A $80,000 wedding sends the fourth-year student spiraling downward

By Bill Jackson May 28, 2023 15 mins read 174 Views

By Josh Katzowitz, WCI Content Director

Need to get caught up on the first two parts of our From Fourth Year to the Real World series? Here’s part 1 which introduces the ones we follow and part 2 which tells the tale of them transitioning from medical school to residency.

In the months before their friends and family joined together to raise a toast in appreciation and optimism, Ariel was super stressed about the party that was to celebrate the marriage between her and Danny.

It was her intern year, so her medical training was already intense and sometimes overwhelming, and the couple owe hundreds of thousands of dollars in combined student loan debt. Ariel’s father had agreed to pay for their April 2023 wedding celebration, but she was mostly the one to plan it and to try to keep it within the $80,000 budget.

Ariel felt herself in a downward spiral, caused by the stress of the party, the steep learning curve of her intern year, and the guilt that her retired father was the one paying the bills.

“It was horrible,” Ariel said. “The crux of the problem was the financial stress on my dad. Knowing he could handle it but still feeling bad and burdening him with such a large amount of money in such a short amount of time. I went to therapy every week in that two- or three-month time frame.”

Growing up, Ariel didn’t care about having such a grand wedding, but when her wealthy father a year earlier had given her a choice between him paying off the remainder of her medical school loans (about $90,000 worth) or an extravagant wedding, she chose the latter. In the leadup to it, she began having doubts.

“I thought it was such a waste of money,” she said. “If he had paid for school, even if it was $20,000-$30,000 more, I would have been fine with it.”

Ava and Patrick also had separate awakenings this year. In the month leading up to her intern year in 2022, Ava, even with a new job and impending imposter syndrome on the horizon, was calm. You could have even described her as “chill.” A year later, Ava can’t believe how naïve she had been.

Meanwhile, a year ago, Patrick’s wife had just welcomed their third child into the family, and with an enormous amount of student loan debt, a new house in a new part of the country, and a $14,000 IRS refund check that seemed to be lost in the mail, his life was full of stress—and this was even before he started his new job. Now, even with a fourth child on the way, Patrick has never been more comfortable with his financial standing and what he sees as his family’s future.

In the time since WCI last caught up with the four medical-students-turned-interns, they’ve all made incredible strides in their lives, in their careers, and in their finances. Their attitudes, though, run the gamut from unprecedented comfort to unyielding burnout. For all of these interns, the last year has been filled with bumps and bruises, and yet, all of them have survived their first year of residency intact. They can all smile about it now.

from fourth year to the real world

The First Year of Residency

In February 2022, we started a new series called From Fourth Year to the Real World where I write about a quartet of graduating medical students who have begun their residencies.

Since they’re completely transparent with how much they owe and how much they make—and with how they’re mapping out their financial futures—we aren’t using their real names. We check in with these newly minted doctors occasionally, and today, they’re reminiscing on their intern years and how they utilized their new resident’s salaries while, in their own words, they began learning how to adult.

Here’s a quick introduction to the ones we follow:

Ariel and Danny: This newly married couple owe close to $400,000 in student loans, and they’ve just officially joined their lives (if not their financial accounts) together in matrimony. They earn about $100,000 together, and they’ve come through a stressful year while maintaining their individuality.
Ava: For the first time in her life, Ava made a solid salary (she earned $60,000 as an intern, and that will bump up to $65,000 in her second year), but she’s learned plenty about herself in the past 12 months. She’s not a big spender, and the new money was nice, particularly since she doesn't have any student loan debt. But she also nearly burned herself out during her intern year.
Patrick: He won’t become an attending until he’s in his mid-30s, and Patrick owes nearly $500,000 in medical school loans. Patrick will soon be a father of four boys, and he juggles his parental responsibilities with his wife, Brittany, who makes more money than him as a nurse.

Ariel and Danny Bonded Together While Maintaining Some Separation

There’s little doubt that Ariel and Danny are comfortable with their new financial status. She’s enjoying her annual pass to one of the country’s top-notch amusement parks, and Danny bought season tickets to the local major college football program. They sit together on the couch of their $1,900-per-month apartment on this day, and they look at ease. They have jobs. They have friends. They can do what they want when they want because they have money and because they’re not currently having to pay off student loan debt.

