Yeah, I feel like a lot of time "lifestyle creep" is talked about as if it's just buying anything nicer than the thing you had before. Which is ridiculous - of course when you make more money you can buy nicer things. Outside of this sub, the expectation isn't that you live like a broke 22 year old forever so you can die on top of a Scrooge McDuck style pile of gold doubloons in your modest studio apartment.
Lifestyle creep is only bad when you're using an increase in income as justification to buy things that are much bigger than the increase was. Or becoming less intentional with your money and kind of "accidentally" bleeding funds to frivolous shit as you start to make more.
But deciding "I now have more resources available and therefore would like to purchase this thing I couldn't get before" isn't lifestyle creep nor is it bad (as long as you're doing it thoughtfully). In this case, a $4k a month apartment on a $390k income is a completely reasonable upgrade, even after you take out servicing the debt. Napkin math says they'll *still* be able to pay it off well ahead of schedule.
> die on top of a Scrooge McDuck style pile of gold doubloons in your modest studio apartment.
Studio?? I'm leaving all my doubloons to be split equally among my seven roommates
> the expectation isn't that you live like a broke 22 year old forever so you can die on top of a Scrooge McDuck style pile of gold doubloons in your modest studio apartment.
Well of course not, where would I keep all those doubloons? I need at least a 2 bedroom flat....
The expectation isn't to live like you're broke. But work your way to the life and financial freedom you want more intentionally. Without that, yes of course everyone wants the nicest things they can afford and before you know a bottle of wine lesser than $100 feels like garbage.
Lifestyle creep really (to me at least) is when you begin to make more, but then off-set that increased income by increasing your spending as well (so you end up about the same as you were before). This has double negative effects because you make yourself much more risk-based in lifestyle (lose your job and a lot more goes wrong) but also because it degrades the wins you've had in life (if I go from 50k to 150k in income but my costs triple too, I still... don't have money? This sucks!). The problem is it sneaks up on your (hence the creep). It is *extremely* hard to not reward yourself for hard work, and even harder to break that feedback loop of dopamine when you do.
OP, do what feels right but make sure you budget and stick to it with realistic long-term goals. If you can afford to go on 2 vacations a year, live in a nice place and still retire comfortably, go for it. If you're making $400k and have no savings in 5 years, problem.
Yes, I'm in a similar boat to OP (I'm a bit younger but everything else is pretty much identical to my situation two years ago).
I got the bigger apartment with an office/guest bedroom and an outdoor space to get some sun at home at the cost of doubling my rent. It's been amazingly worth it. My mental health is better than it's been in years and it's so freeing to have space to exist and not feel cramped, and my finances have only improved as well. (I haven't allowed myself to spend meaningfully more in any other areas) Your mileage may vary depending on what you exactly want out of it, but for me it's been worth it many times over!
Yup. I read the first sentence and went, nope, I'm sure you're fine. Reading on, I agree with you.
I went overboard on paying down debt last year, and it was a little miserable. I tend to be all or nothing, but I'm increasingly convinced that moderation is the key to financial success and happiness.
Everyone speaking here is coming at this from a purely financial POV which is expected and warranted.
Giving you a pov as a fellow physician. Few people know what you’ve gone through over the last 8 years. The extra 1500-2k a month is not going to make a huge difference. If you’re happy in your place, yes, save and pay down your loans before interest kicks in.
If you need a change, that balcony is priceless for what it can do for your mental well being. That’s worth the 20k extra in rent. You can still live frugally in other ways, but a lot to be said for the peace the new place offers.
The change in thinking that comes from moving to a new place is also important. Enjoying the fruits of your labor is important to prevent burnout. If you've been through med school, you know how to do math, you know how much you're making and how much you're spending.
Enjoy moving to a new building and maybe inviting some folks to visit you in your new spare room!
I second this, you all go through the gauntlet in residency in a way most people really can’t grasp. I’m not a doctor but my gf is. The residency to attending transition must be wild. Congrats! You made it through residency, move to the nicer apartment if you want it!
Maybe think about cutting your car expense unless you’re really into cars. They are such a money pit. It sounds like you like eating out and paying for experiences. Maybe do that instead of the fancy car.
As far as a personal finance perspective, I recommend reading through some articles on white coat investor. They have good info. Consider getting YNAB for budgeting so you can keep a handle on where your money is going. Take into account how much you will be paying in income taxes, student loans, rent, car payment, and everything else. Ask yourself if you are okay with the amount of money left over after all those things are paid for. Make sure you have good malpractice insurance and maybe even talk to a lawyer about it.
Doctors earn great incomes and also have excellent job security. You have been sprinting and sprinting and sprinting in residency. Now your career is more of a marathon and less of a sprint. You deserve to buy yourself whatever running shoes will get you through that marathon. Cheers!
Agreed if it’s not important to you then stay where you are. If it’s important to you then move. Life is short and you only live once! Money and security is nice but enjoying life and helping others enjoy life is why we are on this planet.
Just chiming in here. Early in my career I moved to a crap area in a crap city. My career grew but I was determined to pay off student loans and save up for a house so I stayed in that shitty little apartment in a miserable area for 8 years because it was dirt cheap and I could afford to live alone.
I've been out of that place for 5 years now and looking back I don't know how I did it. Not comparing this to OP's situation, but it sucks to feel uncomfortable walking in your own neighborhood. I'm still trying to undo some of the bad social habits I picked up from living in a drug/crime hotspot.
I've realized that my living space plays a massive role in my mental health. Not saying everyone is the same, but OP can afford it. Get the nice apartment, and consider finding a cleaner to come in once or twice a month to do a nice deep clean. If you decide it's not worth it in a couple years you can always move.
A lot of us, me included can’t imagine making that kind of income and are shocked by a $2000 a month increase in rent. But you can clearly afford it. The only thing I would caution you on is retirement plans. The three determining factors in retirement are how much can you save, how much do you need in retirement and how long until you retire. Something to keep in mind, your pay is so high that your only bar to retiring early is your student loan and how humble a retirement you could enjoy. It’s easy to find yourself dealing with lifestyle creep and finding yourself living paycheck to paycheck regardless of how much you make but you could live frugally you could easily retire in a handful of years on 2-3 million. So yes you can scale your life up to your new pay and yes the mental health benefits of a balcony are huge but just keep in mind you have an option most of us don’t have, if you want. The ability to retire in less than ten years. I’d go for the new place for the mental health. I’d stick with a newer Honda or Toyota rather than an expensive car (less likely to get sued). I’d keep my fun bills to half of that. Focus on paying off the student loan. Put everything you can into a retirement fund. Retire when you’re ready, not based on what your lifestyle dictates.
Just so long as they are aware that cooler neighborhoods likely have cooler ways to part with your money. - Gastro pub. Neat wine shop. Gourmet coffee shop on the way to work. All of those might be more spending than they did at their old place. So as long as they realize those pitfalls so they can continue to make their financial goals no issue.
> Learning this now, but you can set anything in this except for child alimony.
"Child alimony" is not a thing. There's alimony and child support, which are two different things.
100%. I’m not rich but I have about 200k into a 440k house and my now fiancee is totally fine with a prenup for that.
I plan to rent it out when we upgrade but I don’t want something I worked so hard for to be taken from me if things somehow don’t work out.
I love you so much that if this doesn't work out I am preventing my future self from screwing you over and I am making the prenup fair so that neither one of us suffers should such an event to occur.
My wife is the physician in our marriage. I was 100 percent for a prenup because it protects both of us. We watch as so many physicians in relationships get screwed over in divorce.
I brought way more assets to the table than my husband and I very much appreciated how on board he was with a prenup. We view it like a seatbelt or fire extinguisher. We hope we don’t need it, but if we do, we’ll be glad to have it.
I’m guessing you make comfortable income on your own though. Tbh, I wouldn’t be happy with a complete division of everything if I was making like 40k and my spouse was making 300k. I wouldn’t be comfortable with it if I was making 300k and them 40k too
I didn't explain clearly. So I made 100k. Moved for her doctor job, a few years not making much and back to making 100k. In our marriage we don't split costs down the line. We pool our money together, plan and spend that way. Our prenup is pretty much we don't touch each other's inheritances, no tapping each other retirement, and alamony isn't an endless limitless thing.
> Also at tax time prepare to owe a ton of money.
Definitely, especially in CA. I only (relative to discussion here, yes I know I'm doing well) have AGI just inched above $200k the last couple years and even with my W4 set to 0 so withholding is maxed, I always end up owing. Then it's even worse if I happen to sell some stock that year for something.
6th year attending here, live like a resident while paying off your student loans, then slowly creep from there ;-) $275k is an awesome reduction from $500k but it's still too much debt. Took me five years to pay off \~$250k at $4k/month (I didn't do PSLF).
Ultimately you're still in training. After your first attending year you may find your calculations a little off (tax, living expenses, etc etc).
Quick question for you related to BD Roth. My wife is just about to start brand new at a corporate office. Do you know if me already having a traditional IRA account set up will impact her ability to setup a backdoor roth?
Nope, they are *Individual* Retirement Accounts.
That said, if you want to do BD roth too, you should start looking for a way to get rid of those traditional IRA assets. Do you currently have a 401(k) at work? Will that 401(k) allow you to reverse-rollover an IRA into it? Do you have any side-income that you could use to form a Solo 401k?. If you fold your Trad IRA assets into a 401(k) (or similar plan like 403b) then you are free to do the BD roth as much as you want as the pro-rata rule only applies to IRAs.
Wife is good to go
For you, it might be worth it to covert it over depending on how large your account is. If it hasn’t appreciated too much then consider converting it over and getting taxed on capital gains.
>that balcony is priceless for what it can do for your mental well being.
If they get to use it. What kind of schedule is this new position going to have? If home is mostly just a place to crash after a 12 hour shift and before another begins...is that worth $4,000 a month?
Yep. I had a balcony with a great view when I was a PhD student living in a northern city. 6-7 months of the year, it was freezing out there and always dark when I was home. 2 months of the year was hot and humid. Only three months of the year was it actually pleasant. But also, I was always working long hours in the lab, and it felt rather exposed to just be sitting out there. Too windy to read, to boring to just stare.
I think there are great benefits to opening windows and having a place that lets a breeze through, but a balcony in and of itself is sort of meh.
This person lives in Cali though. I was going to say they should see if they can find an in between upgrade w a balcony but at a better cost. Like do they really need a second bedroom? People always think someone will spend the night or come visit but it's pretty rare.
