Dr. Cory Fawcett and Chase discuss budgeting concerns as a medical student, the right mindset to have about debt, and how to choose a medical school.
- [04:28] The Importance of Budgeting as a Medical Student
- [10:17] The Dangers of “Debtabetic Neuropathy”
- [15:33] Tips for Budgeting as a Medical Student
- [19:38] How to Choose a Medical School
- [23:40] Why Medical Students Should Not Buy a House
- [27:34] Debt is a Problem, Not a Solution
- [28:42] More Resources for Medical Students and Doctors
Dr. Fawcett is a retired private practice general surgeon, and the author of several award-winning books — including The Doctor’s Guide to Starting Your Practice Right and The Doctor’s Guide to Eliminating Debt.
As a medical student, Dr. Fawcett recalls driving past a soup kitchen and realizing that the people in the soup kitchen line had a higher net worth than most medical students. This is because many medical students owe lots of money and have a negative net worth. So, Dr. Fawcett’s first piece of financial advice to medical students is to minimize the amount of money that they borrow. Although today it is difficult to completely avoid medical school debt, students have control over the amount of debt that they incur. And you can find many ways to save money and reduce debt as a medical student, if you have the right mindset.
A common fact to remember is that for every dollar that you incur in debt during medical school, you will have to pay back four times that amount as an attending physician. As a medical student, you might think that debt is the solution, but as an attending doctor, you know that it is a problem.
Dr. Fawcett cautions against “debtabetic neuropathy,” which is a play on “diabetic neuropathy.” In diabetic neuropathy, patients develop numbness in their legs, which means that even when their leg is injured, they cannot feel it. Eventually, this can lead them to lose a leg. “Debtabetic neuropathy” can cost much more than a leg. The first time you incur debt, you are probably very reluctant. But as the years pass, you get numb to incurring debt, realizing that all the payment is deferred until later on. This can cause major “injury” to your finances in your attending years.
Since he was under scholarship for his undergraduate degree at Stanford, and only incurred $6,000 in debt, during his first year of medical school, Dr. Fawcett was shocked and pained by the amount of debt that he incurred. Unwilling to incur more debt, Dr. Fawcett decided to obtain his medical degree through the US Navy. If he had suffered from “debtabetic neuropathy” he would not have worried about debt and would not have found himself this solution. Although completely avoiding medical school loans is impossible for many students, they must avoid “debtabetic neuropathy” so that they have the right mindset to minimize the amount of debt incurred.
In terms of actionable medical student budgeting tips, Dr. Fawcett recommends cooking your own food, buying a cheaper car, and having a part-time job. He also cautions medical students against buying a house until they are attending physicians. Buying and selling a house both involve fees, which take perhaps five years to recover. Neither a medical school nor a residency will last more than five years, which means that by the time you recover the cost of buying, you may need to move again. Renting is the cheapest short-term option and helps you to avoid yet another large debt.
Check out Dr. Cory Fawcett’s website Financial Success MD, and his doctor’s guides/books to learn more about being a financially successful medical student or doctor. Sign up for Cory’s biweekly blog. Follow Dr. Fawcett’s Facebook page, and connect with Cory on LinkedIn.
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