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Upcoming Med Student with three kids a wife and lots of current debt

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  • Avatar Saucy7 
    Participant
    Status: Student
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    Joined: 11/02/2018
    medical school scholarship sponsor

    I haven’t really thought of that. So would we take out loans to cover cost of living to make ends meet or just scrape by with a $0 income and government subsidies? Also how would we qualify for that since our tax information would show a close to $100k income for 2018. Would there be a process to prove $0 income to get the housing assistance and WIC etc? She makes $44k a year currently and that’s where we get our insurance from but she would LOVE to stay home if we can make it work and not break the bank. That being said, if the daycare wasn’t an issue money wise as in once the kids reach the free pre K age wouldn’t it make sense to have her work at that point cause $44k income is better than whatever the government aid adds up to?

    #162221 Reply
    Avatar Kamban 
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    Status: Physician
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    Joined: 08/01/2016

    Basically I would only have to pay for one year of school at $43k tuition (not including fees etc) but then would go into a primary care specialty listed and the payback requires me to stay in my state for at least 3 years and work in general primary care before doing any fellowships etc.

    Click to expand…

    One option would be to do internal medicine residency before going to primary care for 3 years. You save $50K in tuition x 2 years, save another 3rd year 50K which would have occurred in other schools and make $200K in the year saved, working as an attending.

    The three years would go by quickly and you can decide on which fellowship you want to do. If your scores are good then there should be no reason why you should not get a fellowship. With 3 kids, and starting out with debt before medical school this is an attractive way to help you get to a debt free life. Life is all about choices and there is no absolute best choice.

     

    #162234 Reply
    Liked by Tim
    Avatar WuzUpDoc 
    Participant
    Status: Spouse
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    Joined: 11/03/2018

    Saucy7, it’s something to look in to. For Georgia, a family of 5 must have a monthly gross income of less than $3,078 and less than ~2,500 in savings to qualify for food stamps. Each program has different limits so you have to figure it out for your state/area. If you have a substantial change in income and can provide documentation there can be exceptions, as long as your not holding 100k in your bank account. They don’t look kindly on that while applying for food stamps 😉 Even if you can qualify for one program it helps. Of course anytime she can work that’s always a bonus, even part time. Just anther avenue to look into!

    #162246 Reply
    Avatar Tim 
    Participant
    Status: Accountant
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    Earnest refinancing bonus

    Do you really know enough about PCP as a practice?

    “I realized during my outpatient family practice and outpatient peds rotations during 3rd year of med school that those levels of pain existed and ruled out primary care then and there. I don’t know how you could spend a week in a PCP’s office and not realize that that kind of stuff is a large part of the workday. “

    Shadowing a full week, morning until quit, might be preferable to a decision without sufficient information.

    #162328 Reply
    Avatar Saucy7 
    Participant
    Status: Student
    Posts: 14
    Joined: 11/02/2018

    Been a little while since I first posted and now I have a similar yet kind of separate question about how to best navigate current debt as an incoming M1 this fall.

    Our house is under contract and will close in 3 weeks. We will walk away with $24k in net profit from the sale and plan to put $20k towards our current $47k of credit card debt saving the remaining $4k to help cover costs to rent a new home in the city we move to for school. We will then have another $10k saved by end of June to put towards this amount from living rent free with in-laws. So that puts us with about $17k of CC debt leftover. I have a profit sharing plan with my current job with a $6k value held in a TD Ameritrade account that will become mine end of June when I leave my job and my wife has a 403b with her school system valued at $5k which will be ours at end of May. As mentioned previously on this thread, my wife is working on her masters currently and will work in the new city and earning around $43k a year to start which would jump up to around $50k once masters is complete next spring. My big goal is to pay down the credit cards as much as possible prior to starting school.

    Several big questions.

    1. Should we cash out the profit sharing plan and the 403b rather than rolling them over into IRA’s and use the amount to pay down the CC debt leftover after using home sale proceeds and other savings?

