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Tackling Med Students’ and Residents’ Top Financial Concerns


Co-written by Ann Kane of RBC

Each year we meet with new medical students and residents at several Canadian medical schools, and during our conversations they ask many questions, such as, "How am I going to deal with finances on top of everything else?" Since students and residents are often entirely absorbed in their studies and have little time to deal with such concerns, we have developed this mini FAQ with our colleagues to help those who are worried about their finances.

1. How much do I need to borrow to cover the cost of medical school?
Most medical students will borrow from government loan programs (as much as $60,000) and use the student lines of credit that banks offer (typically $250,000), pushing the total amount of funding available to them to $310,000. However, how much you end up borrowing depends on lifestyle choices and how effectively you manage your finances.

A medical student who is budget-minded and controls his or her spending may have annual living and tuition costs of approximately $40,000 per year. Assuming the student has no other resources, this requires a total of $160,000 of financing over four years. Add this to the debt from an undergraduate degree and the typical student finishing medical school could have debt in the range of $180,000 to $190,000.

A less disciplined student who maxes out all credit sources to the tune of $310,000 will not only have a lot more debt to pay back (plus interest), but it can also limit future choices. We have seen cases where a student cannot afford to go onto the residency program of his or her choice due to a lack of financial resources. A well-managed budget can make the years after medical school much less stressful and may leave more opportunities available to the student.

2. What costs do I need to budget for? How do I budget?
The first place to start is with a bit of research on what your expenses will be for tuition, living costs, travel to and from school and personal spending. A budget needs to be realistic. There’s no point developing a budget that is so strict that it cannot be kept.

It’s important to consider what other financial resources are available (e.g., savings, family resources) and include them in your plan. Also, beware of "hidden" costs, such as expenses for CaRMS interviews. We suggest speaking with upperclassmen, as they will have firsthand knowledge of what a realistic budget is. You may also have access to resources at your university, a financial adviser or even a budget-minded family member who can help you.

There are also some great apps available that have basic budgeting functions to guide you through the process and prompt you when you exceed your budget. (You can see a selection of app descriptions at, but remember to always look at the reviews.)

3. How much money am I going to make? Is it going to be enough to pay back what I owe?
This may be the question we get asked most often. As any practising physician knows, this is a difficult question to answer. There are different funding models to consider, remuneration structures vary by province and individuals in the same field can make quite different career choices.

If your desire is to set up a specialty practice in a specific location, you should look into the availability of positions and the demand for that type of specialist there. Before you incur the extra cost of specializing in a particular practice area, make sure you have an idea of current and future opportunities. This will have a direct impact on your earning potential.

Overall, we find that most doctors are able to make sufficient income to live a comfortable lifestyle and meet their debt obligations, and can typically repay their medical school debt within three to five years. For those who max out all available credit, it of course can take longer to repay.

4. Should I buy a house or just rent?
This question usually comes up at the start of residency. While we have had some historically low interest rates, the purchaser needs to consider upfront costs—i.e., down payment, legal fees, land transfer tax, utility hook-ups, etc.—and include this in his or her calculation to compare with the cost of renting.

As a home owner, you will need to pay for extra operating costs (property taxes, repairs and maintenance, insurance) that add to your monthly expenses. You are also responsible for any large repairs (e.g., furnace, water heater), so a "backup" fund is also needed.

The real estate market should also be considered. While it is hoped that a home appreciates in value, there is always the risk of a downturn.

When your residency is complete, you will need to decide what to do with the property. A sale will incur real estate commissions and legal fees and, in the end, you may be out more money than if you had simply rented. By renting initially, you will get a feel for a neighbourhood and whether you’d like to stay there long-term. Also, if renting is less expensive than a mortgage, the additional cash can go toward reducing outstanding debt. In summary, over the years we have seen a marked difference in the debt loads of students and residents with some personal finance experience and those without. We have found that those who plan and follow their budgets are able to live comfortably and keep their debt levels at a reasonable amount. That’s why developing a plan at the beginning and seeking help when you need it are key to keeping you on track so you lay the foundation for a healthy financial future.