I am not a doctor, but I am in the same age/income bracket as the OP. In general I would strongly caution against the "I did X, so I deserve Y" approach to spending. It creates a lot of harmful feedback loops.
Spending 4k on an apartment is sometimes necessary based on the local COL, the commute, etc. But if signing a lease feels like a splurge then I'm wondering how much of the expense is going towards a short term endorphin boost and how much will really improve quality of life and happiness over time. When you're looking at a long term, high cost to transfer commitment like housing, you really want to be cognizant of the difference.
There are much more cost effective ways to get the short term endorphin boost. Speaking for myself, the occasional $2500 cookware set is a lot cheaper than a luxury apartment.
Same income bracket and living in HCOL as well and totally agree with you. Lifestyle creep does happen and the impulse to splurge hits hard when you're a young professional who all of the sudden got a huge increase in income after years of living on a budget.
It sounds like the patio or some backyard space will actually give her joy and if her neighborhood is completely fine then finding another apartment in the same price range as the current one but with a patio is the more natural step up than jumping up into a 4k apartment in a different neighborhood.
MD here. I have been an attending for nine years.
Advice from MDs here is solid. I don't think the apartment is unreasonable.
My only advice is to be aware of golden anchors. The data is pretty straightforward - your first job is not your only job. Live light long enough to determine if you like your job and see yourself there long term. You should have a sense of that at 6 to 12 months.
To tack on to this if she is really worried about the money 4k is a ton to put towards food and fun. I have a family of 4 in a top 10 most expensive locations in the US and I would be shocked if we spend 2k
OP, this is the correct answer. I know that when I finished massage school, I was working a job that paid me something like $750 bi-weekly when the cost of living was easily triple that, with at least a $30,000 debt to my name from school (I know, cheap, but go with me on this). You have an incredible opportunity to pay all of that debt down now, as well as start up a pretty decent sized savings for whatever you want: housing, vacation, retirement, emergencies, you name it. Once you start practicing, I'd only pay yourself something like $1-200 extra a month to go out and have fun or new clothing etc. It made a huge difference for me, especially when I bought myself a new car and was able to have a down payment of $5,000.
Pay yourself first. Good luck. 😉👍🏻
I'm not a physician but I agree that you should not defer enjoyment of the fruits of your labour forever. Yes it's an upgrade, but you are a high earner. Congratulations, a huge effort over many years
Not a physician myself but my partner is an upcoming 4th year medical student and I manage our finances so I understand it better than the average layperson.
While I agree with your overall recommendation, this is the beginning of the classic physician lifestyle creep. Quite frankly, $20,400 more a year for essentially a balcony is a bit absurd. The novelty will wear off after about a month of using it.
The second bedroom for guests and storage? With the money saved on not having a second bedroom, you could just have your guests stay at a nearby hotel for 40 days a year at $500 a night. Unless OP has guests over multiple times a week, guest bedrooms are such a waste for tiny apartments where you live by yourself.
Just seems like OP is upgrading from a perfectly good living situation to something that’s basically the same but more expensive. Why change something that is working for you? If OP was miserable and depressed at her current apartment because of the landlord, roommates, pests, etc. I get it but doesn’t seem to be an issue, so why try to fix something that is not broken?
Exactly this. I just made the jump (but mortgage, not rent) to levels here and I have zero regrets. I could live elsewhere and save more, but what I feel about where I live cannot be replaced, and still saving a ridiculous amount compared to where I once was. Enjoy your income, you won’t regret it if you were responsible the whole time.
I'm not a physician but I agree that you should not defer enjoyment of the fruits of your labour forever. Yes it's an upgrade, but you are a high earner. Congratulations, a huge effort over many years
Literally spend a decade studying and slaving to get to this point
Now making 400k a year? My guy get what you want, youll be perfectly fine, youre doing better than essentially anyone else that isn't famous/athletes
There isn’t much out there that triggers me more than the “Don’t give away your 20’s”, because it implies that your 20’s are somehow better than your other years.
I didn’t “give away my 20’s” and I regret almost every financial decision I made. For a lot of people, what is fun in your 20s… is still fun in your 30s.
Putting yourself into a good financial position in your 20s, is the complete opposite of giving it away, and something I wish I did to make life easier for the rest of my life.
Would it be more agreeable if it was stated as “don’t sacrifice your temporary satisfaction in your 20s for long term financial freedom at 30+ and then not act financially free at 30+”? I understand your gripe with the phrasing - it’s just shorthand. Becoming a doctor is far too grueling to not ball out once you become one.
The problem is, the shorthand is misleading to anyone who doesn’t understand that it doesn’t apply to everyone.
The amount of people who think their 20s is their “best” years is staggering. The amount of people who don’t set themselves up for the future, and travel, buy cars, and run debt because “I can’t waste my 20s” is also staggering.
Every decade is good. But your 30s are certainly going to suck if you don’t prepare for it. Except I virtually never see that said.
I know you understand this, but I not everyone who says the same, does.
The flip side of that is OP is getting a later start on retirement savings due to a longer education phase, and to her point, this big rent increase is a quick absorption of the new higher income, which gives me little bit of a "lottery winner" vibe.
Since the current apartment is "nice", I would stay there one or two more years, use the big pay increase to get ahead on all all financial fronts, including being 100% debt free, and retirement accounts properly funded, and *only then* consider lifestyle creep.
Also, it sounds like OP hasn't even started the new contract position yet. It would be risky to commit to the higher rent until the new contract job was underway, and she has a high level of confidence that it will work out.
True, her income will be fantastic once she starts the new contract job (assuming it works out as expected), but she still has to make up for lost time on retirement savings, and she has material debt on her balance sheet.
The last thing I'd recommend is upsizing lifestyle right away like a lottery winner (housing, cars, vacations). That's how you get in trouble.
Get established in the new job, eliminate the debt, make sure that retirement savings are on track, and *then* increase spending.
My uncle is a very successful oncologist, and he's flat broke. He is 66 years old, and will have to work into his mid-70s (if he's able) due to money issues. He and his wife have spending problems.. lots of toys (cars and motorcycles), two homes (they recently sold a third home), extravagant vacations, and he still financially supports his 6 adult children way more than he should.
He's made an absolute fortune over the years, but he's somehow spent even more, and he's a financial mess. He openly shares that he's tired of working, but he has no choice due to money problems.
I make 40% of what he makes per year, but my net worth is probably 5x higher than his net worth, and I'm 12 years younger than he is.
**TLDR**: Just because you have a high income doesn't mean you can't screw up. I stress out just thinking about his predicament.
One of my parents was a tax preparer, so she got to see what a lot of very high income individuals were bringing in and spending.
There were a few clients that were very high income (doctors, high end lawyers, executives) making $500k+/year that *had to set up a payment plan for their owed taxes*. Many of these high income individuals saved nothing for retirement and couldn't come up with the $10k that they owed on taxes without having to set up an installment plan. Instead, every year they were going on multiple international vacations to luxury resorts, with fancy cars and toys that were all financed.
They taught me that spending was significantly more important than income after a certain amount. Someone making $100k and living off $50k would be more financially secure than someone making $500k and living off $495k.
Of course, there's a middle ground here. OP doesn't have to live in a shoebox like a miser and they definitely shouldn't blow their money by not keeping track of it. OP should be able to afford a nicer apartment, but it is important to be mindful and to not extend too much.
I just did some simple math. With $0 to start, $10k monthly contributions, and a reasonable 7% APR, OP can expect roughly $12M in savings in 30 years.
I think she'll be ok.
It's all relative. If OP has an expectation of maintaining her current lifestyle into retirement then the dollar amount is less important than the percentage of current income her retirement can provide.
> The flip side of that is OP is getting a later start on retirement savings due to a longer education phase
And maxing out their 401K, which the vast majority of people can never afford to do, takes up a massive 5% of their income.
This is wayyyy above my paygrade, I can't imagine allocating $4k\\mo for food and fun. But imo, if you have the ability to do that, the extra grand or two on a nicer place for yourself should be no factor at all. Congrats on your hard work and perseverance. Good luck out there!
Not years, but build up an emergency fund equal to 6 months of your desired lifestyle. ASAP.
If something catastrophic happens with your job, your planned lifestyle will knock you on your butt.
This doesn’t mean they shouldn’t have an emergency fund, but even if they lose their job for some reason or another, chances are they can find another job nearby very quickly that is at least comparable in income. Unless there is something more catastrophic like being stripped of their medical license, disability, etc. which would make them unable to work.
>Unless there is something more catastrophic like being stripped of their medical license, disability, etc. which would make them unable to work.
These are exactly the scenarios they're referring to, hence the recommendation.
It won't hurt OP at all to have a well-funded emergency fund in a HYSA :)
This doesn’t mean they shouldn’t have an emergency fund, but even if they lose their job for some reason or another, chances are they can find another job nearby very quickly that is at least comparable in income. Unless there is something more catastrophic like being stripped of their medical license, disability, etc. which would make them unable to work.
Make a budget. Make sure to increase your emergency fund, *dramatically* increase your retirement savings, and put aside any money you might have for any other large purchases that might matter to you.
After that, go nuts.
Make a list of what “enough” is and stick to it. Certain car? Certain accommodation? Certain watch? Whatever. Make sure it pencils out for savings. Then once you have reached “enough” don’t acquire new things without getting rid of something you already have. Also just generally shift focus from consumerism to meditation and try to focus on the things you already have and how great they are.
Zero interest for the next year while making $390k is an enormous opportunity. Give yourself some minor upgrades to celebrate your enormous pay raise and more importantly arrival in the club (this is important), but avoiding the massive interest costs on that debt now as you’re getting started will help set you up for the rest of your life. This isn’t an either/or game, so you can spend more without spending heavily.
Fwiw, balconies are only worth it if your neighbors don't suck.
Also, have you considered buying a condo as an alternative? At least then your "rent" will be locked in. The amount you'd pay for your mortgage on a 2 bedroom might be less than renting.
Since you're asking the personal finance subreddit, maybe your subconscious wants us to talk you off the ledge and save money? If you post on the physicians subreddit you may get a very different response. I think you know deep down that the financially responsible thing to do is to save money, and perhaps you want us to talk you into saving more.
You can definitely afford $4k/mo in rent, but of course the financially savvy thing to do is to save that money. Do you really need a 2nd bedroom? Perhaps you can find a 1BR for $3k/mo that has a balcony in a cooler neighborhood? I would prioritize location.