    2. If thats a NO to question 1. Should I take out a student loan under my wife’s graduate school to cover the remainder of the CC debt or do that as a cost of living loan under my name once I start school?

    3. If thats a NO to both 1 and 2, should I just make the minimum payments from my wife’s salary until I’m a resident and have a paycheck again to finish off the CC debt?

    4. If thats a no to all of the above, should I realize I’m probably over analyzing and planning all of this too much? Should I just relax a little and simply get ready to be a hardcore student for the next 6+ years and not worry so much about how the finances will work themselves out?

    Bonus Q: What is the best strategy for our current student loans? Forget about em completely, defer mine and make minimums on hers? We may be able to get hers taken care of with a Title 1 teaching program which she only needs two more years of working for a title 1 school to qualify but are not sure where she will get hired in the new city.

     

    Thanks for the replies and help with so many questions!

    #189794 Reply
    Avatar hightower 
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    Status: Physician
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    Joined: 12/07/2016

    I think you need to save a significant emergency fund to help prevent any further credit card use.  You guys have a major spending problem.  I’m not being judgemental because I’ve been in your shoes (minus the 3 kids) so I can understand how easy it is to get in over your head in debt.  But, you need to do everything possible to change your behavior from this point forward.  Having an emergency fund will go a long way to preventing further consumer debt.  Make a pact with yourself and your wife that from this point forward, you will not buy anything you can’t pay cash for.  The emergency fund will serve as back up if something unexpected comes up that you absolutely must pay for.  I would recommend around 10k minimum for a family with 3 kids.  That’s in addition to whatever you need for moving/renting expenses as you relocate.  Anything left over should go towards paying off the balances on your highest interest credit cards.  My fear if you do what you’ve proposed is that you’ll pay off 20k of CC debt now, but then gradually rack up another 20k over the next 3-4 years since you have no savings.

    If you can find a way to refinance that credit card debt into a fixed, low interest loan, that would be smart.

    Other than that, shift your focus to doing really well in medschool and not worry too much about anything else.

    #189830 Reply
    Liked by Saucy7
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
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    Joined: 05/13/2011

    Hi everyone. I’m a 28 year old pre med and have been accepted to a private MD program in my home state and will be attending there next fall. I am married with three young children ages 4, 2.5, and 8 months.

    I currently work as a healthcare professional and my wife is an educator our combined income is just shy of $100k currently. We own a home but have significant debt including credit cards, undergraduate loans, and small car loans. Our debt load is upwards of $100k combined not including the mortgage.

    We plan to sell the home as the school I will attend is in a different city and we expect, based on my own preliminary analysis and local comps, to walk away with a profit in the range of $35-$50k which will go towards the credit card debt and should eliminate that completely if all goes according to plan. Even if we still have some debt remaining we will finance that so its not such high interest. We plan to rent while in school and residency. My wife plans to work during and after my schooling and residency training and so we will have a small income (teacher salary) but that should help significantly over taking more loans.

    My question really regards opportunities to finance my education. The school i will be attending has an accelerated program that is 3 years and has a “guaranteed” residency program outside of the match in the same city as the school but only for general Internal or Family medicine. The last 2 years are tuition free and as stated before there is no fourth year. Basically I would only have to pay for one year of school at $43k tuition (not including fees etc) but then would go into a primary care specialty listed and the payback requires me to stay in my state for at least 3 years and work in general primary care before doing any fellowships etc.

    I am not sure what type of medicine I want to practice just yet but am very interested in this program for the shorter duration and financial consideration given my current life and family situation. However, I have spent significant time in the ED as a scribe and a technician prior to working in my current position in pathology as an assistant. I have considered going into Emergency Medicine but that would require the typical 4 full years of school leading me to upwards of $300k in debt from school and then the time to pay it all off.

