Budgeting for Medical School or Graduate School
AAMC,
the organization behind the MCAT, recently has written a very brief article
concerning ideas with how to budget for medical school1 (or grad school just the same). I think
everyone should learn to create a budget; I know that I find one useful…if only
I could stick to it, right? :) AAMC already has a collaboration
with a site called “Salt”2, which is to provide financial advice and education. They also provide a monthly budget worksheet 3.
It is a great resource to use.
One shortcoming of this article, though in
my opinion, is the dearth of suggestions in ways to save money. I would love for others to join in the
discussion and describe/brainstorm ways to save money. What are ways you are saving money for your post-baccalaureate plans? Any suggestions for others?
1. Budgeting to Pay for Medical School.
https://students-residents.aamc.org/financial-aid/article/budgeting-pay-medical-school/.
Accessed September 11, 2016.
2. Salt. SALT.
https://www.saltmoney.org/register/index.html?WT.mc_id=PA-AAMCpremed-V&oe=444462&br=00.
Accessed September 11, 2016.
3. https://aamc-orange.global.ssl.fastly.net/production/media/filer_public/9f/0f/9f0f690a-9ff3-4a7b-bee4-2d23e5b5b0d9/budgetworksheet.pdf. Accessed September 11, 2016.
4. Figure taken from https://c1.staticflickr.com/7/6095/6355840185_8e1c4d8f11_b.jpg. Accessed September 11, 2016.
Most people that take the MCAT are more than likely heading towards the idea of pursuing medical or graduate school. It is not an exam that people take lightly and is definitely not taken just for the fun of it. Students heading down this route have the idea that they’re going to be in debt, but do they know exactly how much? What the AAMC organization presented, I think is a great idea because it will help students in graduate or medical school be more prepared for the workload they’re about to endure. If students have a monthly budget, it will allow them to be more prepared for the future. Rather than drowning in debt, they’ll have a better life paying off their schooling one step at a time.
ReplyDeleteAlthough the article from the AAMC is rather scarce in their suggestions, I still think it is a great start for students possibly pursuing this area of study.
Now, to add on to suggestions: a smart way to save money is by using the envelope system, that I learned about through one of Dave Ramsey’s lectures, “Total Money Makeover.” Though it has a similar layout to that of the Monthly Budget worksheet, it’s different in the fact that it keeps you more organized. The Envelope system works because you put money aside for every category you think you’ll need that month (Ex. Food, clothing, Books) and are not allowed to spend above your budget. At the end of the month, if you have money left over, you can put it in your savings! I’ve been doing this recently and have found that I have a lot more money in my savings than I ever did, because this system keeps me disciplined.
Jessica Jastrzebski
Good idea!
DeleteOne universal truth about becoming a doctor is that it is very expensive. According to the AAMC, the average cost of attendance for one year at a public medical school was $32,889 for in-state students and $56,796 for out-of-state students in 2014–2015. Tuition and fees at a private school averages well over $50,000 a year regardless of whether you're an in-state or out-of-state student. That is really expensive. Most students pay for medical school tuition and living expenses via loans or from their own savings.
ReplyDeleteI totally agree with every saving trick and budget plan given by AAMC. Now to add on to the tips on how to save money and cut costs in medical school. First, I think it is very important to pay attention to medical school tuition and overall cost of attendance when evaluating different institutions. A difference in $20,000 of annual tuition means an overall loan burden of $80,000 over four years. Also, analyze your cost of living as well—how does the cost of living on campus compare to similar properties in the area? I also know that the textbooks can be really expensive. Talking to upperclassmen to find out what textbook is worth buying can be very helpful. Lastly, for those that will be getting federal loans, it is very advisable to pay off your interest while you are in school, before it has a chance to add to your overall loan balance and be considered as part of the amount subject to interest.
