The Resident Budget and Cash Reserve

A spending plan that survives a 28-hour call

A workable resident budget has four lines, not forty: fixed costs (rent, insurance, loan payment, phone, transport), a savings transfer that happens the day the paycheck lands, a weekly spending number for everything else, and a small line for the things that make training bearable. The order matters. Savings that wait until the end of the month do not happen, and a weekly number is easier to feel than a monthly one.

Automate the boring parts. The savings transfer, the loan payment, the retirement contribution, and the disability premium should all move without a decision. Decisions are what you run out of at 3 a.m.

The cash reserve, sized to your life

One month of essential expenses in a separate high-yield savings account covers most surprises in training: a car repair, a flight home, a licensing fee that arrives early. Build toward three months by the end of residency and three to six as an attending, more if you carry 1099 income or a single-income household. The account should be boring, liquid, and not the one your debit card draws from.

Credit, quietly

Your credit score will matter for a physician mortgage and for the apartment in the fellowship city. Keep utilization low, pay in full every month, keep your oldest card open, and check the report once a year at the official free site. A resident with a clean report and a 750 score has all the credit she needs; there is no prize for more cards.

Moonlighting money and the tax it hides

Moonlighting income usually arrives on a 1099 with nothing withheld. Set aside 30 to 35 percent of every check for federal income tax and the 15.3 percent self-employment tax, and make quarterly estimated payments in April, June, September, and January. Track mileage and expenses. And put the retirement piece of it in a Solo 401(k) rather than a SEP-IRA, for a reason that becomes important in lesson six.