Budgeting Basics: Managing Your Money During the Lean Years

Money may be tight during medical school and residency. That’s why a realistic spending plan (one you can stick to) will be critical to your financial well-being.
woman with a cart at grocery store

Benefits of Budgeting

The word “budget” may have negative connotations for some people; however, setting, reviewing and maintaining a budget can offer many benefits.

For example, you might be able to better control your spending by having a set budget. You might also be able to reach your financial goals faster because budgeting can give you the opportunity to set financial priorities.

Budgeting can also help you prepare for unexpected expenses and allow you to set up an emergency fund within your monthly plan. 

How to Set Up a Budget

The first step requires that you know how much income you have each month (for a student, this is likely student loan monies). You will also need to know what your monthly fixed and variable expenses are.

Some people have a challenging time accurately determining what their expenses are each month, so they may need to take a month to track their expenses before formulating their working budget.

Once you determine your monthly income and expenses, then you will want to subtract your total expenses from your total income to calculate the difference. If you have a surplus, then you are spending within your budget.  This is great news!  You might be able to cut down on borrowing student loans for the next semester, or you may want to start an emergency savings account.

If you don’t have enough money to cover your expenses, then you may need to consider adjusting your variable expenses. Since variable expenses may fluctuate each month, this could possibly be an area that you can make up for some of your shortfalls. Use the Budget Worksheet for Students or the Budget Worksheet for Residents to help you create your budget.

Examples of fixed expenses:
  • Rent
  • Auto loan payment
  • Health insurance premium
Examples of variable expenses:
  • Groceries
  • Clothing
  • Dining out

Cost-Savings Measures

If you find that you have “too much month at the end of the money,” there are things that you can do to help reduce your spending. A few possibilities include:

  • Share housing costs with a roommate
  • Clip coupons to save money on groceries
  • Carpool or use public transportation
  • Buy clothes at end-of-season sales
  • Buy generic brands rather than name brands products
  • Buy non-perishable items in bulk
  • Take advantage of coupons you receive from department stores
  • Cut down on frequent dining out - pack your meals and make coffee at home

Special Considerations for Medical Students and Residents


Every medical school determines a total cost of attendance (COA) for their school. This is a figure that usually reflects most expenses as well as the maximum financial aid you can receive. The COA will be very helpful to you in formulating a budget. Request this information from your medical school’s Student Financial Aid Office if it is not reflected on your award letter.


If you’re currently in residency, and would like to postpone payments on your student loans, you can do so through a mandatory forbearance.  You are eligible for this forbearance on your Direct Unsubsidized Loans, PLUS Loans, and Consolidation Loans during residency. After residency, you will need to incorporate your student loan payments into your budget. See FIRST’s Postponing Loan Repayment During Residency and the Loan Repayment Options fact sheets for more information.

More Savings Information

Review these publications from the U.S. Department of Labor, Employee Benefits Security Administration. They provide some tips and basic information on savings and retirement:

Search Financial Aid Resources

Find a complete list of all financial aid resources, services, and tools. 

MedLoans® Organizer and Calculator (MLOC)

The MedLoans® Organizer and Calculator was developed to assist medical students and residents with managing their education debt.

AAMC Financial Wellness

Access free financial calculators, articles, and videos to help you create a budget, track your spending, create financial goals, and enhance your financial knowledge about credit, financial planning, money management, and more!

Education Debt Manager (EDM) for Graduating and Matriculating Medical School Students

This comprehensive financial guide helps professionals at all levels of the medical education continuum navigate the complexities of financing medical school by borrowing wisely and repaying student loan debt responsibly.

Contact FIRST

655 K St., NW, Suite 100
Washington, D.C. 20001-12399