Unfortunately, budgeting for medical school and grad school has not been something that I have spent too much time thinking about or planning. However, as the point of my graduation draws more and more near the reality of my career choice, and almost inevitable student debt, is starting to sink in. This article gives an interesting view about planning for medical school. The concept of, "living like a student now, so that you won't have to live like one later" is a bit humorous at first glance, but it is indeed true. If I were to start saving, and making wise financial decisions, from this point in my life I will be much better off later on in life. That is not to say that I am currently spending m my money flippantly in a lackadaisical manner, but I also haven't sat down and looked at my budget to assess my overall financial status. Also aside from doing this, I think that cutting back is only half the equation. I watched a video on finance, and essentially what the video put forth was that saving money was futile if the money was simply spent elsewhere. Ie: If you save ten percent on grocery shopping totaling a savings of $10.00 but then as a reward to yourself for "saving" you go out and spend that $10.00 on a movie, it is as if you never saved in the first place. The presenter proposed that any money you save you immediately place into your savings so that it become a “true savings”. Personally I had never thought of saving in that manner but it is something I have since adopted, although in an altered state.
ReplyDeleteOne thing that no one denies when they embark on the journey to become a doctor is that it is going to cost exuberant amounts of money. However, the expectation is that once you make it through all the schooling you spent so much money on you will be making enough money to pay off the debt rather rapidly. Personally, and I think that most people feel the same way, the fact that medical school is so costly discourages me from saving because there is no possible way that I could ever get close to amount needed with a minimum wage job. I've always just been going school with the expectation and mind-set that I will be accumulating a large sum of debt over my years of schooling and I will just worry about it once I'm finished.
ReplyDeleteBut, I do agree with the savings and budgeting tips of AAMC, even though it is unlikely anyone with normal means will be able to accumulate enough to pay for medical and graduate school. The is a positive effect from saving, even if its not enough to prevent any loans, is that the saving can go to paying off the interest on the loans, which will save quite a deal over 4 years. All in all, regardless of how much I save I will be leaving medical school with excessive debt, but these steps and tips will definitely be useful for not only school loans but lifelong debt.
Budgeting can be a rather difficult and daunting task for any person, especially medical school students. As a medical school student, classes and studying should be the main focus, not money. Money can be a side thought if it is budgeted and scheduled before a paycheck is received. While taking out student loans, if the exact amount of loans needed is already figured out before it is time for applying for the loans, then the process will be easier. Additionally, spending money for monthly and weekly bills like rent, phone, food, and gas can be less stressful if the general amount is already planned and budgeted for.
ReplyDeleteSaving money by making coffee at home, paying bills on time, not accumulating interest on a credit card, and refilling water bottles are easy ways to avoid spending money. By decreasing the amount of money spent on those unnecessary things, I can start to pay off the interest that is being accumulated on their loans. Additionally, I can start to save money from my current part time job during the year and job during the summers. Even in my best efforts, there is not going to be a way for me to save enough money for medical school.
The article was a great idea to help reveal an issue I need to address for myself. I worry about paying back student debt AFTER I plan on graduating, however I have not considered what I am able to do while currently being in school. It has always been an aggravating subject to me on how expensive school is. However, I have not actually considered how to save money or to find ways to spend less money. I appreciate the article.
ReplyDeleteKaitlyn Romero
DeleteNote- this is also multiple posts.
ReplyDeleteI agree that the AAMC's article was quite sparse in saving tips- while it's definitely smart to save $5 a month by not buying water bottles, such a small savings is unlikely to substantially impact one's ability to pay for graduate/medical school, particularly this late in the game!
Honestly, at this point, there's only so much 'saving for grad/med. school' that one can do. With that new chapter of life looming just around the corner, starting saving for it now is like starting to save for a new car only after the old one breaks down: you're not going to get very far, unless you plan on putting that purchase off for a long time.