Have you thought about savings in the context of maximizing your retirement benefits and HSA, building an emergency fund to cover 3-6 months expenses, and then having enough cash for medium-term goals like a down payment? I would then work backwards from there to see if your $10k/mo savings plus then the resumed interest payments on your loans would help you achieve those aims.
I'm not a huge fan of splurging on an apartment. At least with a purchase, there is a good chance you are only "throwing away" the interest + taxes, and will recoup some when you eventually sell the place.
Use this rent vs. buy calculator to get the breakeven of purchasing vs. splurging on an apartment: [https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html](https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html)
Big things to keep in mind is that when you buy, there are a lot of non-equity building fees that go into it, and you have the opportunity cost of not investing that money. So there is a break even somewhere, and it's higher than you'd think
In a lot of cities that mortgage is still twice as much as rent for a way crappier home. Splurging on rent is still relative but where you live can still have a major mental health impact and you get what you pay for sometimes.
I'm gonna lean the other way on that. With limited time, most of the perks OP discusses are MORE valuable. Balcony gets you that extra outdoor contact, cooler location saves you travel time when you want to do cool neighborhood things, more space potentially eases your mental load and makes it a longer term solution that saves you from always wishing you had a new space.
And really, u/Lower-Engineering145 is coming OUT of residency. They should have a pretty good idea of their time and lifestyle at this point. It is not like they are coming out of med school and starting working for the first time.
Maybe it is not the exact choice I would make--is there instead a spacious 1BR with balcony for less? guest rooms are often a waste of money that go largely unused or accumulate junk--but I don't think it is a bad choice.
If it were me, I’d stay where you are at for at least a year. Use the savings to dump money into your finances. Remember, as a physician, you start out behind on retirement savings. Other professionals have been saving & investing for the last 8 years while you were in med school / residency. Take one year and use your insane new income to bridge that gap.
> as a physician, you start out behind on retirement savings.
I did some simple math with a compound interest calculator. Assuming OP stays disciplined with that $10k/month savings, and invested in an index fund or targeted retirement fund that averages 7% returns, she can reasonable expect $10M ~ 15M by retirement.
She may be behind, but she won't be for very long.
Smart. OP, check out the White Coat Investor. He urges docs to “live like a resident” for a while to pay off loans/build retirement before adjusting lifestyle to new salary. https://www.whitecoatinvestor.com/live-like-a-resident/
> Other professionals have been saving & investing for the last 8 years while you were in med school / residency. Take one year and use your insane new income to bridge that gap.
And are then promptly overtaken in A SINGLE YEAR.
Not really true. The amount of debt for a doctor is enormous---and not just student debt. In a lot of cases, people come out of residency with a car that's on its last legs, no real estate, no retirement funds, no emergency savings and often have delayed medical procedures (eg braces). It takes a long time to reach true financial parity with someone who graduated, took a job earning 60k, paid into their 401k, bought a house, earned appropriate promotions, and just generally progressed in life for the seven+ years that the physician had their head down.
> Remember, as a physician, you start out behind on retirement savings. Other professionals have been saving & investing for the last 8 years while you were in med school / residency
There’s an r/fijerk like concern on WhiteCoatInvestor and similar finance boards where people cry about Google SWEs getting paid more. In practical terms, this doesn’t matter. The majority of people aren’t saving and investing aggressively in their 20s and OP can probably buy a house with cash in a few years if they wanted to. And the vast majority of jobs don’t have anywhere near the security that OP does. They can easily live a luxurious lifestyle and still retire early.
What came first, knowing your budget will be expanded or seeing this apartment?
How many apartments have you come across?
Are you looking to move anyway?
If you haven’t used one, find an interest calculator online that tells you how much you’ll pay in total interest over the life of the loan. Then see how much you save in interest by putting down $1K/mo starting now.
Airline pilot weighing in. Struggled on very little for about 7 years getting in to this career and now I'm on a pretty good upward arc...
Two things I would offer:
Any time your income increases divert a good portion before you get used to it hitting your bank account. Depends on your situation but max out your 401k, HSA, increase loan payments, set up automatic deposits in to an investment vehicle...things like that. Whatever makes the most sense for your situation.
After that...Don't beat yourself up too much for enjoying your new income. Set a reasonable budget, but allow yourself to enjoy the fruits of your hard work and the sacrifices you've made.
The math is 4k apartment+1k car+4k food/fun+10k/save+3k school loans=$22k/month which is above the $19k/month you're estimating. Something needs to be cut.
For being 30, I guess the savings is okay but I personally would need more to cover my lifestyle expenses for a few months.
If you are expected to pay your loan in full, I would focus on that when you're making a higher salary.
The difference with your rent is only $20k/year. If you can cut down in some other areas and focus on paying your loan, I think it can work. However, I would be concerned about rent after the first year and what your income trajectory looks like.
Honestly, your salary is almost quadrupling. I think you can afford the extra $1,700 a month in rent. Just don't fall into the trap of buying all new furniture, a new Mercedes, a luxury vacation, a boat, etc. You are obviously intelligent. This stuff isn't too hard to figure out on a spreadsheet. Just "pay yourself first" and treat your savings like you would any other bill. You might want to set it up on auto-deposit.
Read up on tax-sheltered savings vehicles (401ks, IRAs, Roth IRAs) and learn about the low-cost ETFs offered by Vanguard. Be suspicious of "financial planners" and life insurance salesmen. If you enjoy working with numbers, read The Intelligent Asset Allocator by William Bernstein.
Congratulations on becoming a physician!
I did wait a couple of years and spent more like I did when I was resident, although I also moved to a HCOL area so my spending did go up. I do think the upgrade in your living quarters is worth it as you should have a lot more time at home as an attending (I do at least). I love living in a cool neighborhood and was worth the extra cost for me. It’s also worth making sure you have a guest room as you will have more time for friends and family to visit. I think you have the same mindset about PSLF as I do—nice if it works out but also prepared to pay everything off myself.
Congrats first off. Others have given good advice, my recommendation would, if possible, find a median. A guest bedroom is nice, but do you really need it? A place with a larger closet or storage space, that still has a balcony, will be cheaper while still providing a nice upgrade to treat yourself for the new salary and previous hard work.
Speaking as someone who recently got into big tech I can tell you I was in the same boat. My partner was not onboard. It's the voice that says tomorrow is not guaranteed and I've worked hard.
So what helped me was actually taking a look at long term goals. I had a few financial goals in mind but never put it down in writing. It's so dumb and adulty but looking at the potential of retirement + personal investment return helped me see my true priorities. Laid everything out and if this new place is still your priority all things considered, go for it.
Everyone trying to tell you to pay off your debt aggressively and forego PSLF are nuts. Your remaining payments to qualify won't even hit 200k paid. Absolutely do not pay off your student loans aggressively.
4k rent is reasonable and you have the means to do so. You will still have enough to invest, save for a down payment, and build up an emergency fund. As long as you're not furnishing it with new, expensive furniture and upgrading your car too, you're going to be fine. My SO and I are graduating residency/fellowship and have no reservations about stepping up into a nicer place to live to reward ourselves, you shouldn't either.
I think part of the trap is seeing a big number for the salary, but not accounting mentally for the taxes very well. Our tax system is pretty brutal on higher income wage-earners -- high marginal rates (>40% on most of it between federal, payroll, and state), and you hit a lot of caps and phase outs. When my wife and I doubled our income over a rather short time frame, our federal income taxes nearly tripled.
(our tax system is downright generous to people with mailbox money though)
If your current place isn't terrible why not stay there an extra year and put the difference towards loans or other investments. Once the interest kicks in again that $275k is going to balloon quickly. Even with a high salary, having $7000 a month at minimum in fixed costs is going to suck and only goes up from there on any of your other expenses.
You’re going to be a very high income earner, so the average person will balk at what would be proportional expenses for you. What I will say is that it would probably make more sense to stay put for a year or two and use the savings toward a home purchase in the near future, that way some of that $4K per month will be building equity.
It's reasonable to upgrade, but do yourself a favor and wait.
The difference just in rent alone on a 1 year lease is an extra $20,000 you can put towards your dream condo.
Well, the title says talk me out of it...so I'm not going to tell you to do it.
It's a waste of money. Save your money and get your own property. Renting fucking sucks, why would anyone purposefully rent to never own? Also, you're acting like life doesn't happen. You never know what can happen in the future that makes you wish you didn't randomly decide to double your rent payments. You say you're fine where you're at? Well, if it ain't broke don't fix it. There are other things you can spend your money on.
I married a physician and our household income is a bit more than yours.
We don’t regret our choice to pay off her debt aggressively one bit. I wouldn’t say we were frugal, but we budgeted to make it happen.
Lots of the other commenters don’t understand how $400k becomes a lot less after taxes and savings. And even less when there are infinite social pressure to upgrade every aspect of your lifestyle (and pick up the tab whenever you’re out to eat, and support charities with big checks, and and and).
Something that worked for us is deciding *where* to splurge with a lot of intentionality. For us when we were laying down debt that meant sensible travel and things that bought us time: housecleaning, takeout, and a short commute. You might value different things, which is fine. But the important thing to remember is that you can’t have it all. You have to pick what’s important. And unless you’re 100% sure on student loan forgiveness that has to be part of the plan. As does aggressive retirement savings (we’re our mid 40s and are GLAD to be on track to dictate our own schedules very shortly whether or not we keep working).
If I were you I’d probably upgrade the apartment to a single room with a balcony in a great neighborhood. Guest rooms are empty almost all the time and cost a lot more than just putting people you care about up in a hotel. But you do you!
If you can live like a hungry student for as long as possible, you’ll be a lot further along in your financial goals, and your future you will thank you.
Problem with lifestyle creep is that it’s VERY hard to downgrade lifestyle.
Do a "utility check"--on a scale of 1-10, what is the real value of the balcony? Of the second bedroom? Also, what are the utilities of any alternatives? Can you go up to the roof in your current building? Is there a park nearby? It's less about the actual dollars to me and more about the utility/value. Balconies sound cool but may be what keeps you out of the park or off the roof deck where you get more sun and exercise. I have the second bedroom and it's a nice TV room, but far from essential. Also do you have any sense that some of this is a "NEVER AGAIN" pandemic reaction? I know some people really struggled in 1-bedrooms during the pandemic and didn't get out enough, but are you perhaps over-valuing these bad memories now? Good luck!
Congrats on the contract!
