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Debt free
One of the first steps new doctors take when needing to repay a large student loan is refinancing. This will allow you to repay a loan with a lower interest rate. Lending institutions provide numerous ways to allow you to repay your student loans. There is no one plan that works for everyone. Some doctors, with higher paying jobs out of medical school and no immediate family to take care of, may find it easier to pay back as much of the loan as soon as possible. This option saves you more in the long run because you are not paying interest payments for an extended period of time.
For doctors with lower paying jobs and other financial obligations such as children, paying back the loan in small increments over an extended period of time, (e.g., 30 years) may be the best option. With this option, you are paying more interest over time, but the payments will not be very high each month.
Whichever approach you take to paying back your loans, disciplined budgeting is the key to successes. You need to be prepared to make some sacrifices, especially in the beginning of the repayment process. Self-discipline does not mean you can never treat yourself once in awhile or splurge now and then, but it needs to be controlled. In fact, it can be nice to give yourself a little reward if your budgeting is working out well. But know your limits.
You may need to adjust your budget as the circumstances in your life change. This brings us to another important step in becoming debt free: the need to be flexible. Consider these ideas for saving money: Don’t always buy the most expensive brands of food or clothes. Look for discounts and deals. Go to garage sales. Use coupons. Stay home and watch a free movie sometimes instead of going to the theater. Be more prudent with how much water you use at home and how many lights you keep on unnecessarily. This will reduce utility bills.
The ideas mentioned above may all sound like common sense but they are violated all of time and put new doctors into bigger and bigger amounts of debt. Remember that to become debt free you need to control costs. It can be helpful to keep the following quote in mind “Control the debt. Don’t let the debt control you.”
The advice in this article is solely based on the experience of the founder of MedFriendly, who holds a doctoral degree. It should not be mistaken for advice from a trained financial advisor.
If you have recently finished medical school and face the prospect of paying back gigantic loans, becoming debt free is definitely one of your major concerns. To become debt free, one needs to be good at debt management. This begins with maintaining a proper budget. To do this, your first need to calculate your monthly income so you know what you have to work with. Then, be sure you set enough money aside to pay for needed annual expenses. This should leave you with some left over money.
To become debt free as quickly as possible, avoid making major purchases that you cannot pay for. This sounds simple, but too often people are tempted to buy expensive electronic equipment or even a mortgage for a new home that they know they cannot afford. Of course, emergencies sometimes occur that may require spending significant amounts of money. This is why it is good to have some money set aside for emergencies. This too, can be set aside in the monthly budget.
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