They’re married, so they’re bonded together. But they’ve maintained separate accounts. No joint checking, no joint savings, no joint brokerage account. One pays for groceries, and the other reimburses them through Zelle.

There have been discussions about possibly opening an account to which they both have access, especially now that they received $13,000 in wedding gifts (at the moment, that total is in Ariel’s account). But they eat separate dinners—Ariel will make a big batch of chicken that she then can use for lunch over the next few days; Danny is more content with a ground beef offering that he might scarf down all at once. And their money is isolated as well.

“Having checks with the same name, that would be nice,” Danny thought aloud.

Said Ariel: “My aunts and uncles think it’s strange. But we have different habits. I’m not bothered by his. He’s not bothered by mine. We make the same amount of money. We just don’t need to put it in the same pile.”

Maybe the decision to keep their finances separate is generational. Born in the mid-1990s, they’re among the youngest millennials, and perhaps that generation is more apt to remain financially independent from their spouse. Or maybe it has something to do with how they were raised.

Danny’s father was a truck driver—he’s still working in his mid-60s on overnight shifts—and his mom was a stay-at-home spouse before finding work as a grocery store cashier. His family didn’t have wealth. Danny worked while he was in college, and he lived at home to save money. He comes from a blue-collar upbringing.
Ariel’s father, meanwhile, was rich.

Danny made it clear before they were married that his student loan debt was his alone. He didn’t want Ariel’s money (or, indirectly, her father’s wealth) to pay off what he owed. Even though they both make the same amount of money as residents (together, they earned $98,000 as interns), they are simply more comfortable with this setup.

How and when to pay off those student loans is still a question. Thanks to the federal government’s student loan holiday and the frozen interest rates, Danny has been making $0 payments. When student loan payments resume, potentially later in 2023, he figures he’ll pay about $370 per month. He’s considering trying for Public Service Loan Forgiveness. It might not be worth it for Ariel since she’s only in a three-year residency and might not want to work for the government or a nonprofit. But Danny’s residency is a year longer, and he might add on a fellowship that could take him 50%-60% of the way toward PSLF and getting his loans forgiven 10 years after he graduates from medical school.

Otherwise, the two are secure. Ariel is budgeting (and up until the wedding, she was actually sticking with it), but they’re not aggressively saving. They’re contributing to their 401(a) retirement plans—unfortunately, they’re not getting a match from their employer—and they’re contemplating opening Roth IRAs.

“I have a cushion now,” Danny said. “If anything comes up, we can afford it. If the car goes out, we can afford it.”

“And we have that $13,000,” Ariel reminded.

The two have newfound financial freedom, and they don’t have to answer to anybody (not even each other). They’re joined together in matrimony, and they have separate accounts. They’ve worked hard, and they’re not necessarily looking to skimp.

“I hear all the attendings say that we’re going to be a two-physician household,” Ariel said. “It’s like, ‘Let’s just spend the money now.’”

In a Better Spot Than Ever Before

Spending money now? Yes, Patrick knows a little something about that.

Though Patrick and his wife Brittany have maintained an emergency fund of at least $5,000 in his first year of residency, the costs continue to get more intense. Patrick grew up in a household that was always worried about money (he heard his father vomiting from stress in the middle of the night, and if he would have asked his dad for a snack at a gas station, “there was no way in hell that was going to happen”).

from fourth year to real world

But now, he can realistically say that he’s in a more comfortable financial spot than ever before.

Patrick earned $58,500 last year (that’ll increase to $64,000 for second year), and—thanks to her full-time salary, her signing bonus, and her moving stipend—Brittany made about six figures at her nursing job in the past year. Yes, their student loan debt of $460,000 is still sitting there untouched, but Patrick hasn’t felt pinched by paying their bills and splurging on the occasional vacation.

