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Incoming EM Intern married to lawyer, is my strategy appropriate?

Home Student Loan Management Incoming EM Intern married to lawyer, is my strategy appropriate?

  • Avatar Budgetmaestra 
    Participant
    Status: Attorney
    Posts: 41
    Joined: 04/30/2019

    Lawyer/Em physician couple here. Our debts were around $250k when my husband entered residency. My salary was higher, but I was also unemployed for a year after we relocated for residency.

    This is what I would do:

    1). Use $35k to pay off private loans. $5k is two months of expenses for you and you are dual income. You need a small emergency fund but keeping it small is key to put some pressure on you.

    2). Look into a refi of your remaining loans to lower interest rates.

    3). Create a complete budget (bills, groceries, restaurants, entertainment, gifts, car maintenance, gas, fun money, Christmas, vacations, etc). Track in mint and follow it. This means you both have to agree on your vacation, spending on hair appointments, technology, cars etc for he next three years). We lived as a family of 4 off of $3,800/month including daycare for two kids. I’m thinking $2,500-$3,000 is the max for you. Shop insurance rates, cell providers etc. put phone upgrade set on hold. Live off your take home (or preferably less). For example, my husband and I each got $100 per month in our budget to cover things like clothes, lunch or drinks with friends, hair cuts etc. we Grocery shopped at Aldi. My husband kept driving his clunker car until it died as his commute was short. Prioritize.

    4). If you wife has retirement match, have her contribute up to the match. If you are under 30 that is all the retirement savings I’d do now.

    5) snowball your student loans. After paying off the $35k loan you will have about $315k left. At 6.8% you accrue about $21k of interest every year. That is almost $1,700/month. You need to send at least this much to stop interest from growing.

    6). Set a graduation goal: at end of graduation your debt should be no more than $250k. Set part goals for the end of each year of residency.

    7). Sign a lucrative job contract. Pay your $50k signing bonus to the loans. Every cent of it.

    8). Once you start work, give yourself a raise (maybe $1k per month). Max retirement (solo 401k, wife’s 401k), backdoor Roth IRAs, HSAs. Don’t buy new cars, a house etc. snowball everything at debt. Work all the extra shifts you can in your first year. Don’t forget to set aside money for taxes.

    We mostly did the above and paid off all student loan debt in May the year after graduation. So 11 months. With two kids in daycare, a move after graduation from residency, and while owning two houses (not recommended – money suckers).

    Most of this is about you and your wife setting expectations for how the next 4-5 years of your life will play out.

    Avatar EndoRobert 
    Participant
    Posts: 70
    Joined: 01/12/2019

    OP, Budgetmaestra and spouse have the X factor. https://www.whitecoatinvestor.com/the-x-factor/

    Be like them.

    #211217 Reply
    Avatar Dilaudidopenia 
    Participant
    Status: Physician
    Posts: 206
    Joined: 05/22/2016

    If you’re willing to work your a** off at a corporate firm (80 hrs a week and you’re at their beck and call during weekends too), you can totally make 6 figures your first year out.

    #211247 Reply
    Liked by Craigy
    Avatar osteoson56 
    Participant
    Status: Student
    Posts: 21
    Joined: 12/04/2018

    If you’re willing to work your a** off at a corporate firm (80 hrs a week and you’re at their beck and call during weekends too), you can totally make 6 figures your first year out.

    Click to expand…

    That’s exactly what my wife did her first year and a half out and broke 6 figs, was not worth the extra 30ishk IMO. There was barely any maternity leave and just a toxic environment. Now she has great benefits, works half as much, no weekends and much happier.

    #211255 Reply
    Avatar snowcanyon 
    Participant
    Status: Physician
    Posts: 515
    Joined: 10/22/2018

    If you’re willing to work your a** off at a corporate firm (80 hrs a week and you’re at their beck and call during weekends too), you can totally make 6 figures your first year out.

    Click to expand…

    That’s exactly what my wife did her first year and a half out and broke 6 figs, was not worth the extra 30ishk IMO. There was barely any maternity leave and just a toxic environment. Now she has great benefits, works half as much, no weekends and much happier.

    Click to expand…

    That’s definitely a bad corporate gig- lockstep first year associate salary is 190k, now, I believe, plus bonus. Totally not worth it to just break 100k. No weekends is key, as you will learn in your career!

