then go into debt you should be able to do it assuming you don't have a high COL and live frugaly like others mentioned.

[DCJenn]

Re: Finances and Residency--Give It To Me Straight

FIRST...

Please don't assume that you're going to get a civilian residency. The AF puts you where the AF wants you. Sally and her husband were, to put it mildly, surprised when they were sent to San Antonio for residency.

You can plan all you want but DO NOT discount the whims of the AF.

Jenn

[madeintaiwan]

Re: Finances and Residency--Give It To Me Straight

FIRST...

Please don't assume that you're going to get a civilian residency. The AF puts you where the AF wants you. Sally and her husband were, to put it mildly, surprised when they were sent to San Antonio for residency.

You can plan all you want but DO NOT discount the whims of the AF.

Jenn

This is why we did not accept the AF scholarship in med school. Boy were they pissed and had numerous people call DH to convince him to change his mind. DH heard about a AF scholarship student who matched into ortho the previous year but wasn't allowed to do ortho because the AF didn't need any at that time. My dad was in the AF so I have issues.... so yeah, what Jenn the only guarantee in the AF is that there is no guarantee.


ETA: We're in PGY1 and we have two children (hopefully we'll have a third) and I have SAH since we started medical school. Like others have said. It is tough and you have to make sacrifices but depending on where you end up it sounds like you should be ok, especially if you don't mind tapping into your savings. We own a house but only because of the physician mortgage program, we drive older cars and don't have car payments. We rarely eat out, not that DH is around anyways. We are lucky that our families help us out as much as they can. Health insurance (how much and what we had to pay) was a big issue for us when we were doing our rank list. Being near family is nice but there is no guarantees with the match. I've survived being 2000+ miles from family for 4 years and have another 5 to go. Anything is do able.

[MDPhDWife]

Re: Finances and Residency--Give It To Me Straight

Our situation is a little different in that DH gets a stipend during med school. It's about 1/2 of what a resident makes to give you an idea. I've been a SAHM for the last 2 years and it can be done. It's all about priorities and budgeting. When I was working full time we had a lot of small luxeries that we thought we "needed". Once we ran some numbers we discovered there was a lot of fat to cut in the budget and that we could get by. COL is also a HUGE factor. We live in Albuquerque and although housing has gotten expensive, I bought a new home when I was 18 so our mortgage is very affordable.

The others have given you some great advice and your ahead of the game by planning and doing some research!

[Auspicious]

Re: Finances and Residency--Give It To Me Straight

:nothing:

I'm late and you've already gotten great advice here, I think, I just wanted to say that we had the same three goals and similar situation/savings etc. I agree that it really depends on the exact salary and the exact COL you end up with and a bunch of little variables. I think you'll either nearly miss it or barely make it but it will be close either way.

How it panned out with us is that when we matched in Evanston, buying a house went right down the tubes--we still rent. I'm not that twisted up about it, honestly, and pretty much think things worked out for the best in this case, even without the house. I think in many of the other locations on our list we would have made all three goals.

Also I am (and always was) planning to continue working (very part-time without using childcare) after our baby is born, but my income is more cushion for us than part of our sustenance. (For example, as a freelancer I don't have paid maternity leave, so that will be a time when we're just on resident income.)

I wish I could tell you specifics about your cities, but the only one that was also on our list was Dartmouth (which he liked and was in our top five).

[Michele]

Re: Finances and Residency--Give It To Me Straight

I wanted to agree about the COL for an area. Here the average household income is just a little bit LESS than a resident salary....we could've done just fine on one income....however I want more of a Stepford lifestyle now...so I work part-time.

And I wanted to add that while I don't know how competitive Path is....I'll never take the match for granted again. We ended up WAY down on our list.