If you don’t know where your money is going, you can’t make it work for you. There is no more important financial advice I could give you as you traverse through medical school. I remember when I received my first loan check at the beginning of medical school, it was by far the most money I ever had in my hand at one time. But even though it has your name on it, it is not your money…it’s the government’s money, and they will want it back sooner than you think. Therefore, the less you borrow the better, and the better you manage your money, the less you will need to borrow.
So how do you get a handle on where your money is going? The free option would be to use http://www.mint.com, which is a subsidiary of Quicken. For those who haven’t heard of this website, you plug in all of your accounts (bank, student loans, car loans, credit cards) directly into the Mint.com interface. They use bank-level encryption to secure your data. Once all of your accounts have been entered, the program then automatically categorizes each purchase that you make, effectively showing you where your money is going. I advise you evaluate one month of your normal spending routine to see how out-of-control your spending is. How much are you spending on fast food? How much on movies? Once you have this information, you can start planning out your current budget and actually stick to it. What I don’t like about Mint.com is that it helps to show you where your money is going, but budget-wise it is weak in preventing you from overspending in a particular category because transactions routinely show up in Mint.com after they have cleared your bank, which can be days after you make the purchase.
More expensive options include Quicken, MoneyWell, and my personal favorite YNAB (You Need a Budget). While YNAB is expensive by most medical student standards ($60), it is the best way I’ve found to not spend more money than you are taking in. The best way to describe YNAB is that its an electronic ledger, which essentially looks at how much you have budgeted for that month, and how much money you actually have. If the money isn’t currently available, YNAB will make it clear that your budget is not balanced yet. I was able to save so much money using YNAB that the $60 cost was covered within a month (for the skeptical, they offer a 34-day trial policy to try out the app at no cost). YNAB works on both PC and Mac platforms and has Android and iOS apps which all sync. Quicken also works on both major computer platforms. Currently, MoneyWell is for Apple computers only.
Whatever you chose, having a solid budget will help you to learn the self-control it takes to not slide deeper and deeper into debt while in medical school. If you budget well, you shouldn’t have to take out additional loans to pay for visiting electives, or textbooks, or a new laptop. We here at the First Aid Team wish you luck on your financial and medical journey.