    #211285 Reply
    Liked by Tim
    Avatar Scarftheverb 
    Participant
    Status: Resident
    Posts: 34
    Joined: 01/10/2017

    My spouse did biglaw for 5 or 6 years. Made mid 6 figures by the end but it wasn’t worth it. Probably averaged over 80 hours per week and was on call for clients 24/7/365. Partners made 7 figures but I’d guess less than 10% of new associates made it to partner and their lifestyles weren’t any better than the associates’. Medicine is the better gig by far.

    #211317 Reply
    Avatar ZZZ 
    Participant
    Status: Spouse
    Posts: 700
    Joined: 06/18/2018

    “We want to pay off all of the loans as soon as possible,”

    “My wife took a lower paying job and works half as much”

    Those two statements seem to be discordant.

    #211321 Reply
    Avatar osteoson56 
    Participant
    Status: Student
    Posts: 21
    Joined: 12/04/2018

    “We want to pay off all of the loans as soon as possible,”

    “My wife took a lower paying job and works half as much”

    Those two statements seem to be discordant.

    Click to expand…

    I think we’d rather take a tad longer to pay them off than have our marriage and sanity compromised.

    #211359 Reply
    Liked by FamilyFirst, DCdoc
    Avatar snowcanyon 
    Participant
    Status: Physician
    Posts: 515
    Joined: 10/22/2018

    Sanity is important, but remember you get to work nights, weekends, and holidays for the rest of your working life. Everyone’s relationship is different, but it doesn’t seem unreasonable that the other partner do this for at least a few years with your level of loans. That would make a way bigger difference than the different loan options you are considering.

    #211360 Reply
    Liked by EndoRobert
    Avatar EndoRobert 
    Participant
    Posts: 70
    Joined: 01/12/2019

    “We want to pay off all of the loans as soon as possible,”

    “My wife took a lower paying job and works half as much”

    Those two statements seem to be discordant.

    Click to expand…

    I think we’d rather take a tad longer to pay them off than have our marriage and sanity compromised.

    Click to expand…

    Health and longevity in your career and marriage are vital to your financial success.

    The good news is you’ll be making good money doing EM and training is short so the interest doesn’t have a chance to run for 5-7 years like some.

    That said, you have nearly 400k in loans.  And as budgetmaestra said, 21k/year, or 1/6 of your household income, will be needed to just keep you balance where it is.  If you’re serious about knocking them out in 2-5 years post training you’re gonna be looking to work every extra night, weekend, and holiday you can.

    #211368 Reply
    Liked by Kamban, Tim
    Avatar osteoson56 
    Participant
    Status: Student
    Posts: 21
    Joined: 12/04/2018

    “We want to pay off all of the loans as soon as possible,”

    “My wife took a lower paying job and works half as much”

    Those two statements seem to be discordant.

    Click to expand…

    I think we’d rather take a tad longer to pay them off than have our marriage and sanity compromised.

    Click to expand…

    Health and longevity in your career and marriage are vital to your financial success.

    The good news is you’ll be making good money doing EM and training is short so the interest doesn’t have a chance to run for 5-7 years like some.

    That said, you have nearly 400k in loans.  And as budgetmaestra said, 21k/year, or 1/6 of your household income, will be needed to just keep you balance where it is.  If you’re serious about knocking them out in 2-5 years post training you’re gonna be looking to work every extra night, weekend, and holiday you can.

    Click to expand…

    Wont my interest rate be less than 6.8% if we decide to refinance? That seems pretty high to me..

    #211374 Reply
    SerrateAndDominate SerrateAndDominate 
    Participant
    Status: Physician
    Posts: 487
    Joined: 02/01/2018

    Wont my interest rate be less than 6.8% if we decide to refinance? That seems pretty high to me..

    Click to expand…

    Assuming you can get approved from a private refinancing company, yes. Go ahead and try Laurel Road or SoFi. They offer the programs for trainees where you pay $100/mo. There are links here on WCI where you can get $300 back or so by using his link to start your application.  Take your time to shop the two companies against each other. I found that Laurel Road was quicker to respond and refinanced me down to 3.794% after the 0.25% autopay discount and the 0.25% AMA member discount. I wasn’t an AMA member but I sure paid the $60 to join it when I saw how much I’d save.  That was the first I had heard of the AMA discount so make sure you initiate that conversation with one of their agents on the phone or chat.

     

    Just remember, once you do private refinancing, there is no going back.

