The Loan Debt Number That Changed My Life

Over a million dollars...my heart beat rose, my eyes scanned the bottom of the page believing I imagined those extra zeroes, but the numbers and decimal points remain unchanged. 1.5 million dollars was the number on the loan repayment plan page. No - I’m not talking about MY loan (whew!), but rather that of my best friends-- a dual physician couple that I grew up with, now with a newborn, and seemingly chained to their jobs because of their numerous lifestyle upgrades and absurd debt accumulation. Seeing that number was my “aha” moment.  I knew I had to make changes so that I wouldn’t end up in a similar situation. 

I can describe my “financial history” into two phases:

Phase I - Ignorance is Bliss

Like most medical students, I didn’t worry too much about my student loan debt. This was in part because I already had too many other things requiring my immediate attention (e.g., exams and clinical performance) and partly because whenever concerns about finances were brought up by fellow medical students we were always told “don’t worry, you’ll make plenty of money when you start working, and it will be easy to pay off.” 

There also seemed to be an “air of mystery” around finances.  There were so many words and phrases that I had never heard of, much less understood, and with the onslaught of learning involved in medical school, finances seemed like another “class” that I didn’t have the mindset or energy to  invest my limited free time into learning more about.

Up until this point, I knew very little about finances, but I knew that I didn’t want to end up like them.

I rode this vehicle of “ignorance is bliss” regarding finances through my intern year into the first few months of diagnostic radiology. At that time I attended a brief lecture by a financial planner at my residency program.  He gave a typical financial lecture about predicaments that physicians get themselves into by making lifestyle upgrades and not paying down debt. Later that same week was when I found myself staring at my friends' loan repayment plan. Up until that point, I had no trigger to learn about finances, no reason to make personal changes in my spending and saving habits, and no stimulus to build my credit score. In fact up until this point, I knew very little about finances, but I knew that I didn’t want to end up like them. 

Phase 2 - Financial Awakening

Before I launch into what I did next, I want to share details of the situation my friends found themselves in. They were a happy dual board certified practicing physician couple with a newborn. Like many students and residents, they accumulated debt during their extensive training period. Unfortunately, they borrowed more than they needed, did not repay during training, and failed to live below their means during training. 

As soon as their training was complete, they immediately upgraded their lifestyles with new luxury cars. Next came a small mansion, which they financed with a “doctor’s loan”. As I soon discovered, their story is not unusual. Many single and dual physician couples find themselves in similar situations where they are enslaved to their jobs because of extensive debt accumulation and lifestyle upgrades. 

So what did I do when I realized this was not a future I wanted for myself? Learning about finance is not so different than learning about medicine and radiology. Time and repetition are key in learning radiology. And as our attendings tell us, “you must read.” So in addition to radiology reading, I started reading the White Coat Investor (both the book and the blog), and the blogs Tired Superheroine and Frugal Physician. Pretty soon, I went from being a novice on finances to becoming pretty financially literate, based purely on repetition from regular reading and learning. Within a year, I accomplished the following:

  • built my credit score to “excellent”
  • invested 50% of my earnings in a savings account
  • paid off all my student loan interest
  • purchased disability insurance
  • established a Roth IRA account

Whether you’re a medical student or a resident it’s never too early or too late to take charge of your own finances by empowering yourself through education and living below your means. 

Note: I did not pay a financial advisor! I simply accessed multiple free and widely available resources. The single most important lesson and take-away I learned from this is that whether you’re a medical student or a resident it’s never too early or too late to take charge of your own finances by empowering yourself through education and living below your means. 

Money is not a reason to go into medicine, and it should not be a reason to “stay in medicine." I am so thankful that I took the steps early in my training and career to invest in learning about finances, and I think the benefits are countless. Ask yourself, do you want to be chained to your debt for the rest of your life? Do you want to be a slave to your job, or do you want to have a say in how long and how much you work down the road? Financial empowerment is your key to the right answer. 

And now for a personal story (of regret and redemption): 

I’ve already admitted that I wasn’t a financially empowered medical student. When I got married (while in medical school), this state of ignorance did not magically disappear.  Rather, it was exposed through expected arguments that couples have over finances. I was very uncomfortable discussing finances with my husband because I was financially illiterate.  Somewhere inside myself I knew that my spending habits were poor, and I felt vulnerable and disempowered when the discussion inevitably came up. 

This lasted for quite some time, until I decided to take the initiative to become financially literate. Fortunately for myself and our relationship, things took a turn for the better. Over half a decade into my marriage, my husband and I can speak much more comfortably about finances because we’re now on the same page regarding our financial values and goals.  We compliment each other when one or both of us has achieved a financial goal. We both agree that the best route to happiness in our lives is to live below our means and share our wealth with those in need. Financial education has benefits that extend beyond just the numbers, it can ultimately make you, your family, and those around you much happier and content with life.