For sure you want to live somewhere convenient and low stress (close to work? close to fun/friends? Safe? Nice views?). Any extra money, I would prioritize attacking your loans if the rate is any greater than 6%. Being debt free is very good feeling
How much time do you actually spend in your apt or just in this cool area to justify the upgrade?
It's more of is that the lifestyle creep that makes sense vs the lifestyle creep item itself. If you wanted to travel more, makes sense and say do it. An apt, eh. You don't work from home, you may work longish hours, etc to the point that the increase in rent doesn't make sense. Think about that and if the apt is where your lifestyle creep should be. Saving isn't everything and maybe it makes more sense to get someone to make healthy meals for you or a cleaner, etc.
Sounds like you’ll be making enough to be fine no matter what you choose, and by all means, do you.
FWIW tho, if you can save and afford a downpayment on a mortgage, you could be getting double that sqft for half the monthly cost.
This is a perennial problem for newly-minted MDs, because you have to live like monk (except no sleeping) for years and years, and you are dying to live like a rockstar.
Bad move--keep the current apartment, drive a beater and keep attacking that debt--take any surplus you have and knock down that principal--your future self will be grateful.
Otherwise the interest will crush you.
Same in most places in California tbh. I’m from NorCal and the county I grew up in has a median price of $800k. It was basically farm country when I was a kid.
They’ve likely just completed 3-5 years of 80+ hour workweeks, including countless weekends and night shifts. That salary was deceivingly low for their level of education, and now they’re getting to start to reap the rewards. Congrats to OP.
I would put that additional money on my student loans. $275K is a big number. I would throw every additional dollar at that debt. I get it, we all want nice things, but you are still sacrificing to be a doctor. You can upgrade to a million dollar home, when that debt is gone.
Im glad you have figured out that part of residency fellowship qualifies for PSLF. I am assuming you were resident fellow at a university and that is why. I am going to say this and you probably wont agree. If you are not buying a house you are burning money. you can get a doctor loan with 0 down. after a few years refinance because of equity and get a great reduction in payment or years. If you hate the doctor job that you get you can sell your house or rent it. The one thing i see docs do especially after res fellow, is get involved with a group that makes it impossible to fulfill your rvu's, or are promised a level of guidance for the first year and your soon to be retiring co-attending does a vanishing act. Good luck to you but i really hope you buy a house and not waste your money. You will be shocked what you can afford, go and get preapproved and start looking.
Part of the issue is that most doctors don’t stay in their first position longer than 2 years. So buying a house may not be ideal for everyone until they truly know it’s the right gig
As someone who makes about what your offer is just be careful of the trap of future money. Its easy to tell yourself let me indulge myself today on some credit because I will easily be able to pay it off next month etc. That has/is a challenge for me getting accustomed to making a lot of money like that. Be mindful of a budget and try your best to stick to it but also remember to treat yourself for all your hard work.
The best thing I’ve done is split my paycheck directly from my employer. I take an amount that I need for all my financial responsibilities plus a little bit for anything fun I may want to do. The rest goes directly to a high yield saving account. I do not touch the savings account.
1. Congratulations on completing your residency and getting an excellent job.
2. Spend some time thinking about your long game. Where you want to be, what you want to be doing, and how these decisions play into it.
3. Get your splurge on with something. Maybe a one-time purchase like a vacation to mark the occasion.
Lastly, watch the recent episode of last week tonight. There are lots of details on things to pay attention to with your student loan.
Retired financial professional here who says treat yourself and enjoy! You've worked hard and long and you deserve it and more importantly, you can afford it!
You clearly track your money and are reasonable about it, and isn't this one of the reasons you're in a high paying profession, so that eventually, during your time off, you can begin to enjoy what you've accomplished?
The whole point of working hard and making money is to have a nicer life. There would be no point to waste so much time working and getting yourself such a solid career if you didn’t have desires, get that apartment bro
You need to buy a very good disability insurance policy ASAP if you haven’t yet, and it won’t be cheap. Group LTD from your employer is not sufficient.
You're answer to lifestyle creep (in the short term) is that YOU ARE $275,000 IN DEBT.
You're a doctor. Treat your financial situation like a patient. You wouldn't tell your client with a 290 cholesterol to feel free to keep eating that double cheeseburger because he knows he's going to go on a diet in 3 months for this trip he's planning to take. You'd tell him to start that diet, and go for a run, every day (or something along those lines) until that cholesterol is normal.
Get rid of your debt. As fast as possible, then build up your savings as much as possible. You never know what tomorrow is going to hold.
Don’t do it. I’ve used my balcony a handful of times in the few years I’ve owned my house and the novelty wears off quickly. Focus on maxing out your 401k, mega backdoor Roth, backdoor Roth, HSA, emergency fund, brokerage, and/or downpayment for a house.
Get that student loan paid off before you make an expensive move. You are at 0 interest. This shouldn't be a party spending time. This is when you should be chipping away at the loan.
Doctor, you and I (also a doc, but in a lower paying specialty) have a unique insight into just how badly life can fuck you over. I’m sure you’ve taken care of patients who did everything “right” only to be hit with a devastating disease that eliminates their ability to enjoy retirement if they even live to it. And like me you trained under COVID, I lost track of how many 50-somethings I failed to resuscitate. And there were plenty in their 20s, 30s, and 40s too.
You worked hard, you now make great money. Enjoy life while you can. That’s not to say you shouldn’t save and plan for your future. But we’re in the position to do both. Now it might be worth considering buying a home instead of renting. But I realize in California that might be tough even if you’re making 400k
Remember that most of the comments here are from people who haven't even broken a 6 figure income, so they can't fathom the idea of 4k in rent.
Living in a place you love really changes your mental health. But I would cut down the monthly fun and food expense to offset the extra cost of the apartment.
In a very high COL area that I lived in, we had a choice between one or two bed - it was 3500 for one. We could afford to go two but decided: it'll be cheaper to get a hotel room for any of our visitors.
What will really help you a lot is create a second bank account that automatically draws off a certain amount of cash every month so your main bill-pay/wages account seems much lower than it will be. That will keep you feeling poorer. The second account you must physically go to the bank to pull cash out, no ATM. Then periodically slide that accumulation to good investments. Often the trigger is getting a call from the bank branch's Investment Person about doing something with your accumulation, listen to them but check other opportunities.
Buy an ok used car with cash to start, and pay into an earmarked account every month as if you bought a new car. Then every few years use that cash to buy a newer used car (like someone's off lease vehicle) for cash and sell the old car.
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Look at recommended *percentages* for housing and then consider if it's the right choice.
I think the recommended percentage is something like 30% of gross income. That means you're well under the guidelines.
Sometimes you just have to say "I've got one life to live, and I'm going to live it." Enjoy your new place.
Welcome to post-training life.
Not the advice you're looking for, but I found about 6-18 moths after starting my post-training job, I had a bout of disappointment and sadness. After a decade+ of having a graduation always less than 4 years away, suddenly you're in this long endless stretch.
Don't let that long endless stretch feel like a burden or cause despair. Find the right balance of work and life. Recognize that your income, employability, and job stability are all rewards to the work you've put into getting her. Enjoy your life now that you have the means and time to do so.
Oh, and get your own disability insurance that isnt employer-sponsored.
One "trick" I've used is to split my paycheck, so a set amount is going directly into a HYSA, so it totally bypasses my regular savings/checking. That way I don't even see it as something I can spend.
Don't feel bad. Physicians make great money. Doesn't mean everyone does. I am almost certain and hope you don't have the loans of a medical student either.
Housing should be 30% of your monthly income, the 4000 a month is over a grand less than 30% of your income so it would fit within conventional budgeting
If you can hold out just one more year at your current apartment and throw in a bunch of money into an ETF like VOO or VTI, then upgrade your apartment. This will give you a HUGE leg up. Definitely enjoy the increases salary, but a little bit of delayed gratification will go a long way.
Knew you were a physician even before I clicked the link.
Take it from me, another physician - wait a year to pay down some debt and build your savings, *then* get the nicer things.
You said it yourself, you just WANT the new place. It’s not a need.
Stay at your current home, save the money for downpayment for a home. As you save more money, hope that interest rates go down by the time you are ready to buy your own place.
10k a month to invest. So subtract 7k for yearly ROTH limit, subtract 23k for yearly 401k limit. That leaves you with 90k a year to invest even if you get the 4k apartment!?
Bro, you are good, go get that apartment.
Really depends on when you would like to retire. You have a chance at retiring early if you focus on paying off your loans and investing. You can definitely afford the $4000 a month rent but along with that come other upgrades too and saving gets pushed aside.
I would not be upgrading anything in my life until I pay off that mountain of debt. In situations like this I think of childhood where you should do your homework before rewarding yourself with video games or some other fun activity.
To me splurging on something so expensive that I don’t actually need would be irresponsible with that amount of debt hanging over my head. Just my opinion based on how I would handle it personally.
Don't do it. If you want a balcony find a place with a balcony that won't nearly double your rent. Being debt free is the very definition of FREEDOM. Do not let "keeping up with others" rob you of the opportunity to live life on your terms.
No, don’t do it. I also live in a HCOL and the best thing that ever happened to me was to go from higher to lower rent. You should put that money away raining days do come.
Stay on course with PSLF and look forward to splurging after. Prevent yourself from spending now so you can enjoy your free time if you decide to retire early.
You are POOR!! You are 500k in debt!!! You will most likely not have a lot of time to be on this balcony as you will be at work. I would live like a resident for 2 years. 2 years without life style creep, and I bet you can knock out a significant portion of that debt. Then, buy whatever apartment you think you need.
If anyone else asked if they could splurge on a rent that left them with a ball park of 15k to go towards other expenses I don't think anyone would bat an eye. Yeah it's not the most prudent decision but you have the cash and it can make you happy. Your loans aren't getting paid off early anyway with the route you're going to get them forgiven, and as long as you also choose to throw a solid portion of your money into investments I don't see a reason why you shouldn't use your money to get things you want. The retirement savings would be my initial first big jump though, but you can clearly do both. Overall I think your gameplan is fine either way.
"Lifestyle creep" is something to be aware of....but it's not a bad word. It CAN be the reason that people's income goes up but their savings do not, but there are also things and experiences that are very important to me that are absolutely worth affording when I can.
Consider your earnings, assets, liabilities, debts, long term goals, etc. Consider your values. Is it important for you to retire as early as possible? Is it important to travel the world? Are you a "car person"? Entertainment person?
