11 Best Financial Tips for Pre-Med and Medical Students

Getting into medical school is a huge accomplishment.  The journey to becoming a qualified physician is arduous.  Despite all your effort to acquire the knowledge necessary to be a great doctor, managing your finances is equally as important.  There are many stages to a doctor’s education.  These include medical education, internship training, residency, fellowship (for some), and attending-hood.  Each and every one of these stages has its own academic challenges.  I would argue that each of these stages simultaneously has its own financial challenges.  How you manage your personal finances throughout your medical education, training, and beyond will have a significant impact on your financial footing later in life.  So, the best place to start…is at the beginning!  Here are the 11 best financial tips for pre-med and medical students!

1. Start with zero debt

Before we begin to address the importance of your financial behaviors in medical school, we need to make sure you are setup for success beforehand.  Number one on our list of the 11 best financial tips for pre-med and medical students is to start with zero debt.  Do everything in your power to avoid any and all debt prior to starting medical school.

Statistically, a majority of graduating medical students will exit their education with some form of student debt.  Even still, some have undergraduate loans prior to starting medical school.  The best way to set yourself up for success following medical school is to limit the amount of debt accrued at all points previously. 

As with assets and liabilities, interest is more impactful the longer you hold onto that money.  For those with undergraduate educational debt or credit card debt, this will continue to hinder your ability to get ahead.  It may not see like much now, but given that medical education can last almost a decade, that is plenty of time for interest to grow exponentially.  Do yourself a favor and start off on the right foot.  Avoid debt prior to medical school at all costs (if possible).

2. Study hard

The second tip on our list of the 11 best financial tips for pre-med and medical students is to study like your life depends on it!  Now, I understand this may seem a bit simplistic.  However, medical school is expensive.  For those having to accumulate debt to support their medical aspirations, it is a steep price to pay.  You know what is more expensive?  Having to repeat a year of schooling, thus taking out more debt.  You know what is even more expensive than that?  Having to give up on your dreams of becoming a physician after you have already accumulated multiple years’ worth of medical school debt. 

The only way that accruing $200,000 worth of student debt is worth it, is if you reach your 6-figure income potential as quickly as possible.  For the few individuals who unfortunately do not complete their educational journey, finding a way to pay off their debt can be almost impossible.  So, I say this with the utmost sincerity…study hard.  Study like millions of dollars depends on it…because it does!

3. Go to the most cost-effective medical school

OK, now that we have discussed debt avoidance and work ethic, let’s talk about how to view medical school as a vehicle.  There is a precedent set that you should always go to the most competitive school you can.  I challenge this recommendation.  As medical school tuition continues to rise, financially speaking, it can be more prudent to view medical schools as a means to an end.  Your goal is to be a well educated physician who practices at or above the ‘standard of care.’  There are literally hundreds of schools that can offer you this.  The vast majority of medical programs in the United States can (in my opinion).  Knowing this, it is important to understand that you are likely to be just as well-educated and successful graduating from an in-state school as you are of an out-of-state program. 

This is important because an in-state institution may cost you far less.  If you are looking to form sound financial footing, look for a school that can simultaneously provide you an appropriate education while limiting the amount of debt you accumulate.  Many programs offer this.  Do not be blinded by the pursuit of the most prestigious program.  Overwhelmingly, most M.D. and D.O. programs can turn you into a competent and confident doctor.  It is your job to discover who can do it for the lowest cost while still offering a quality education. 

4. Get as many scholarships as possible

I alluded to this in the previous tip, but getting financial aid through scholarships can be critical to avoiding excess student debt.  It is astounding how much money is out there if you only ask.  Academic scholarships are frequently advertised; however, scholarships go well beyond achieving a certain grade point average (GPA).  There are philanthropic scholarships, military scholarships, minority scholarships, etc.  No matter where you interview for medical school, make sure to ask extensively about what opportunities are available to offset the cost of education.  For individuals already in medical school, this tip is just as applicable.  It is never too late to ask your financial resource officer what scholarships are available.  Take the time to learn about all avenues available to lighten your financial burden.  The less you have to rely on student loans, the better. 

5. Apply to as many programs as your budget allows

Equally as important as studying hard, is making sure you have options for consideration.  Variety is the spice of life after all.  More importantly, the more you apply to medical programs or residencies, the higher your chances of acceptance (or matching). 

It can be expensive to submit your application to multiple programs.  Not getting into medical school, thus delaying your doctor salary a year, can cost you literally hundreds of thousands of dollars.  Avoid this mistake by casting a large net during application season.  Each and every school will be reviewing a slightly different pool of applicants.  Further, each and every program will have various inclusion or exclusion criteria.  The more programs you apply for, statistically your odds of getting in increase.  Do not hedge on a single program, no matter how badly you wish to go there.  Apply to all the places you could theoretically live for four years.  This way you can minimize the chances of not getting in during your first application season. 

These tips are no different when it comes to the residency match.  For individuals applying to residency through the Match, the more locations you apply for, the higher likelihood you have of matching, and matching into your chosen specialty.  Allow statistics to work in your favor and cast a large net.  Application season is not the time to be frugal.

6. Take out as few loans as possible

Similarly, to the first tip on this list, the 6^th tip of the 11 best financial tips for pre-med and medical students is about minimizing your loan burden in medical school.  Yes, it is imperative that you avoid debt prior to starting your medical education.  However, a majority of medical students will graduate with some form of education debt.  It is imperative that you focus on limiting the amount of debt you accumulate during your medical education too. 