As he’s talking, his second-oldest child is playing with the remote control to the ceiling fan, popping his head in and out of view of the computer’s camera. Patrick is working nights this week, so he’s taking care of his two youngest kids. But childcare is still expensive, and it’s about to cost the family even more when Brittany has their fourth child and transitions to part-time work in the next several months.

Their oldest child is in kindergarten, and though there’s a childcare center right in their neighborhood, that convenience costs $3,000 per month. They’ve eschewed that and instead pay a babysitter $20 per hour for two of the kids and $25 if she’s watching all three. That costs them $300 per week, but even more stressful is the fact that they’ve already burned through a few babysitters this year until they found the right fit.

Patrick figures he averages fewer than five hours of sleep per night with Brittany getting even less. When she’s on an overnight nursing shift, she gets home at about 8am, falls asleep by 9, and then awakens at 2pm to pick up the oldest from kindergarten.

Stress, exhaustion, and burnout? Yes, Patrick and Brittany know a little something about that.

“We are burnt out,” Patrick said. “It’s not sustainable any longer.”

Patrick, though, remains appreciative and optimistic.

Although the family will lose some of her salary when Brittany transitions to part-time work, Patrick plans to moonlight as much as possible a year from now when third year begins. If he covers one inpatient unit for the weekend, he can make $2,000. Do that a couple of times per month, and he’s suddenly replaced Brittany’s income (and maybe she can even stop working altogether). Plus, when he’s a third-year, he can arrive at work an hour early and make $160 to see a new patient or $80 to follow up with one who’s already established. He can stay two extra hours after his shift and earn the same money. He can eventually conduct ED admissions while working from home and make $115 per hour through the wonders of telehealth.

“Once third year rolls around, I’d be fine working from 7am to 8pm if I need to 2-3 days a week and do 2-3 weekends a month,” Patrick said. “If my wife is still working, we’d have more than enough money. But it has not been nearly as stressful as I anticipated it would be. We have that surety of a stable income.”

But what about his loans? For now, it’s all in deferment, but he’ll likely try for PSLF eventually. While he’s in residency and a possible fellowship, he figures he’ll end up paying close to $9,000 a year. By the time he can apply for PSLF, he’s hoping about $240,000 would be forgiven.

“It’s not scaring me nearly as bad it was before,” he said. “Before, it was this huge number; how can I attack it? But once you get looking at the attending salaries, you realize that as long as I don’t upgrade my life extravagantly, I could pay this off pretty reasonably within 5-10 years. I’ll finish residency at 36, so I’d be in my 40s when I pay them off. I’d probably be getting greedy; I’d want a nicer house and a Tesla. But it’s those extravagant wants that you need to check.”

Growing up, his parents worried about where the next paycheck was coming from, and no matter how hard they worked, they didn’t have much earning potential. They didn't have much room to breathe. Patrick has a different mindset.

No. 1, he’s not scared of intense labor. In college, he worked at a moving company, and sometimes he put in 80-90 hours per week of schlepping furniture around. No. 2, he knows that in a few years, he’ll be earning hundreds of thousands of dollars.

That’s why his future is so freeing.

“We still have to exercise some restraint,” Patrick said. “There are things we want that we’re not getting right now. But that’s different than saying, ‘Shoot, the credit card bill is running up. We have to pay for this soon, but we don’t have the money.’ That’s a different feeling than us saying, ‘Oh, we can’t buy a hot tub yet.’”

Patrick and Brittany have never been at a point where they have this little amount of financial stress. But a new baby is coming. The mortgage on their 1,800-square foot house still needs to be paid. Diapers and baby wipes could be as much as $200 a month. Baby formula is astronomical.

Yes, Patrick, who knows residents who can earn up to $200,000 of extra income, has grand plans to moonlight as much as possible by the fall of 2024. But the specter of true physician burnout is never far away; it can still pop in and out of view before you realize what's happening. Patrick still needs to figure out a way to make space in his life to relax and spend time with his growing family. He still needs to figure out a way to breathe.

What Ava Didn’t Know About Life and Medicine

When looking back at her first year of residency, Ava takes in a deep breath, reminisces about her mindset only 11 months earlier, and exhales in wonder at how little she knew about what was to happen.

