There will be about 16 million college graduates this spring in addition to several million high school graduates who will not enroll in college, many of whom will find themselves in the midst of millions of unemployed workers where there are about five or six or more unemployed applying for every job vacancy. Several times during my 40 plus years of teaching, my graduates encountered the same problem for the first time. During good times and bad, I polled my students with two questions: (1) What is your view of economic conditions in the immediate future? and (2) What are your personal prospects for the future? Thank God, in good times and bad they were almost unanimous that the general economic future was getting more difficult but their individual prospects were better. Had it been otherwise, their aging professors and society would have found little comfort in their responses
Professor Diane Dreher, an English Professor at Santa Clara University, made the observation that there is an inclination for students during good-time labor markets to make hasty decisions, jumping into the highest paid or most prestigious job without much consideration of their own strengths and values. Too much incongruence between the job and one’s values and strengths can in time lead to the question, “What the hell am I doing in this job?” Yes, you need a job to eat in the mean time, but that can also be a time to build a strategy for how to define your values and the job that will help you sustain them. I am sure that I don’t fully comprehend the concerns of this generation because I entered the work world at a different time, so in a sense I was never the age of today’s graduates. The baby crop eight decades ago was one of the smallest ever birthed in this country, which translates into a lot less competition in the years that followed. Still I had students in front of me for half of that time and have heard their concerns, written countless numbers of letters of recommendation for them and talked with them about their job hunting successes and failures.
Advice from old guys is often not welcome, but here goes. Be of good cheer, this too will pass. Economics is the “dismal science”– economists have forecast nineteen of the last three recessions. Keep thinking and planning beyond tomorrow and never stop learning. People and organizations who plan usually do better than those who do not, but in all truth, they seldom follow their plans. Remember, frustration usually arises not from actual obstacles or barriers but from unrealized potential. Life and careers are more marathons than dashes, so stay in training mentally, ethically and spiritually for the much longer race. Thereafter, each passing time will sing to you that what you have been through is not as serious as you thought at the time.
Financial issues are a source of intense stress for most students and residents. It costs a lot to become a doctor and is costing more each year. The goal is to finish your training without being handicapped by financial issues. Doctors (including me) are not experts in financial issues (even if they think they are). There are financial counselors at every medical school, or they will at least be able to refer you to someone. It’s a really good idea to learn about this early. Make an appointment and go talk to them about they best way for you to approach your own financial challenges. There are some basic principles that will help get you started:
- Limit your debt. Pay off credit cards every month. There is really no exception to this rule. The interest on credit card debt is obscene. You have to avoid it at all costs. You have to make a conscious effort to live within your means. It may be you have to have a car, apartment or clothes that aren’t what you would consider ideal. But, in the long run, not running up the debt is far more important. Make a budget, keep track and monitor your spending. This is a really good resource from the AAMC to help you understand how to manage your money in medical school, including how to budget: http://aamc.financialliteracy101.org/welcome.cfm
- Your credit report is important. Let me repeat that… Your credit report is important. It doesn’t take much to have the score slide (a few late payments, missing a payment) and it will follow you a long time! It takes about 7 years of perfect credit to get the score up to a level where you can buy a car or a house. It is really easy to not pay attention to this during your training… and then pay the consequences after you finish. http://aamc.financialliteracy101.org/graphics/factsheets/creditscore.pdf
- Before you worry about investing, you should worry about protecting what you have (even if it’s not very much). You should automatically have life insurance and disability insurance from your institution, but you need to check. Unfortunately, if you are a resident, the “MD” behind your name makes you more vulnerable than the general public – and lawsuits can be against future earnings, not just current salary. Many attorneys recommend that you spend the relatively small amount it costs to obtain an “umbrella” personal liability policy to help prevent a large lawsuit from someone if you are involved in an automobile accident or someone trips on your front porch. When you are in training, these kinds of insurance policies seem like a waste of money. But – they aren’t that expensive when you consider that all your money can be wiped out with a single disabling injury or personal lawsuit. When you go to meet with the financial experts, this would be a good question to ask.
- Once your insurance is covered, and you start having a salary (i.e. when you start your residency) invest a little on a regular basis through payroll deduction. Having the money taken out before you see the check is key. This is a habit that you want to start early. This can be for a retirement account (pretax money) or another kind of investment account. Again, talk to the financial counselors to learn about these options and decide which is best for you. The pretax dollars are important…. If, for example you earn $1000, you will be taxed roughly 30% on that money i.e. $300, leaving you $700. If you invest $100 dollars into your retirement fund, you will only be taxed on $900. That means you will pay the government $270 instead of $300. You will now have $630 to spend, instead of $700. But – the $100 will compound incredibly. Try it out.. http://www.econedlink.org/interactives/interest.html