A Doctor asks for Advice about Student Loans

http://www.connercoaching.com Today -- I'm answering a question from a reader who asks:

QUESTION: I am a physician and will be practicing in my specialty soon. While I'm excited, I am facing almost $200,000 in student loans. I have lived frugally all this time, but now that my income will increase dramatically I want to buy a house. I am hesitant with that much student loan debt.

ANSWER: You are right to be hesitant. I would suggest you continue to live 'light'. If you have an apartment that's reasonably priced, stay there for a few more years. Live on a portion of your income - not knowing what your new income will be I'll just use an example... let's say you will be earning $120,000 initially after taxes you may bring home about $85,000.

If you live on the same amount you did while a resident -- about 50,000 - you will have 35,000 to put toward your debts incurred during the process. That's student loans, credit cards etc. Do not run out and buy an expensive car and a big house. The time will come for that later. Work on paying off your debt, now that you are earning more money and later you will be able to buy whatever you want. Fight the urge to do as you may see some of your colleagues doing and know that you are building a better financial future for yourself later.


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Category:

Education

Tags:

• physician
• student loans
• doctor
• finances
• residency
• money management
• financial advice