Upon transitioning to residency, interns are given considerably more responsibility in the clinical setting than they had in medical school. In life, too, resident physicians are confronting new terrain. That includes managing more complicated finances.
Follow these five essential bits of financial advice for residents so that you can focus more of your mental energy on thriving in residency.
Understand your income
The average annual salary for a first-year resident is around $68,000, according from the Association of American Medical Colleges (AAMC). But that does not mean that you will have about $5,600 each month to spend as you see fit. Your net monthly income, after taxes, social security and employer deductions, will be about $1,300 less—varying by the state in which you are practicing—or about $4,300.
For some the fact that you have a salary at all, can be a rewarding feeling.
“Going from medical school—where you're really not making money, you're paying to learn and then having a paycheck—it’s a very dichotomous switch that occurs,” said Liz Southworth, MD, a second-year urogynecology fellow in Texas.
Still, it’s vital to keep your obligations in mind.
“One of the challenges is navigating what feels like this delayed gratification of having some amount of money that is a little bit free and accessible and balancing that with making sure you are saving some, making sure that you're addressing student loans if you were to have them, paying rent, paying car payments, things like that,” said Dr. Southworth. “And while you’re trying to understand that context you’re also going to feel tired and overworked and wanting to treat yourself to some luxuries.”
Create a budget
There is across-the-board consensus—from fellow residents who have had experience in living on a comparable salary to financial experts who have worked with young physicians—that it is critical to put together a realistic budget and to stick to it as best you can.
One workable option is the 50-30-20 rule, which divides a paycheck into three categories. The bulk (50%) goes to essentials such as rent, groceries and utilities. Another 30% goes to more flexible—and less essential—spending. And 20% goes to savings and debt payments.
There are numerous budgeting tools that can help students bucket their spending and gain a better understanding of their overhead and obligations. Dr. Southworth has found a relatively new technology to be helpful.
“One thing that now exists that really didn’t when I went through that transition to starting residency is use of AI,” she said. “It has really helped me understand how to budget. It can offer you a personalized plan and tailored information about how much you should be allocating to certain aspects like rent, food and leisure and what is realistic to put away for savings.”
Don’t overpay your loans
According to a 2025 AAMC survey of graduating medical students, the median medical student-loan debt figure among respondents was around $200,000. Still, more than one-third said their debt total was $200,000 or more and 16% had debt greater than $300,000.
As burdensome as medical student-loan debt can be, paying it as quickly as possible should not necessarily be the top priority. Instead, some experts suggest saving 15% of one’s income in an emergency fund and prioritizing payment of debt with the highest interest rates—including car loans and consumer debt—over lower-interest medical student loans.
KeyBank is one of the nation’s largest full-service banks, offering banking, lending and student loan solutions for physicians at every stage of their careers. When considering your financial plan for residency and beyond, KeyBank offers special AMA member rates on student-loan refinancing, home loans and practice financing. AMA members can schedule a free 30-minute session with a student loan expert to explore your student loan repayment or forgiveness options.
Make sacrifices
As a resident physician looking to stretch a limited income, compromises are going to be necessary. That could mean having one or multiple roommates—particularly in some of the country’s largest cities—or forgoing some of your wants such as a new car or a fancy vacation.
“Balancing wants and needs when you have a paycheck is challenging,” Dr. Southworth said.
“For me, one of the big things was travel,” she said. “You can’t go on a bunch of trips and expect to save. I tried to go on one or two bigger trips a year versus multiple small trips and be conscious of the budget.”
Invest in your future
Most physician residency programs don’t offer retirement accounts with matching funds, but if yours does, it’s key to take advantage of that. Beyond that, Dr. Southworth touted a high-interest savings account as a chance to maximize your savings.
“Saving can feel like a luxury, but it’s obviously important,” she said. “I put aside $500 every month, which might not seem like a lot, but at least it was something that I knew was going toward my savings.”