That said, saving and thriftiness has been part of my approach to college for several years now. Although many of these things aren't applicable to others in this current point in life (consider the car analogy!), nonetheless:
- start saving young. My parents started this, trying to put away money for school while I was a child, and occasionally insisting a portion of a gift check go into savings. Once I became old enough to actually start being concerned for college myself, shifting savings money into a growth-focused investment account and putting away incoming money (via work, gifts) allowed me to earn a few hundred dollars of interest for school payments, as well as kept me from spending the money until absolutely necessary (it’s easier to close out a savings account than to liquidate investments!).
- dual-enroll while in high school. This enabled me to get halfway to my A.A. degree without paying tuition.
- get an A.A. at a community college. The lower tuition and ability to commute saved a lot of money.
- do ensure you have an educational advisor. I failed to do this when I transitioned from dual-enrolled to full-time college student, as I didn't know I needed to. Because of this, I got a general A.A. rather than the biology A.A. I should have (and would have, if I'd known such a thing existed) gone for. This put me back a year from earning my Bachelor's, which is a considerably greater cost than if I had known to do this earlier.
- commute. Avoiding living on campus saves money, particularly if you're able to stay with family.
- buy food from Publix, not Chipotle. Making food (not just coffee!) at home saves you money as well as calories. Follow sales, use coupons, and compare prices, and the savings are even greater. According to HacktheMenu.com (http://hackthemenu.com/chipotle/menu-prices/entrees), the average Chipotle entrée is about $6.65. On a recent grocery trip, I was able to purchase a bag of onions, a head of fresh broccoli, a bag of organic celery (it was on sale for the same price as ordinary), two pounds of summer squash, and some tangelos… a total of at least 4 meals worth of stir-fry (discounting that several of those items, such as tangelos, are used as sides rather than entreés) for approximately $18, the price of three Chipotle meals.
- work. I am first to admit that this isn’t always practical to work a job while doing school (I am continually amazed that people are able to work full-time and school full-time), but if it’s possible for you (and if not during school, take advantage of summers!), it’s a good way to save a sum. Perhaps not enough to pay for tuition costs, but it could take care of textbooks and perhaps some other school-related fees. Again, this is worth starting before even doing college, but work is great to both get experience in the workforce (particularly if you can work in an area related to your major) and earn some extra cash.
ReplyDelete- choose a local school. This allows you to commute and avoid out-of-state student costs.
- if you’re going into graduate school, choose a state school. The tuition is lower, but you still get that degree. Most companies won’t care if you got it from Smith University or ____ State.
- cut costs where you can. For example, my brother (also an undergrad) is able to avoid paying a hefty parking fee at UCF by parking at a friend’s apartment and taking a shuttle bus into the school. I often rent textbooks off Amazon, and if that’s not feasible, I buy used. This can be a substantial savings on price. Similarly, I never watch TV or use a landline. Thus, when I moved into an apartment, I’ve not purchased a phone line or cable. (I’ve also used thrift stores for kitchen supplies and other necessities, avoided getting more furniture than I’ll actually need, and decorated with construction-paper birds and butterflies rather than fancy knickknacks and store-bought posters).
- apply for fellowships, etc. I, too, hate the suggestion ‘apply for scholarships!’ I’ve been doing that for six years and have yet to actually get a return. Nonetheless, it’s worth trying- obviously, people DO manage to win, and unlike gambling, the only up-front cost is time. With graduate/medical school, there are further options for fellowships and other programs that might ease the financial burden. I plan on applying for as many as possible for graduate school, in order to try and bring the cost down to something more reasonable.
