If you're seeing this message, it means we're having trouble loading external resources on our website.

If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked.

Main content
Current time:0:00Total duration:5:56

Medical resident: My budget and planning for the future

Video transcript

my name is Jorge Taurus I'm a medical resident and my annual salary is $55,000 a year Los Angeles is I think is a great city it's a very large city and with large cities come a lot of like wonderful opportunities there's great restaurants there's a lot of attractions to do it's also in California which is got some of the best weather and probably in the country but along with that opportunity and great weather it's rather expensive and probably one of the more expensive cities in America because it's so large the price and cost of living can vary quite dramatically from the different parts of Los Angeles I particularly live on the west side of Los Angeles which is closer to the UCLA campus it's closer the hospitals that I trained at and that's a typically more expensive part of the city so I actually do feel in control of my finances so for me I've sort of already know how much I'm going to be making throughout residency and then years to come I also have an average approximately of what a physician would potentially make that's a practicing licensed physician so based on that I've been able to look at how many years it would take me to pay off my student loans during the training period the federal government has set up repayment that is really based on how much income you make so it can vary from 10% to 15% of your annual gross income and so you pay a little at the beginning and you usually pay a lot more towards the end so I make an annual salary $55,000 a year my monthly pre-tax amount is four thousand five hundred dollars of that seven hundred dollars goes towards taxes federal taxes state Social Security and then also I have about three hundred fifty dollars that goes towards a 401k that's pre-tax money that is automatically withdrawn from my paycheck my take-home at the end of that is around three thousand four hundred and fifty dollars and that's sort of the money that I am able to choose how much I want to spend in sort of what areas so for me my current rent is a $1100 I live in a two-bedroom one-bathroom apartment and I have a roommate who's also training physician in terms of utilities gas and electric I spent around $50 a month in terms of Internet and sort of basic TV is also around $50 a month my cell phone bill is around $200 a month and that's actually a family plan I have like four other lines that are on there that my siblings and my parents are on as well and so together I just pay the full cellphone bill and in terms of car expenses I own my own vehicle and so I pay car insurance and then gas for commuting to and from the hospital that averages around like $250 a month in terms of my student loan based on my income that I make as a resident being 10% of my annual gross income I pay right around $450 altogether including all of my loans and then in terms of my food expense I pay has been around $200 it's rather on the minimal side because as a medical resident oftentimes a lot of programs and particularly this one we get free food that's covered as medical resident and so whenever we need to eat like breakfast lunch or dinner oftentimes the cafeteria it's provided under some of our compensation in terms of my other category I typically in my budget I don't list much expenses in other and the reason that being is the job itself as a medical resident demanding the hours are rather long and so typically in a given month there are times where I don't really do anything other than patient care and you know fundamental things at home and seeing some friends and family and so I typically leave that category empty I do however have a category for restaurants I spend around $200 a month and that's something that I really love to do would go out with friends and family and grab something to eat from time to time overall that leaves me with about nine hundred and fifty dollars a month to choose what to spend with after all of my expenses I decide to contribute four hundred and fifty dollars a month to my Roth IRA at that rate that would max out my Roth IRA at the max contribution limit which is five thousand five hundred dollars a year I chose to put money in a Roth IRA in addition to the 401k because it is post tax money and also Roth IRA contributions and then after that the leasing with around five hundred dollars in sort of additional savings if you start early on and you get used to dedicating certain amount of money to certain accounts you are it's much easier for you to live based on those on that sort of income then you get really used to it and it's not as as hard once you're already making it paycheck to then all of a sudden cut 15% out of your income to go to savings
Careers brought to you with support from Better Money Habits® Powered by Bank of America® Bank of America, N.A. Member FDIC. Equal Housing Lender. Investment Products: Are Not FDIC Insured, Are Not Bank Guaranteed, May Lose Value