    What recommendations would you have for me as I navigate the time prior to beginning school and making a specialty choice? I know that Family Medicine can do a fellowship in Emergency Medicine and practice in smaller hospitals so that may be an option down the road to take the scholarship but I want to make the most informed decision that sets my family and I up for success and not failure in our future.

     

    Thanks!

    Click to expand…

    In case forum folks are wondering how some people end up owing $600K in student loans, this is how it begins.

    What can you do? You can use your advantages and minimize the effects of your disadvantages.

    Your advantages?

    • A spouse that can work while you’re in school.
    • You can work part-time while in school (it sounds like you’re a nurse or medic or something.)
    • The kids are young and won’t care as much if they’re living in a tiny place.
    • You could only be in school 3 years if you go into primary care
    • Super cheap school if you go into primary care
    • Interest in a lucrative specialty.

    You also have some disadvantages:

    • Large family for a medical student
    • Bad spending/debt habits that will need to be changed
    • Relatively late start.

     

    But the advice is the same for you as for every medical student. Make sure this is really what you want to do. Choose the cheapest school you can get into. Minimize your debt. Avoid credit cards. If you are equally interested in two specialties, pick the one that pays the most etc.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #189832 Reply
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2287
    Joined: 05/01/2017

    Missed this thread first time through.

    Man I would have advised OP to go PA.

    I have a really hard time thinking it’s a good idea to lock into the primary care with the alternative being a pile of debt that will hit right as you need to start thinking about college for 3 kids.

    I admire the OP for keeping his (her?) head above water, this sounds stressful. I do think having 3 kids limits your options quite a bit.

    I cannot stress enough that in 2019 if your eventual goal is to practice emergency medicine you need to do an EM residency not FP and try to get into one of the limited # of EM fellowships that still don’t confer board certification. Those fellowships aren’t going to get you ready to do what you need to do to be a good EP.

    I worry that the next post from the OP could be “I fell in love with [insert non-PC field here] and now I’m trying to figure out how best to tackle my $400k in debt, we also hope to buy a home in [insert HCOLA] in the next 2 years.” Sorry I know that’s a little cynical.

    #189843 Reply
    Avatar Saucy7 
    Participant
    Status: Student
    Posts: 14
    Joined: 11/02/2018

    Thanks for the responses. The CC debt is sadly from taking some bad advice (from a physician no less) to pay for two years of night school and all of my application fees and travel expenses for interviews with credit cards. Yes I applied to 50 schools and traveled to 7 interviews using credit cards. $38k of that total is from my overall career change and the other…well yes I overspent and then had my third child. Mistakes are in the past and can’t change that now. We’ve already cut up all of the cards and have taken a Dave Ramsey course. Question is how do we actually go forward with a Dave Ramsey lifestyle going into Med school knowing I’ll have to rack up significant more student debt to pay for tuition etc. If I put most of our proceeds from the sale of the house towards savings and not towards the debt I’m not sure I would be able to get a lower interest loan to pay them other than like I said before taking out a cost of living student loan this fall and using that to cover them.

    In regards to actually choosing a specialty, I at least already know there’s no chance I could NOT do the program and then still go into primary care. The costs wouldn’t make sense. So big picture I’m pretty sure I’m leaning towards not doing the accelerated program and going straight EM unless something really changes my mind like Rads or anesthesia later on down the road. But for now I’m just trying to navigate getting started first semester with the current debt load I have.

    Would it be wise to pay off half of the CC debt before I start and still save up a nice emergency fund? Then just deal with paying off the cards later on with either a consolidation loan or a cost of living student loan?

    #189863 Reply
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2287
    Joined: 05/01/2017

    We’ve already cut up all of the cards and have taken a Dave Ramsey course. Question is how do we actually go forward with a Dave Ramsey lifestyle going into Med school knowing I’ll have to rack up significant more student debt to pay for tuition etc.

    Click to expand…

    Dude you are so far outside the Ramsey scene I would quit talking about it.