Ava was supposed to move into a newly built apartment only a few days before she started her first rotation of intern year. She was fine with that. But the move-in date kept getting pushed back, and eventually, she realized that she was going to be homeless unless she acted soon. With a week to go before she started her neuro-radiology rotation, she began frantically searching for another apartment to sublet.

The stress of her intern year never subsided.

“I was,” Ava says now, “a little bit naïve.”

Ava grew up as a world traveler, living in wealthy countries like Oman and the UAE and in poorer areas in Bolivia and Venezuela. Her family avoided a lifestyle of big spending and they saved their money, habits that have followed Ava into her mid-20s. She’s in a better financial position than most, because thanks to a half-scholarship to medical school and her parents’ willingness to cover the rest of her tuition and living expenses, she has no student loan debt.

Her parents didn’t teach her much about money, but she is still utilizing their indirect lessons on saving. She’s putting 5% of her salary into her Roth 401(k), and she gets a match from her employer. One paycheck a month goes toward paying her rent. The other is hers to spend and save. She likes seeing at least $5,000 in her checking account, so even though she might occasionally buy a $300 dress or spend $200 on a haircut, she’s still driving the same 2016 Volkswagen she’s owned since college. She’s also never had to ask her parents for money, and for that, she feels proud.

Those relatively sparse spending habits allowed her to buy a $2,000 plane ticket so she could spend a month in her native Argentina in 2022. She’s going to Mexico on vacation soon, and when we spoke, she was in the process of planning a trip to Portugal —after her $1,600 plane ticket, she’s budgeted $2,000 for two weeks as Ava and two of her pals drive the Iberian peninsula coast while avoiding fancy hotels and dinners.

“I’m not a big spender,” she said. “I’ve never had a big budget to spend. And if I’m working 12 hours a day on six-day work weeks, I don’t have time. That’s been helpful, too.”

Well, that intense workflow has been helpful in some ways. In other ways, though, it’s forced Ava to reckon with her work-life balance and how to navigate her intern-year burnout.

“I didn’t realize how sheltered I was in medical school,” she said. “Medicine is really glorified in medical school, and you start residency and you think, ‘This isn’t as magical as I thought it was going to be.’”

This year, Ava has learned about the failures of the healthcare system; how some people don’t have access to care; the insurance costs of medicine; and how difficult it is to find, build, and sustain relationships when you’re not working. She learned a $3,000 mistake when she went to an urgent care this year for help with a gastric ulcer. She was shucked into the real world without an apartment, where she’d work long hours and then collapse into bed after she got home. Her one-year relationship with a boyfriend fell apart.

At the same time, she likes residency more than she enjoyed medical school. She’s made connections with patients. She’s been motivated by them. She’s felt rewarded by them.

“You have this incredible opportunity to be by people’s side at their most vulnerable,” Ava said. “It’s incredibly rewarding. That’s what has kept me motivated.”

Like all the fourth years who have now spent a year in the real world, Ava has grown as a doctor and learned more about herself as a person. She and Patrick battled through burnout. Ariel sought weekly therapy. Danny had to reckon with the economic help he received from his father-in-law.

They’ve all lived to talk about it, and their transformation as doctors and as people since the last time we caught up with them is striking.

They’ve got money in the bank. They can enjoy their lives away from work, or they’re trying their best to learn how. They’re appreciative and optimistic, and they’re grateful that the journey —and all of the unforeseen barriers that are sure to keep coming their way —will continue.

Make sure to get caught up on part 1 and part 2 of our From Fourth Year to the Real World series.

[Editor's Note: For comments, complaints, suggestions, or plaudits, email Josh Katzowitz at [email protected].]

The post From Fourth Year to the Real World: An $80,000 Wedding Causes a Downward Spiral appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.

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By: Josh Katzowitz
Title: From Fourth Year to the Real World: An $80,000 Wedding Causes a Downward Spiral
Sourced From: www.whitecoatinvestor.com/from-fourth-year-to-the-real-world-part-3/
Published Date: Sun, 21 May 2023 06:30:54 +0000

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