    Earn everything.

    #211394 Reply
    Liked by Tim
    Craigy Craigy 
    Participant
    Status: Spouse
    Posts: 2057
    Joined: 09/16/2016

    “We want to pay off all of the loans as soon as possible,”

    “My wife took a lower paying job and works half as much”

    Those two statements seem to be discordant.

    Click to expand…

    Sanity is important, but remember you get to work nights, weekends, and holidays for the rest of your working life. Everyone’s relationship is different, but it doesn’t seem unreasonable that the other partner do this for at least a few years with your level of loans. That would make a way bigger difference than the different loan options you are considering.

    Click to expand…

    Let’s be real, y’all.

    Matt is lucky that his Dr’s wife earns any money at all.  And moreover, that they’ve managed to keep living expenses down to $1,700/mo (including the rent!) when one spouse is a doc and one is attorney.  That’s downright miserly.  At least for now, Matt has hit the doctor’s wife jackpot.  If they can keep their spending anywhere close to that level into attendinghood, they’re going to be financially successful no matter what.

    Sure you can argue it’s a little strange she’s already kicking back so relatively early in her career (and before kids), but in the long run, this is barely going to have an impact.  Let’s say she gets that big girl job and makes $85,000.  First of all, that’s pretty generous.  Second of all, even at their current bracket, she’s only going to be taking home maybe ~65% of the marginal dollars she earns after federal, payroll, and some assumed state.  So she’s busting ass, working 80hrs a week litigating and taking all the garbage projects, week-in-week-out, with zero time off, to bring in an extra ~$14,000 a year.  BFD.  😉

    When they have kids, this math gets even worse.  Do you know how much child care costs?  It’s easily going to exceed that extra income she brings in by being absent from her kids.  But hey, at least she’ll find deep fulfillment in her work verifying that this contract provides reasonable indemnification language, or making sure allstate doesn’t have to pay its policy limits in this covered event, or finding obscure case law that proves the installer doesn’t bear liability for failure of defective sheet piles.  😆

    It’s tough to predict the future, but realistically she’s got a couple of years before kids of potentially making some extra money, maybe $30,000 of extra cash?  Let’s be generous and assume $40,000.  That’s about a tenth of the loan balance, earned over the course of a few years.  Again, BFD.  😉

    Locking in that sweet municipal job with great bennys, and not having to come home to a wife who hates her life (or between the two of their schedules, being able to come home to a wife at all) was easily one of the best decisions they made at this point in their careers.

    LEVEL 1 WCI FORUM MEMBER.

    #211765 Reply
    CM CM 
    Participant
    Status: Physician
    Posts: 1168
    Joined: 01/14/2017
    “Traditional” folks are no less likely to divorce.

    Click to expand…

    What’s the data behind this opinion?

    Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried bags for Cyd Charisse (gracious). Hosted epic company parties after Friday night rehearsals.

    #211930 Reply
    Avatar osteoson56 
    Participant
    Status: Student
    Posts: 21
    Joined: 12/04/2018

    “We want to pay off all of the loans as soon as possible,”

    “My wife took a lower paying job and works half as much”

    Those two statements seem to be discordant.

    Click to expand…

    Sanity is important, but remember you get to work nights, weekends, and holidays for the rest of your working life. Everyone’s relationship is different, but it doesn’t seem unreasonable that the other partner do this for at least a few years with your level of loans. That would make a way bigger difference than the different loan options you are considering.

    Click to expand…

    Let’s be real, y’all.

    Matt is lucky that his Dr’s wife earns any money at all.  And moreover, that they’ve managed to keep living expenses down to $1,700/mo (including the rent!) when one spouse is a doc and one is attorney.  That’s downright miserly.  At least for now, Matt has hit the doctor’s wife jackpot.  If they can keep their spending anywhere close to that level into attendinghood, <span style=”text-decoration: underline;”>they’re going to be financially successful no matter what.</span>

    Sure you can argue it’s a little strange she’s already kicking back so relatively early in her career (and before kids), but in the long run, this is barely going to have an impact.  Let’s say she gets that big girl job and makes $85,000.  First of all, that’s pretty generous.  Second of all, even at their current bracket, she’s only going to be taking home maybe ~65% of the marginal dollars she earns after federal, payroll, and some assumed state.  So she’s busting ass, working 80hrs a week litigating and taking all the garbage projects, week-in-week-out, with zero time off, to bring in an extra ~$14,000 a year.  BFD.  😉