    The only Ramsey principle that is going to apply to you for the foreseeable future is beans and rice.

    #189865 Reply
    Avatar Saucy7 
    Participant
    Status: Student
    Posts: 14
    Joined: 11/02/2018

    Good point good point. At least my kids know what that tastes like already

    #189869 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 2629
    Joined: 09/18/2018

    “The CC debt is sadly from taking some bad advice (from a physician no less) to pay for….”

    No offense, seems to be a little deflection going down. I am sure the physician would have been happy to discuss how to pay for the purchases.
    1) Clean up the credit card debt.
    2) Don’t sign up for a program just to finance med school. Cheap school bill or choosing training is not how to become a contented physician.
    3) Choose the cheapest path to the highest paying position that fulfills your career ambitions.
    4) No more loans except med school.
    5) In case of emergencies, “beans and rice” can be alternated with “rice and beans”.

    You won’t let your kids starve. Don’t live poor, live dirt poor! Your kids won’t know the difference. Moonlight your vacation time and whatever your wife can do as well. You and your wife have a 4 year challenge to get through. Back to the CC debt and emergency funds. You can’t afford emergency funds with CC debt.

    Some how some way kill the Cc debt and get to your desired physician job as soon as you can.

    #189874 Reply
    Liked by Saucy7
    Avatar Saucy7 
    Participant
    Status: Student
    Posts: 14
    Joined: 11/02/2018

    Tim, you’re right it was a bit of a deflection. No one forced me to spend that money that’s all on me. I like the advice you posted, helpful. I feel like a paranoid overly analytic pre-Med which I guess is normal right?

    #189878 Reply
    Avatar LIFO 
    Participant
    Status: Physician
    Posts: 129
    Joined: 01/27/2018

    For you:

    – Cash out retirement accounts and pay down credit card debt.   This is counter to almost all advice out there but I think its the right move because: you stand no chance of improving your income prospects over the next 4 years and your wife’s income will need to go towards managing a family of 5.  Cash out the accounts and pay down the high interest credit card.

    – With payment’s you described: 47k – 20k – 10k – 11k = ~6k in remaining CC debt.  Do not roll this into student loan debt – cannot be discharged in the case of personal bankruptcy.  Roll it into a 0% APR teaser rate credit card and pay it down over the next 12-18 months.  If that is not possible, get personal loan (usually at a much more advantageous interest rate than a credit card).  Then cut up the credit card.  The temptation will be too great.

    – As someone has said before, you want to exist on paper as financially destitute (you are).  Look into every single available government program and see what you need to use it.  Luckily, you sound like you will be going to med school in a LCOL area. This is going to be a savior for you.

    – What kind of family resources do you have?  Family can help in a few ways.  They could hold your emergency fund for you (if you trust them). Or they could be your emergency fund if there are financial resources there.  I had a few classmates who had extended families chipping in to take care of them.  Interestingly, these were usually first generation immigrant families.  I found it inspiring how these families pooled resources to help.

    The primary lesson here is to simplify.  You are going to be insanely busy.  You are going to have a huge amount of stress.  Going to class for four years while your family struggles is going to wear on your conscience.  You do not want additional financial burdens.  You want a straight forward plan that involves living modestly but sustainably.  When it comes time to pick your specialty, it will not be because you’re taking a shortcut back to earning money but because you love the field.

    #189882 Reply
    Avatar adventure 
    Participant
    Status: Spouse
    Posts: 1154
    Joined: 10/24/2016

    I’d also say this, both for your financial life, and for your medical education.

    You won’t/can’t get it all right overnight. Take 1 step at a time. If that’s $1,000 against CC debt today, then great. Tomororow brings a new oppournity.

     

    Every year when I do the end of year “net worth” calculation, I have a tab in my spreadsheet for financial goals.

    (also, tell your wife thanks for putting up with you through this… be a spouse can stink, so say extra thanks).

    #190795 Reply

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