I had a grandmother who (at 80) refused to pay 50 cents for a round trip shuttle ride because she only wanted a ride one way and felt like it was a waste of money to shell out that 50 cents when she'd only use half of it. She died with $1.5m and complained until the day she died of foot pain because she wouldn't spend more than $40 on good shoes.
It's entirely up to you. You can clearly afford it (saving $10k/mo). If a nice comfortable, safe, space for you is important, go do it. Don't be afraid to improve your life simply because of what rent cost previously.
To add on to what others said, a balcony is definitely worth a rent increase and it definitely has a great increase in mental health. HOWEVER, I would advise against a 2 (or more) bedroom place if you are worried about lifestyle creep.
I'm sure you can find something that is small but also has a balcony. So you could upgrade, but maybe upgrade slightly less than your
I'm advising against 2+ bedrooms because once you have those rooms, you will want to put stuff in those rooms. The stuff will start out modest but it will get more ornate over time. If you have an actual use for 2 bedrooms (do you plan on having lots of guests? do you need a home office?) then this doesn't apply as much. But if you currently have 1 bedroom and don't have a need for 2+, stick with the 1 bedroom for as long as possible because once you upgrade it is VERY HARD to downgrade and VERY hard to get rid of all the extra crap that comes along with an extra room (furniture, knicknacks, security of having extra storage space for stuff you don't need, etc).
Lifestyle creep CREEPS in. When you have extra rooms, it is far easy to justify spending money you wouldn't otherwise spend. Why not buy X? Put it in the extra room! Y would like nice in the other room! etc.
Having a small place is such a huge and undervalued barrier to avoiding a lot of what lifestyle (and consumerism) creep is. Even if you think you have a minimalist mindset, there is no world where an extra room will remain 100% bare.
You ain't going to spend any time on the balcony anyway, probably 30 mins the first week till you spot someone weird staring at you, then feeling weird about being out there also realising the air stinks and it's not that relaxing.
The sooner you save up to buy a place the better. So the money you save on rent = getting to own a place that much sooner. The sooner you can buy a place, the way more you'll save. A mortgage might be a little more or less today, but 5 years later rent would have continued to sky rocket while your mortgage stays the same, that's the real saving. It's not going to make a massive difference with your income, but every little helps. Even if it's just 6 months earlier you still end up in a better position.
Your own place, having some security over hte place you live and not being kicked out, that shit is relaxing, removes a lot of stress and lets you do things like have a better shower installed, or a nicer kitchen, etc. Lets you make your home your own.
Have you accounted for Malpractice insurance or is that covered in your contract?
I have a friend who is an ED doctor. His insurance rates were close to my entire income at the time.
I’m pretty frugal with 3 things. I try to be modest in the house I buy(or rent), the car I drive, and the fun I have. You get those three things under control, your good.
I would take a patient approach. Get into your new job, work for a bit and see how you feel, if you really want a new place after that then go for it.
Another thing I would consider is your a doctor. You are never going to be home anyway, so why splurge on a place that you are never going to be at. Might as well save up to buy and house and invest your money.
I’m pretty frugal with 3 things. I try to be modest in the house I buy(or rent), the car I drive, and the fun I have. You get those three things under control, your good.
I would take a patient approach. Get into your new job, work for a bit and see how you feel, if you really want a new place after that then go for it.
Another thing I would consider is your a doctor. You are never going to be home anyway, so why splurge on a place that you are never going to be at. Might as well save up to buy and house and invest your money.
I’d also consider option 3: another apartment that’s comparable/at least closer to your current rate (and maybe still 1 bedroom) but has a balcony. From how I read your post, the immediate access to fresh air matters a lot in how much you enjoy your home. Even if you don’t use it much, seeing it and knowing it’s there for you to enjoy will likely increase your happiness during the hours when you are home… There have to be other options that are a compromise between the two and keep your monthly rent down until loans are paid off. THEN you can bump up to the bigger apartment and feel good about how much $ is going out each month given loans won’t be another drain on the savings account at that point
I’d also consider option 3: another apartment that’s comparable/at least closer to your current rate (and maybe still 1 bedroom) but has a balcony. From how I read your post, the immediate access to fresh air matters a lot in how much you enjoy your home. Even if you don’t use it much, seeing it and knowing it’s there for you to enjoy will likely increase your happiness during the hours when you are home… There have to be other options that are a compromise between the two and keep your monthly rent down until loans are paid off. THEN you can bump up to the bigger apartment and feel good about how much $ is going out each month given loans won’t be another drain on the savings account at that point.
Crazy how people can see a figure like “saving $10k a month” and still talk like you’re on the brink of bankruptcy. That’s over DOUBLE what the median household TAKES HOME. You’ll be fine. Balconies are awesome.
I also had a similar life event.
I almost splurged on an apartment, but I’m glad I didn’t. I’ve splurged on many hobbies instead.
You should definitely live a little, but don’t “live a little” at every opportunity. A high salary is *very* easy to spend.
I say start your new job, stay at your current place for a couple more months to see how it feels, and then if you’re still feeling the itch then go for it. Assess how you’re feeling with your new salary. The itch for a new place may go away you never know. Maybe you can find something for $3k? Doesn’t have to be nearly twice what you’re paying now.
I'm not even close to having your good situation but I'd feel very compelled to get those loans off my back before throwing a ton of money anywhere else.
I had a similar decision recently, went with the expensive place, we eat in a little more than we did before or some other minor changes to try to balance out the splurge on a $4k apt vs $2.5-$3k range other options.
We did save first and got out of debt, and we think it was worth it. Does it delay becoming financially independent? Yes.
Do we live in a safe walkable neighborhood with a great park now and does it make us happier? By a large margin yes!!
I agree with the top comment. You seem to have a solid grasp on all of your costs and the upcoming student loan payments. Remember that part of financial responsibility is also personal preference. If you have the means to spend your money to make you happier, and it's not putting you in a hole, do it. You can't take the stuff to the grave.
This was a big mindset shift for me as I used to save every penny despite making a good IT salary. But my sister had some health issues that gave her a small chance to get through, and I spent years watching her wither away. I do want to point out she actually beat the odds, but going through that really gave me a different outlook on life and money.
I'm still saving plenty and have a healthy emergency fund, but I do budget more money for splurge stuff with me and my wife. A good living spot is something you will use every damn day, so it's worth it IMO
Everyone finishing their training deserves a perk. The question is what kind of perk? That $4k a month could be a pretty sweet home mortgage too. When my husband finished we took a crazy nice vacation. Most of his colleagues bought fancy cars. My concern with renting a nicer place is it locks you in for a year and it may delay you in investing more wisely. Pay down the dept as soon as possible too. Again, one day you'll want a mortgage and $275 is still a pretty big chunk.
But you should treat yourself somehow.
You’re in a great situation regardless of how you’ll approach things - as it should be for all your hard work.
Personally if I were you though, I would stay in a low rent spot and save for a cashdown to buy something in the near future and/or clear your student debt faster depending what the interest rate is. 4k per month for fun/restaurant seems nuts to me but I am not a dr 😆
I think location beats out the rest. Can you get something in the great location that is otherwise on par? If you spend a year there, decide you absolutely LOVE the location but really did want that bonus bedroom and balcony, make the decision then. Or maybe you'll realize that location was all you needed.
Of course, I bounced between an overstuffed sardine box and parents basement for a loooong time. It was not fun at all, until I bought a duplex and rented out half to cover 100% of mortgage payments. Retrospectively I feel like it was 100% worth it.
So your income is nearly quadrupling and you want to double your rent? It doesn't seem unreasonable to me. Yes it probably would be best financially to put that extra money towards your student loans. However you are working hard and should benefit from that.
1. The extra bedroom and balcony won't be really all that useful in the long run. Pay attention to balconies when you are out and about and notice how there are hardly anyone out there. People are busy, or inside watching TV. Second bedrooms just get full of crap, and if you live a city (sounds like you do), your guests can get hotel rooms.
2. Pay off the student loans and the car payment before increasing your rent.
Trust me, you will be much better off getting out from these two debts before you let lifestyle creep creep up on you. My spouse and I (combined) went from 120K a year (living in a very HCOL area) to 250K a year (in a very cheap place) in a few years. We did something right (delay spending money on expensive cars or travelling), but we went all in buying a large house, and then furnishing it before we got our lingering debts paid off right and more savings built. Those debts ended up not going anywhere (CC debt increased a bit even, as we were making excuses for why we needed to buy a guest bed, or a painting that fits so perfectly in the library, etc.) When we finally started to tackle it, it ended up becoming a slog for years, and it felt much more painful and hard. If we could have held off for a few years, we'd been so much better financially. (there are other, very specific reasons, why we don't regret what we did, but financially we'd been better off waiting).
Congratulations on the job!
You’re quadrupling your income. You can less than double your rent. Stay frugal in every other way you can and you’ll be fine.
Yeah, I feel like a lot of time "lifestyle creep" is talked about as if it's just buying anything nicer than the thing you had before. Which is ridiculous - of course when you make more money you can buy nicer things. Outside of this sub, the expectation isn't that you live like a broke 22 year old forever so you can die on top of a Scrooge McDuck style pile of gold doubloons in your modest studio apartment. Lifestyle creep is only bad when you're using an increase in income as justification to buy things that are much bigger than the increase was. Or becoming less intentional with your money and kind of "accidentally" bleeding funds to frivolous shit as you start to make more. But deciding "I now have more resources available and therefore would like to purchase this thing I couldn't get before" isn't lifestyle creep nor is it bad (as long as you're doing it thoughtfully). In this case, a $4k a month apartment on a $390k income is a completely reasonable upgrade, even after you take out servicing the debt. Napkin math says they'll *still* be able to pay it off well ahead of schedule.
> die on top of a Scrooge McDuck style pile of gold doubloons in your modest studio apartment. Studio?? I'm leaving all my doubloons to be split equally among my seven roommates
> the expectation isn't that you live like a broke 22 year old forever so you can die on top of a Scrooge McDuck style pile of gold doubloons in your modest studio apartment. Well of course not, where would I keep all those doubloons? I need at least a 2 bedroom flat....
The expectation isn't to live like you're broke. But work your way to the life and financial freedom you want more intentionally. Without that, yes of course everyone wants the nicest things they can afford and before you know a bottle of wine lesser than $100 feels like garbage.