- avoid debt like Mexican tap water (particularly in this economic environment!). While it alleviates short-term financial worries (just like a drink from a tap in Mexico quickly and conveniently quenches thirst) it only sets up greater problems in the future (like digestive ailments from the contaminated tap water). I’m an extremist in this, after the stock of Dave Ramsey, but avoiding credit cards, car loans/leases, and other forms of debt prevent both excessive spending now (‘while I’m getting a car lease, may as well get a nice car!’ mindset) and overpaying down the road (interest adds up, as well as does the ‘convenience’ of getting to make $300 payments every month for the next several years, using the car example). Wait until you have the cash to make a purchase, buy a used car outright (or even just use a relative/friend’s old, unwanted vehicle) versus taking a lease or loan, etc. Obviously, if there is absolutely no other option, take a loan (if your only option for drinking water is Mexican taps, same thing applies, go with gastrointestinal problems over death by dehydration). But if it can be avoided, do so. And then make a plan and put it in action to pay down that debt as soon as possible.
Great analogy!
DeleteThe amount of money medical school or graduate school costs is scary and depressing to most people, unless you are filthy rich. Many people might decide not to pursue a higher education such as medical school or graduate school because the amount of money that must be forked over in order to attend them. Taking loans out is the most common form of payment, but being in dept is also frightening. My sister went to pharmacy school, and by the time she graduated, she had about a quarter million dollars in loans! And she only did a six year plan instead of an eight year plan. To try and alleviate the stress of money, budgeting is definitely a great idea. However, the process of budgeting is an obscure topic to most people, especially students. I'll be the first to admit that I do not know much about it myself. At SEU, they make all students take a Personal Financial Stewardship class which helps teach students about budgeting and taking care of money. Yet, most people do not pay attention in that class. Besides budgeting, there are some things you can do to help save money. Students spend a plethora of money on coffee, specifically Starbucks or Dunkin' Donuts. Luckily for me, I do not like coffee, so I am not tempted with that. Instead of going to these coffee places, make your own coffee. It might not be the best, but it is definitely cheaper. Another thing, I never buy bottled water. I have a Brita water bottle that filters water as I drink it. So I just use sink water, and the bottle does the rest. Also, I try to carpool as much as possible to save gas. When I go to the store or other places, I take a group of friends. This way, we can take turns driving, which will save gas money. There are many more easy ways to save money. It just takes some self-control and a determined attitude to make a budget and find ways to save money. It is okay if you have to sacrifice a little now because it will save you a lot later.
ReplyDeleteI, like a lot of other students, face a very real fear of insurmountable debt when looking to go to medical school. I personally have not idea how anyone can save in their undergraduate for medical school, especially when the majority work at a minimum wage job. These articles give some good ideas on how to be better prepared financially for graduate work.
ReplyDeleteI found this article to be very helpful. I can definitely see myself applying the budgeting tips to my life. The most helpful information the article provided were the links to budgeting sheets. I've been wanting to start budgeting, but I didn't know how to go about it, so I clicked on the "Basic budget sheet" and it looks very easy to follow. I imagine it will be very helpful with my finances.
ReplyDeletePersonally I could use more information on how to budget and save. The budget sheet is a good idea, I know a few people who do some sort of budget sheet and it does seem to help. The main thing I do to save is just to cut down on frivolous costs, or things that are not really necessary. I am of course intimidated and anxious by the costs of graduate school, hopefully I will be accepted to a school in state, or close to home to cut down the cost a bit.
ReplyDeleteDepending on how long you plan on pursuing higher education, and to what degree (Bachelors, Masters, PhD), student loans will most likely be unavoidable, unless you inherit a small fortune. Personally, my first rule of thumb for any budgeting is to decide what my goal is or what I want the outcome of my budgeting to be. If a student is unsure of what they want to do with a post-graduate degree, then don't go to grad school. Simple logic. Many students pretend to know what they expect to do following graduate school, let alone undergraduate school. Unfortunately thousands of students go into debt every year simply because they have the preconceived notion that gaining education will provide them with a job. A guided education, with knowledge of ones personal abilities, skills, learning interests, and work desires is potentially worth large amounts of student loans, so long as they plan on paying them back. All this to say, budgeting for graduate school really isn't going to be influenced by whether or not you buy bottled water. Save money, work hard in and out of the classroom, apply strategically for grants and scholarships, and most importantly, only take in loans what you need, no more, no less. Oh, and pray a lot too.