    When they have kids, this math gets even worse.  Do you know how much child care costs?  It’s easily going to exceed that extra income she brings in by being absent from her kids.  But hey, at least she’ll find deep fulfillment in her work verifying that this contract provides reasonable indemnification language, or making sure allstate doesn’t have to pay its policy limits in this covered event, or finding obscure case law that proves the installer doesn’t bear liability for failure of defective sheet piles.  😆

    It’s tough to predict the future, but realistically she’s got a couple of years before kids of potentially making some extra money, maybe $30,000 of extra cash?  Let’s be generous and assume $40,000.  That’s about a tenth of the loan balance, earned over the course of a few years.  Again, BFD.  😉

    Locking in that sweet municipal job with great bennys, and not having to come home to a wife who hates her life (or between the two of their schedules, being able to come home to a wife at all) was easily one of the best decisions they made at this point in their careers.

    Click to expand…

    Wont my interest rate be less than 6.8% if we decide to refinance? That seems pretty high to me..

    Click to expand…

    Assuming you can get approved from a private refinancing company, yes. Go ahead and try Laurel Road or SoFi. They offer the programs for trainees where you pay $100/mo. There are links here on WCI where you can get $300 back or so by using his link to start your application.  Take your time to shop the two companies against each other. I found that Laurel Road was quicker to respond and refinanced me down to 3.794% after the 0.25% autopay discount and the 0.25% AMA member discount. I wasn’t an AMA member but I sure paid the $60 to join it when I saw how much I’d save.  That was the first I had heard of the AMA discount so make sure you initiate that conversation with one of their agents on the phone or chat.

     

    Just remember, once you do private refinancing, there is no going back.

    Click to expand…

    Lawyer/Em physician couple here. Our debts were around $250k when my husband entered residency. My salary was higher, but I was also unemployed for a year after we relocated for residency.

    This is what I would do:

    1). Use $35k to pay off private loans. $5k is two months of expenses for you and you are dual income. You need a small emergency fund but keeping it small is key to put some pressure on you.

    2). Look into a refi of your remaining loans to lower interest rates.

    3). Create a complete budget (bills, groceries, restaurants, entertainment, gifts, car maintenance, gas, fun money, Christmas, vacations, etc). Track in mint and follow it. This means you both have to agree on your vacation, spending on hair appointments, technology, cars etc for he next three years). We lived as a family of 4 off of $3,800/month including daycare for two kids. I’m thinking $2,500-$3,000 is the max for you. Shop insurance rates, cell providers etc. put phone upgrade set on hold. Live off your take home (or preferably less). For example, my husband and I each got $100 per month in our budget to cover things like clothes, lunch or drinks with friends, hair cuts etc. we Grocery shopped at Aldi. My husband kept driving his clunker car until it died as his commute was short. Prioritize.

    4). If you wife has retirement match, have her contribute up to the match. If you are under 30 that is all the retirement savings I’d do now.

    5) snowball your student loans. After paying off the $35k loan you will have about $315k left. At 6.8% you accrue about $21k of interest every year. That is almost $1,700/month. You need to send at least this much to stop interest from growing.

    6). Set a graduation goal: at end of graduation your debt should be no more than $250k. Set part goals for the end of each year of residency.

    7). Sign a lucrative job contract. Pay your $50k signing bonus to the loans. Every cent of it.

    8). Once you start work, give yourself a raise (maybe $1k per month). Max retirement (solo 401k, wife’s 401k), backdoor Roth IRAs, HSAs. Don’t buy new cars, a house etc. snowball everything at debt. Work all the extra shifts you can in your first year. Don’t forget to set aside money for taxes.

    We mostly did the above and paid off all student loan debt in May the year after graduation. So 11 months. With two kids in daycare, a move after graduation from residency, and while owning two houses (not recommended – money suckers).

    Most of this is about you and your wife setting expectations for how the next 4-5 years of your life will play out.

    Click to expand…

    Thank you everyone for being so helpful! My wife and I just payed off our two private loans totaling over $30,000! I could not have done it without her. She has worked so hard over the past few years and in total has helped pay off over $65,000 of our loan debt. It feels so good to not have any private loans and to be in the mindset of paying these off as quickly as possible. Thank you again for all of your support.

     

    – Matt

    #211991 Reply

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