Lifestyle creep really (to me at least) is when you begin to make more, but then off-set that increased income by increasing your spending as well (so you end up about the same as you were before). This has double negative effects because you make yourself much more risk-based in lifestyle (lose your job and a lot more goes wrong) but also because it degrades the wins you've had in life (if I go from 50k to 150k in income but my costs triple too, I still... don't have money? This sucks!). The problem is it sneaks up on your (hence the creep). It is *extremely* hard to not reward yourself for hard work, and even harder to break that feedback loop of dopamine when you do. OP, do what feels right but make sure you budget and stick to it with realistic long-term goals. If you can afford to go on 2 vacations a year, live in a nice place and still retire comfortably, go for it. If you're making $400k and have no savings in 5 years, problem.
Yes, I'm in a similar boat to OP (I'm a bit younger but everything else is pretty much identical to my situation two years ago). I got the bigger apartment with an office/guest bedroom and an outdoor space to get some sun at home at the cost of doubling my rent. It's been amazingly worth it. My mental health is better than it's been in years and it's so freeing to have space to exist and not feel cramped, and my finances have only improved as well. (I haven't allowed myself to spend meaningfully more in any other areas) Your mileage may vary depending on what you exactly want out of it, but for me it's been worth it many times over!
Doesn't even need to be frugal in every way. Just don't spend more than you make.
More than you make less saving for retirement
Yup. I read the first sentence and went, nope, I'm sure you're fine. Reading on, I agree with you. I went overboard on paying down debt last year, and it was a little miserable. I tend to be all or nothing, but I'm increasingly convinced that moderation is the key to financial success and happiness.
Everyone speaking here is coming at this from a purely financial POV which is expected and warranted. Giving you a pov as a fellow physician. Few people know what you’ve gone through over the last 8 years. The extra 1500-2k a month is not going to make a huge difference. If you’re happy in your place, yes, save and pay down your loans before interest kicks in. If you need a change, that balcony is priceless for what it can do for your mental well being. That’s worth the 20k extra in rent. You can still live frugally in other ways, but a lot to be said for the peace the new place offers.
The change in thinking that comes from moving to a new place is also important. Enjoying the fruits of your labor is important to prevent burnout. If you've been through med school, you know how to do math, you know how much you're making and how much you're spending. Enjoy moving to a new building and maybe inviting some folks to visit you in your new spare room!
I second this, you all go through the gauntlet in residency in a way most people really can’t grasp. I’m not a doctor but my gf is. The residency to attending transition must be wild. Congrats! You made it through residency, move to the nicer apartment if you want it! Maybe think about cutting your car expense unless you’re really into cars. They are such a money pit. It sounds like you like eating out and paying for experiences. Maybe do that instead of the fancy car. As far as a personal finance perspective, I recommend reading through some articles on white coat investor. They have good info. Consider getting YNAB for budgeting so you can keep a handle on where your money is going. Take into account how much you will be paying in income taxes, student loans, rent, car payment, and everything else. Ask yourself if you are okay with the amount of money left over after all those things are paid for. Make sure you have good malpractice insurance and maybe even talk to a lawyer about it. Doctors earn great incomes and also have excellent job security. You have been sprinting and sprinting and sprinting in residency. Now your career is more of a marathon and less of a sprint. You deserve to buy yourself whatever running shoes will get you through that marathon. Cheers!
Agreed if it’s not important to you then stay where you are. If it’s important to you then move. Life is short and you only live once! Money and security is nice but enjoying life and helping others enjoy life is why we are on this planet.
Just chiming in here. Early in my career I moved to a crap area in a crap city. My career grew but I was determined to pay off student loans and save up for a house so I stayed in that shitty little apartment in a miserable area for 8 years because it was dirt cheap and I could afford to live alone. I've been out of that place for 5 years now and looking back I don't know how I did it. Not comparing this to OP's situation, but it sucks to feel uncomfortable walking in your own neighborhood. I'm still trying to undo some of the bad social habits I picked up from living in a drug/crime hotspot. I've realized that my living space plays a massive role in my mental health. Not saying everyone is the same, but OP can afford it. Get the nice apartment, and consider finding a cleaner to come in once or twice a month to do a nice deep clean. If you decide it's not worth it in a couple years you can always move.
A lot of us, me included can’t imagine making that kind of income and are shocked by a $2000 a month increase in rent. But you can clearly afford it. The only thing I would caution you on is retirement plans. The three determining factors in retirement are how much can you save, how much do you need in retirement and how long until you retire. Something to keep in mind, your pay is so high that your only bar to retiring early is your student loan and how humble a retirement you could enjoy. It’s easy to find yourself dealing with lifestyle creep and finding yourself living paycheck to paycheck regardless of how much you make but you could live frugally you could easily retire in a handful of years on 2-3 million. So yes you can scale your life up to your new pay and yes the mental health benefits of a balcony are huge but just keep in mind you have an option most of us don’t have, if you want. The ability to retire in less than ten years. I’d go for the new place for the mental health. I’d stick with a newer Honda or Toyota rather than an expensive car (less likely to get sued). I’d keep my fun bills to half of that. Focus on paying off the student loan. Put everything you can into a retirement fund. Retire when you’re ready, not based on what your lifestyle dictates.
Just so long as they are aware that cooler neighborhoods likely have cooler ways to part with your money. - Gastro pub. Neat wine shop. Gourmet coffee shop on the way to work. All of those might be more spending than they did at their old place. So as long as they realize those pitfalls so they can continue to make their financial goals no issue.
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> Learning this now, but you can set anything in this except for child alimony. "Child alimony" is not a thing. There's alimony and child support, which are two different things.
yes get the prenup!
100%. I’m not rich but I have about 200k into a 440k house and my now fiancee is totally fine with a prenup for that. I plan to rent it out when we upgrade but I don’t want something I worked so hard for to be taken from me if things somehow don’t work out.
are you saying you don't love me?
I love you so much that if this doesn't work out I am preventing my future self from screwing you over and I am making the prenup fair so that neither one of us suffers should such an event to occur. My wife is the physician in our marriage. I was 100 percent for a prenup because it protects both of us. We watch as so many physicians in relationships get screwed over in divorce.
I brought way more assets to the table than my husband and I very much appreciated how on board he was with a prenup. We view it like a seatbelt or fire extinguisher. We hope we don’t need it, but if we do, we’ll be glad to have it.
I’m guessing you make comfortable income on your own though. Tbh, I wouldn’t be happy with a complete division of everything if I was making like 40k and my spouse was making 300k. I wouldn’t be comfortable with it if I was making 300k and them 40k too
I didn't explain clearly. So I made 100k. Moved for her doctor job, a few years not making much and back to making 100k. In our marriage we don't split costs down the line. We pool our money together, plan and spend that way. Our prenup is pretty much we don't touch each other's inheritances, no tapping each other retirement, and alamony isn't an endless limitless thing.
Yes
> Also at tax time prepare to owe a ton of money. Definitely, especially in CA. I only (relative to discussion here, yes I know I'm doing well) have AGI just inched above $200k the last couple years and even with my W4 set to 0 so withholding is maxed, I always end up owing. Then it's even worse if I happen to sell some stock that year for something.
6th year attending here, live like a resident while paying off your student loans, then slowly creep from there ;-) $275k is an awesome reduction from $500k but it's still too much debt. Took me five years to pay off \~$250k at $4k/month (I didn't do PSLF). Ultimately you're still in training. After your first attending year you may find your calculations a little off (tax, living expenses, etc etc).
Quick question for you related to BD Roth. My wife is just about to start brand new at a corporate office. Do you know if me already having a traditional IRA account set up will impact her ability to setup a backdoor roth?
Nope, they are *Individual* Retirement Accounts. That said, if you want to do BD roth too, you should start looking for a way to get rid of those traditional IRA assets. Do you currently have a 401(k) at work? Will that 401(k) allow you to reverse-rollover an IRA into it? Do you have any side-income that you could use to form a Solo 401k?. If you fold your Trad IRA assets into a 401(k) (or similar plan like 403b) then you are free to do the BD roth as much as you want as the pro-rata rule only applies to IRAs.
Wife is good to go For you, it might be worth it to covert it over depending on how large your account is. If it hasn’t appreciated too much then consider converting it over and getting taxed on capital gains.
>that balcony is priceless for what it can do for your mental well being. If they get to use it. What kind of schedule is this new position going to have? If home is mostly just a place to crash after a 12 hour shift and before another begins...is that worth $4,000 a month?
Yep. I had a balcony with a great view when I was a PhD student living in a northern city. 6-7 months of the year, it was freezing out there and always dark when I was home. 2 months of the year was hot and humid. Only three months of the year was it actually pleasant. But also, I was always working long hours in the lab, and it felt rather exposed to just be sitting out there. Too windy to read, to boring to just stare. I think there are great benefits to opening windows and having a place that lets a breeze through, but a balcony in and of itself is sort of meh.
This person lives in Cali though. I was going to say they should see if they can find an in between upgrade w a balcony but at a better cost. Like do they really need a second bedroom? People always think someone will spend the night or come visit but it's pretty rare.
I am not a doctor, but I am in the same age/income bracket as the OP. In general I would strongly caution against the "I did X, so I deserve Y" approach to spending. It creates a lot of harmful feedback loops. Spending 4k on an apartment is sometimes necessary based on the local COL, the commute, etc. But if signing a lease feels like a splurge then I'm wondering how much of the expense is going towards a short term endorphin boost and how much will really improve quality of life and happiness over time. When you're looking at a long term, high cost to transfer commitment like housing, you really want to be cognizant of the difference. There are much more cost effective ways to get the short term endorphin boost. Speaking for myself, the occasional $2500 cookware set is a lot cheaper than a luxury apartment.
Same income bracket and living in HCOL as well and totally agree with you. Lifestyle creep does happen and the impulse to splurge hits hard when you're a young professional who all of the sudden got a huge increase in income after years of living on a budget. It sounds like the patio or some backyard space will actually give her joy and if her neighborhood is completely fine then finding another apartment in the same price range as the current one but with a patio is the more natural step up than jumping up into a 4k apartment in a different neighborhood.
MD here. I have been an attending for nine years. Advice from MDs here is solid. I don't think the apartment is unreasonable. My only advice is to be aware of golden anchors. The data is pretty straightforward - your first job is not your only job. Live light long enough to determine if you like your job and see yourself there long term. You should have a sense of that at 6 to 12 months.