ReplyDeleteMicah Thornton
I usually try to not think too much about the financial issue of school as the learning aspect is tricky enough to deal with. However, I find that simple things such as making sure that you balance your income vs spending and that the income stays much higher than the spending portion. This isn't always easy and some sacrifices must be made.Usually for me this comes in the form of getting food that I am not a huge fan of but that costs much less than my more preferred kind. I do like the almost fluid plan that is mentioned in this article as it allows for shifts based on the present needs and the physically writing down of the budget in order to stay on track.
ReplyDeleteI appreciate the AAMC's acknowledgement that students face an incredible amount of financial adversity when pursuing careers in medicine. Instead of sugar-coating the high costs they provide students with tools to prepare for the future. I can think of several areas where I could cut down on costs that could be used to save for the future, one being the high price I pay to live on campus at SEU and the price of meal plans. For someone that struggles with planning for the future, I both appreciate that the AAMC did not put down a set of laws for financial planning and wish they had provided more concrete plans for financial planning. On the one hand, I appreciate the flexibility that I will have with a more personalized plan, while on the other I would be concerned with the efficacy of my personal plan. The key to it all I think is commitment, putting a plan down in stone and sticking to it, as no plan can likely prevent any acquisition of debt.
ReplyDeleteIt is well known that the typical medical student or, aspiring medical student for that matter, faces many financial hardships. The amount of financial adversity that individuals who want to pursue a career in medicine will face is just unfair in my opinion. As an individual who wants to pursue a career in medicine. I am very happy that AAMC would put out a system to help us better budget. It is nice that provide a solid framework in which we as individuals can build our own plan and help ourselves to reach our goals. Every step of the journey for us is one that is full of commitment and hard work. I think that many individuals applying to medical school should take that same hard work and dedication that they put into school and apply it to there budget. So that they will no longer have to limit themselves on what they can afford.
ReplyDeleteLoans are an unavoidable cause that has to be dealt with as a college student. I'd say it is true for almost every college student that he/she has struggled or will struggle with finances, especially those wanting to pursue a medical career. Personally, I think it is sad the amount of financial damage done to a student hoping for a medical career. It can not only ruin their mindset of their goals, but will put unnecessary stress not only on the student, but their parents, as well. The system that AAMC is offering is a great tool that we can utilize. Budgeting is something that students struggle with because up until this point in time, they have not had to budget. Being thrown into the "adult world" is overwhelming and we sometimes act out of impulsion, leading to more financial instability. Therefore, this system would help students budget their lives better, giving a more secure future. Now, the only issue would be actually devoting time and effort into the AAMC system.
ReplyDeleteAs a student aspiring to attend medical school in the future, a budget is a great way to lay out assumed costs of everything that I may encounter. Student loans are one of the many things that a medical student will have to deal with, however the nice thing about loans is that paying for them doesn't have to happen until 6 months after we are out of school. A budget is always helpful when deciding to really achieve a goal of saving or laying out expenses. Dave Ramsey also has two books about budgeting and trying to stay out of debt that are great sources of information. When young adults are thrown out into the world and have to work and attend school and worry about rent, gas, tuition, food, books, etc, it can become very overwhelming. Therefore, a system of budgeting should be considered to lessen the stress of dealing with day to day necessities.
ReplyDeleteBudgeting and financial planning is a critical responsibility students must undertake to limit furthering their debt in Medical school, or any graduate school. Most likely, students are already in debt after taking out loans to pay for school, and due to undergraduate loans demanding payment, if one does not construct a strict management strategy for their financial resources, they could face even more debt down the road. As such, I appreciate the AAMC providing students with a budgeting tool that aids in financial management. It's been said, "If you fail to plan, you plan to fail." I think this applies directly to financial management.
ReplyDelete