Take me for example.  I was given the worst possible advice when I started my medical education.  “Medical school is stressful enough; you should take out all the loans you can while you are in school so you can live comfortably…money should be the least of your worries.”  That, my friends, was advice I got from family!  To this day, heeding that advice was one of the worst financial decisions I have ever made.  When my wife (also a physician) and I created our original shared budget, we realized that we had a combined medical educational debt of $670,000!  To this day we are still paying this off.  We even paid off $209,000 over the past two years!  This is the colossal debt burden we are still working to eliminate!  Do not be like us, minimize your debt on the front end and you will rid yourself of debt exponentially faster on the back end. 

7. Consider having the military pay for your education

There are great programs in the United States available to pre-medical and medical students through various branches of the military.  The Army, Navy, Air Force, etc. all offer options to pay for your medical education without accruing monetary debt.  A debt is owed, but it comes in the form of time, not money.  Each of these programs will pay for your medical education in full, including a living stipend as well.  However, the tradeoff is that following completion of your medical education, for each year of schooling that the military paid for, you owe them a year of clinical service.

The trade off with these programs is that you have an avenue to avoid debt during your medical education while simultaneously serving your country.  Though you may owe the military four years of clinical employment, these opportunities (for the right individuals) can propel you to earlier financial success.  I say ‘for the right individuals’ because this form of debt avoidance is not for the faint of heart.  You will owe the government four years of your life; likely living and traveling where they tell you.  This can be a great way to see the world while gaining clinical experience.  For individuals with families and kids, it can offer some challenges.  Everyone should at least consider the option. 

8. Develop great financial habits now

It is never too early to develop healthy financial habits.  I have been writing and posting about this for years now.  If you are applying for medical school, or already in medical school, then you are clearly a bright individual.  If you can comprehend gross anatomy, biochemistry, histopathology…then you can easily acquire the knowledge and skills necessary to reach financial success.  Here is the catch, there will be no formal financial education in medical school.  This is something you will have to earn yourself.  It is simple, but not easy.  However, there are a handful of great ways to get started. 

First off, I recommend you continue to follow The Motivated M.D.!  Here, we work tirelessly to bring your regular personal finance content that is applicable to you.  If you like what you read on this site, then please follow us on social media and subscribe to our newsletter down below.  Just by signing up you will get our FREE excel budgeting tool, as well as regular content direct to your email.  Our free budgeting tool can help you create an honest and transparent budget while you journey through medical school.  Secondly, I have compiled a list of 5 physician finance books I recommend.  These are easily digestible reads for any medical or pre-medical student.  Also, I have a prior post on the best physician finance blogs as well as the best personal finance blogs.  Each of the websites listed here offer great supplemental content as you develop your good financial habits! 

9. Understand the cost of location

As you apply to various medical schools or residencies, understand that there will be wide variability in your living expenses based on geographic location.  I personally think this is overlooked and misunderstood when individuals apply to medical school and residency.  Cost of living (COL) can have a huge impact on your annual expenses.  As you accumulate interviews at various locations across the United States, make sure to ask about COL.  Many physicians or students at these various programs can offer insight on living expenses.  Just as important as going to a cost-effective medical school, you should also work to couple that with a low COL area.  If you are a lucky individual who can both go to a low-cost medical program that offers a solid education while simultaneously living in a low COL area, you could potentially save hundreds of thousands of dollars.  Keep this in mind as you interview for medical school and residency. 

10. Educate yourself on loan repayment options

It is never too early to think about how you will pay off the debt you accumulate in medical school.  As I alluded to previously, a majority of graduating medical students will carry some form of educational debt.  There are many various avenues to eliminate your debt after you complete your training.  Your level of training (i.e., internship, residency, fellowship, etc.) will largely dictate what options are available to you.  However, now is a great time to research programs like Public Service Loan Forgiveness (PSLF), as well as private loan refinancing, and many more. 

The vast majority of residency programs are eligible for PSLF, however there are many caveats that must be met to have your loan repayments qualify as a ‘certified payment.’  Further, there are options to refinance your student loans to a lower interest rate, but this will disqualify you from remaining a candidate for PSLF.  Refinancing your student loans is not a decision to be made lightly.  Every individual’s personal financial situation is different and unique to them.  Starting to educate yourself now while understanding what your options are will help you better navigate your debt in the future. 

11. Develop inexpensive and safe outlets for stress relief

The final tip on our list of the 11 best financial tips for pre-med and medical students is to help prevent stress and burnout.  We all need outlets to offload our stress when life gets difficult.  Medical school and residency will periodically get stressful.  This is inevitable.  As you navigate the trials and tribulations of your chosen profession, learning to cope will become a necessary skill.  However, as you develop these skills, I challenge you to do it in inexpensive and safe ways. 

Regular exercise is a great and inexpensive way to let off some steam.  Outings with friends, dinner dates, writing, blogging, etc. are all easy ways to relax.  What you should avoid is developing expensive hobbies like boating or buying cars. These expensive interests can be costly while you accumulate debt.  Work to develop inexpensive and safe interests and habits now so that as your income increases you do not reflexively increase your lifestyle.  This is known as lifestyle creep and it is one of the most common reasons physicians and doctors live paycheck to paycheck.  Work to find inexpensive ways to deal with stress and relax!

Take home points

There you have it, the best financial tips for pre-medical and medical students.  This is not a comprehensive list, but it does work to offer straightforward and practical ways for you to develop strong financial footing as you start your medical journey.  Each chapter in your professional path will have its own unique financial challenges.  For medical and pre-medical students, work to harbor good habits now while minimizing debt as much as possible.  This will help start your long and prosperous career on the right financial foot.  If you want more financial tips, here are the 52 best ways to improve your personal finances! As always…

Stay motivated!

The Motivated M.D.

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