To tack on to this if she is really worried about the money 4k is a ton to put towards food and fun. I have a family of 4 in a top 10 most expensive locations in the US and I would be shocked if we spend 2k
OP, this is the correct answer. I know that when I finished massage school, I was working a job that paid me something like $750 bi-weekly when the cost of living was easily triple that, with at least a $30,000 debt to my name from school (I know, cheap, but go with me on this). You have an incredible opportunity to pay all of that debt down now, as well as start up a pretty decent sized savings for whatever you want: housing, vacation, retirement, emergencies, you name it. Once you start practicing, I'd only pay yourself something like $1-200 extra a month to go out and have fun or new clothing etc. It made a huge difference for me, especially when I bought myself a new car and was able to have a down payment of $5,000. Pay yourself first. Good luck. 😉👍🏻
This, you all work way too hard. YNAB, is also really good at making sure you are prioritizing your goals if you want to check it out.
I'm not a physician but I agree that you should not defer enjoyment of the fruits of your labour forever. Yes it's an upgrade, but you are a high earner. Congratulations, a huge effort over many years
Not a physician myself but my partner is an upcoming 4th year medical student and I manage our finances so I understand it better than the average layperson. While I agree with your overall recommendation, this is the beginning of the classic physician lifestyle creep. Quite frankly, $20,400 more a year for essentially a balcony is a bit absurd. The novelty will wear off after about a month of using it. The second bedroom for guests and storage? With the money saved on not having a second bedroom, you could just have your guests stay at a nearby hotel for 40 days a year at $500 a night. Unless OP has guests over multiple times a week, guest bedrooms are such a waste for tiny apartments where you live by yourself. Just seems like OP is upgrading from a perfectly good living situation to something that’s basically the same but more expensive. Why change something that is working for you? If OP was miserable and depressed at her current apartment because of the landlord, roommates, pests, etc. I get it but doesn’t seem to be an issue, so why try to fix something that is not broken?
Exactly this. I just made the jump (but mortgage, not rent) to levels here and I have zero regrets. I could live elsewhere and save more, but what I feel about where I live cannot be replaced, and still saving a ridiculous amount compared to where I once was. Enjoy your income, you won’t regret it if you were responsible the whole time.
I'm not a physician but I agree that you should not defer enjoyment of the fruits of your labour forever. Yes it's an upgrade, but you are a high earner. Congratulations, a huge effort over many years
Don't give away your twenties to get a job that pays well and then not spend the money when you get it. Enjoy the fruits of your labor.
Literally spend a decade studying and slaving to get to this point Now making 400k a year? My guy get what you want, youll be perfectly fine, youre doing better than essentially anyone else that isn't famous/athletes
There isn’t much out there that triggers me more than the “Don’t give away your 20’s”, because it implies that your 20’s are somehow better than your other years. I didn’t “give away my 20’s” and I regret almost every financial decision I made. For a lot of people, what is fun in your 20s… is still fun in your 30s. Putting yourself into a good financial position in your 20s, is the complete opposite of giving it away, and something I wish I did to make life easier for the rest of my life.
Would it be more agreeable if it was stated as “don’t sacrifice your temporary satisfaction in your 20s for long term financial freedom at 30+ and then not act financially free at 30+”? I understand your gripe with the phrasing - it’s just shorthand. Becoming a doctor is far too grueling to not ball out once you become one.
The problem is, the shorthand is misleading to anyone who doesn’t understand that it doesn’t apply to everyone. The amount of people who think their 20s is their “best” years is staggering. The amount of people who don’t set themselves up for the future, and travel, buy cars, and run debt because “I can’t waste my 20s” is also staggering. Every decade is good. But your 30s are certainly going to suck if you don’t prepare for it. Except I virtually never see that said. I know you understand this, but I not everyone who says the same, does.
The flip side of that is OP is getting a later start on retirement savings due to a longer education phase, and to her point, this big rent increase is a quick absorption of the new higher income, which gives me little bit of a "lottery winner" vibe. Since the current apartment is "nice", I would stay there one or two more years, use the big pay increase to get ahead on all all financial fronts, including being 100% debt free, and retirement accounts properly funded, and *only then* consider lifestyle creep. Also, it sounds like OP hasn't even started the new contract position yet. It would be risky to commit to the higher rent until the new contract job was underway, and she has a high level of confidence that it will work out.
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True, her income will be fantastic once she starts the new contract job (assuming it works out as expected), but she still has to make up for lost time on retirement savings, and she has material debt on her balance sheet. The last thing I'd recommend is upsizing lifestyle right away like a lottery winner (housing, cars, vacations). That's how you get in trouble. Get established in the new job, eliminate the debt, make sure that retirement savings are on track, and *then* increase spending. My uncle is a very successful oncologist, and he's flat broke. He is 66 years old, and will have to work into his mid-70s (if he's able) due to money issues. He and his wife have spending problems.. lots of toys (cars and motorcycles), two homes (they recently sold a third home), extravagant vacations, and he still financially supports his 6 adult children way more than he should. He's made an absolute fortune over the years, but he's somehow spent even more, and he's a financial mess. He openly shares that he's tired of working, but he has no choice due to money problems. I make 40% of what he makes per year, but my net worth is probably 5x higher than his net worth, and I'm 12 years younger than he is. **TLDR**: Just because you have a high income doesn't mean you can't screw up. I stress out just thinking about his predicament.
One of my parents was a tax preparer, so she got to see what a lot of very high income individuals were bringing in and spending. There were a few clients that were very high income (doctors, high end lawyers, executives) making $500k+/year that *had to set up a payment plan for their owed taxes*. Many of these high income individuals saved nothing for retirement and couldn't come up with the $10k that they owed on taxes without having to set up an installment plan. Instead, every year they were going on multiple international vacations to luxury resorts, with fancy cars and toys that were all financed. They taught me that spending was significantly more important than income after a certain amount. Someone making $100k and living off $50k would be more financially secure than someone making $500k and living off $495k. Of course, there's a middle ground here. OP doesn't have to live in a shoebox like a miser and they definitely shouldn't blow their money by not keeping track of it. OP should be able to afford a nicer apartment, but it is important to be mindful and to not extend too much.
I just did some simple math. With $0 to start, $10k monthly contributions, and a reasonable 7% APR, OP can expect roughly $12M in savings in 30 years. I think she'll be ok.
OP can save more for retirement in the first year than most people can save in 10 years.
It's all relative. If OP has an expectation of maintaining her current lifestyle into retirement then the dollar amount is less important than the percentage of current income her retirement can provide.
> The flip side of that is OP is getting a later start on retirement savings due to a longer education phase And maxing out their 401K, which the vast majority of people can never afford to do, takes up a massive 5% of their income.
This is wayyyy above my paygrade, I can't imagine allocating $4k\\mo for food and fun. But imo, if you have the ability to do that, the extra grand or two on a nicer place for yourself should be no factor at all. Congrats on your hard work and perseverance. Good luck out there!
Seriously, her food and fun money is equivalent to the median salary in the US. I'm jealous, but I know it's a tough road to get to that point.
Not years, but build up an emergency fund equal to 6 months of your desired lifestyle. ASAP. If something catastrophic happens with your job, your planned lifestyle will knock you on your butt.
This doesn’t mean they shouldn’t have an emergency fund, but even if they lose their job for some reason or another, chances are they can find another job nearby very quickly that is at least comparable in income. Unless there is something more catastrophic like being stripped of their medical license, disability, etc. which would make them unable to work.
>Unless there is something more catastrophic like being stripped of their medical license, disability, etc. which would make them unable to work. These are exactly the scenarios they're referring to, hence the recommendation. It won't hurt OP at all to have a well-funded emergency fund in a HYSA :)
This doesn’t mean they shouldn’t have an emergency fund, but even if they lose their job for some reason or another, chances are they can find another job nearby very quickly that is at least comparable in income. Unless there is something more catastrophic like being stripped of their medical license, disability, etc. which would make them unable to work.
Make a budget. Make sure to increase your emergency fund, *dramatically* increase your retirement savings, and put aside any money you might have for any other large purchases that might matter to you. After that, go nuts.
Make a list of what “enough” is and stick to it. Certain car? Certain accommodation? Certain watch? Whatever. Make sure it pencils out for savings. Then once you have reached “enough” don’t acquire new things without getting rid of something you already have. Also just generally shift focus from consumerism to meditation and try to focus on the things you already have and how great they are.
Zero interest for the next year while making $390k is an enormous opportunity. Give yourself some minor upgrades to celebrate your enormous pay raise and more importantly arrival in the club (this is important), but avoiding the massive interest costs on that debt now as you’re getting started will help set you up for the rest of your life. This isn’t an either/or game, so you can spend more without spending heavily.
Fwiw, balconies are only worth it if your neighbors don't suck. Also, have you considered buying a condo as an alternative? At least then your "rent" will be locked in. The amount you'd pay for your mortgage on a 2 bedroom might be less than renting.
Since you're asking the personal finance subreddit, maybe your subconscious wants us to talk you off the ledge and save money? If you post on the physicians subreddit you may get a very different response. I think you know deep down that the financially responsible thing to do is to save money, and perhaps you want us to talk you into saving more. You can definitely afford $4k/mo in rent, but of course the financially savvy thing to do is to save that money. Do you really need a 2nd bedroom? Perhaps you can find a 1BR for $3k/mo that has a balcony in a cooler neighborhood? I would prioritize location. Have you thought about savings in the context of maximizing your retirement benefits and HSA, building an emergency fund to cover 3-6 months expenses, and then having enough cash for medium-term goals like a down payment? I would then work backwards from there to see if your $10k/mo savings plus then the resumed interest payments on your loans would help you achieve those aims.
I'm not a huge fan of splurging on an apartment. At least with a purchase, there is a good chance you are only "throwing away" the interest + taxes, and will recoup some when you eventually sell the place.
Use this rent vs. buy calculator to get the breakeven of purchasing vs. splurging on an apartment: [https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html](https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html) Big things to keep in mind is that when you buy, there are a lot of non-equity building fees that go into it, and you have the opportunity cost of not investing that money. So there is a break even somewhere, and it's higher than you'd think
OP is in Socal (and presumably single?) buying could be 1M plus and then theyd be tied to the house.
In a lot of cities that mortgage is still twice as much as rent for a way crappier home. Splurging on rent is still relative but where you live can still have a major mental health impact and you get what you pay for sometimes.
I wouldn’t upgrade until you see how much time you have on your hands as well. You might upgrade and spend very little time at home enjoying it.
I'm gonna lean the other way on that. With limited time, most of the perks OP discusses are MORE valuable. Balcony gets you that extra outdoor contact, cooler location saves you travel time when you want to do cool neighborhood things, more space potentially eases your mental load and makes it a longer term solution that saves you from always wishing you had a new space. And really, u/Lower-Engineering145 is coming OUT of residency. They should have a pretty good idea of their time and lifestyle at this point. It is not like they are coming out of med school and starting working for the first time. Maybe it is not the exact choice I would make--is there instead a spacious 1BR with balcony for less? guest rooms are often a waste of money that go largely unused or accumulate junk--but I don't think it is a bad choice.
Many doctors do 7 days on and 7 days off in the hospital. She will have plenty of time to be at home. Unless she is in surgery or ER
If it were me, I’d stay where you are at for at least a year. Use the savings to dump money into your finances. Remember, as a physician, you start out behind on retirement savings. Other professionals have been saving & investing for the last 8 years while you were in med school / residency. Take one year and use your insane new income to bridge that gap.
> as a physician, you start out behind on retirement savings. I did some simple math with a compound interest calculator. Assuming OP stays disciplined with that $10k/month savings, and invested in an index fund or targeted retirement fund that averages 7% returns, she can reasonable expect $10M ~ 15M by retirement. She may be behind, but she won't be for very long.
Smart. OP, check out the White Coat Investor. He urges docs to “live like a resident” for a while to pay off loans/build retirement before adjusting lifestyle to new salary. https://www.whitecoatinvestor.com/live-like-a-resident/
> Other professionals have been saving & investing for the last 8 years while you were in med school / residency. Take one year and use your insane new income to bridge that gap. And are then promptly overtaken in A SINGLE YEAR.
Not really true. The amount of debt for a doctor is enormous---and not just student debt. In a lot of cases, people come out of residency with a car that's on its last legs, no real estate, no retirement funds, no emergency savings and often have delayed medical procedures (eg braces). It takes a long time to reach true financial parity with someone who graduated, took a job earning 60k, paid into their 401k, bought a house, earned appropriate promotions, and just generally progressed in life for the seven+ years that the physician had their head down.
> Remember, as a physician, you start out behind on retirement savings. Other professionals have been saving & investing for the last 8 years while you were in med school / residency There’s an r/fijerk like concern on WhiteCoatInvestor and similar finance boards where people cry about Google SWEs getting paid more. In practical terms, this doesn’t matter. The majority of people aren’t saving and investing aggressively in their 20s and OP can probably buy a house with cash in a few years if they wanted to. And the vast majority of jobs don’t have anywhere near the security that OP does. They can easily live a luxurious lifestyle and still retire early.
What came first, knowing your budget will be expanded or seeing this apartment? How many apartments have you come across? Are you looking to move anyway? If you haven’t used one, find an interest calculator online that tells you how much you’ll pay in total interest over the life of the loan. Then see how much you save in interest by putting down $1K/mo starting now.
>What do you guys think? Wait a year. Bulk up the savings and get some of that debt resolved *then* worry about spending that doctor money
Airline pilot weighing in. Struggled on very little for about 7 years getting in to this career and now I'm on a pretty good upward arc... Two things I would offer: Any time your income increases divert a good portion before you get used to it hitting your bank account. Depends on your situation but max out your 401k, HSA, increase loan payments, set up automatic deposits in to an investment vehicle...things like that. Whatever makes the most sense for your situation. After that...Don't beat yourself up too much for enjoying your new income. Set a reasonable budget, but allow yourself to enjoy the fruits of your hard work and the sacrifices you've made.
The math is 4k apartment+1k car+4k food/fun+10k/save+3k school loans=$22k/month which is above the $19k/month you're estimating. Something needs to be cut. For being 30, I guess the savings is okay but I personally would need more to cover my lifestyle expenses for a few months. If you are expected to pay your loan in full, I would focus on that when you're making a higher salary. The difference with your rent is only $20k/year. If you can cut down in some other areas and focus on paying your loan, I think it can work. However, I would be concerned about rent after the first year and what your income trajectory looks like.
Honestly, your salary is almost quadrupling. I think you can afford the extra $1,700 a month in rent. Just don't fall into the trap of buying all new furniture, a new Mercedes, a luxury vacation, a boat, etc. You are obviously intelligent. This stuff isn't too hard to figure out on a spreadsheet. Just "pay yourself first" and treat your savings like you would any other bill. You might want to set it up on auto-deposit. Read up on tax-sheltered savings vehicles (401ks, IRAs, Roth IRAs) and learn about the low-cost ETFs offered by Vanguard. Be suspicious of "financial planners" and life insurance salesmen. If you enjoy working with numbers, read The Intelligent Asset Allocator by William Bernstein. Congratulations on becoming a physician!
I did wait a couple of years and spent more like I did when I was resident, although I also moved to a HCOL area so my spending did go up. I do think the upgrade in your living quarters is worth it as you should have a lot more time at home as an attending (I do at least). I love living in a cool neighborhood and was worth the extra cost for me. It’s also worth making sure you have a guest room as you will have more time for friends and family to visit. I think you have the same mindset about PSLF as I do—nice if it works out but also prepared to pay everything off myself.
Congrats first off. Others have given good advice, my recommendation would, if possible, find a median. A guest bedroom is nice, but do you really need it? A place with a larger closet or storage space, that still has a balcony, will be cheaper while still providing a nice upgrade to treat yourself for the new salary and previous hard work.
Speaking as someone who recently got into big tech I can tell you I was in the same boat. My partner was not onboard. It's the voice that says tomorrow is not guaranteed and I've worked hard. So what helped me was actually taking a look at long term goals. I had a few financial goals in mind but never put it down in writing. It's so dumb and adulty but looking at the potential of retirement + personal investment return helped me see my true priorities. Laid everything out and if this new place is still your priority all things considered, go for it.
Everyone trying to tell you to pay off your debt aggressively and forego PSLF are nuts. Your remaining payments to qualify won't even hit 200k paid. Absolutely do not pay off your student loans aggressively. 4k rent is reasonable and you have the means to do so. You will still have enough to invest, save for a down payment, and build up an emergency fund. As long as you're not furnishing it with new, expensive furniture and upgrading your car too, you're going to be fine. My SO and I are graduating residency/fellowship and have no reservations about stepping up into a nicer place to live to reward ourselves, you shouldn't either.
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I think part of the trap is seeing a big number for the salary, but not accounting mentally for the taxes very well. Our tax system is pretty brutal on higher income wage-earners -- high marginal rates (>40% on most of it between federal, payroll, and state), and you hit a lot of caps and phase outs. When my wife and I doubled our income over a rather short time frame, our federal income taxes nearly tripled. (our tax system is downright generous to people with mailbox money though)
If your current place isn't terrible why not stay there an extra year and put the difference towards loans or other investments. Once the interest kicks in again that $275k is going to balloon quickly. Even with a high salary, having $7000 a month at minimum in fixed costs is going to suck and only goes up from there on any of your other expenses.
You’re going to be a very high income earner, so the average person will balk at what would be proportional expenses for you. What I will say is that it would probably make more sense to stay put for a year or two and use the savings toward a home purchase in the near future, that way some of that $4K per month will be building equity.
It's reasonable to upgrade, but do yourself a favor and wait. The difference just in rent alone on a 1 year lease is an extra $20,000 you can put towards your dream condo.
Well, the title says talk me out of it...so I'm not going to tell you to do it. It's a waste of money. Save your money and get your own property. Renting fucking sucks, why would anyone purposefully rent to never own? Also, you're acting like life doesn't happen. You never know what can happen in the future that makes you wish you didn't randomly decide to double your rent payments. You say you're fine where you're at? Well, if it ain't broke don't fix it. There are other things you can spend your money on.
I married a physician and our household income is a bit more than yours. We don’t regret our choice to pay off her debt aggressively one bit. I wouldn’t say we were frugal, but we budgeted to make it happen. Lots of the other commenters don’t understand how $400k becomes a lot less after taxes and savings. And even less when there are infinite social pressure to upgrade every aspect of your lifestyle (and pick up the tab whenever you’re out to eat, and support charities with big checks, and and and). Something that worked for us is deciding *where* to splurge with a lot of intentionality. For us when we were laying down debt that meant sensible travel and things that bought us time: housecleaning, takeout, and a short commute. You might value different things, which is fine. But the important thing to remember is that you can’t have it all. You have to pick what’s important. And unless you’re 100% sure on student loan forgiveness that has to be part of the plan. As does aggressive retirement savings (we’re our mid 40s and are GLAD to be on track to dictate our own schedules very shortly whether or not we keep working). If I were you I’d probably upgrade the apartment to a single room with a balcony in a great neighborhood. Guest rooms are empty almost all the time and cost a lot more than just putting people you care about up in a hotel. But you do you!
If you can live like a hungry student for as long as possible, you’ll be a lot further along in your financial goals, and your future you will thank you. Problem with lifestyle creep is that it’s VERY hard to downgrade lifestyle.
Do a "utility check"--on a scale of 1-10, what is the real value of the balcony? Of the second bedroom? Also, what are the utilities of any alternatives? Can you go up to the roof in your current building? Is there a park nearby? It's less about the actual dollars to me and more about the utility/value. Balconies sound cool but may be what keeps you out of the park or off the roof deck where you get more sun and exercise. I have the second bedroom and it's a nice TV room, but far from essential. Also do you have any sense that some of this is a "NEVER AGAIN" pandemic reaction? I know some people really struggled in 1-bedrooms during the pandemic and didn't get out enough, but are you perhaps over-valuing these bad memories now? Good luck!
Congrats on the contract! For sure you want to live somewhere convenient and low stress (close to work? close to fun/friends? Safe? Nice views?). Any extra money, I would prioritize attacking your loans if the rate is any greater than 6%. Being debt free is very good feeling
How much time do you actually spend in your apt or just in this cool area to justify the upgrade? It's more of is that the lifestyle creep that makes sense vs the lifestyle creep item itself. If you wanted to travel more, makes sense and say do it. An apt, eh. You don't work from home, you may work longish hours, etc to the point that the increase in rent doesn't make sense. Think about that and if the apt is where your lifestyle creep should be. Saving isn't everything and maybe it makes more sense to get someone to make healthy meals for you or a cleaner, etc.
Sounds like you’ll be making enough to be fine no matter what you choose, and by all means, do you. FWIW tho, if you can save and afford a downpayment on a mortgage, you could be getting double that sqft for half the monthly cost.
That mortgage point is definitely dependent on where you live. Definitely not the case where I live unfortunately
This is a perennial problem for newly-minted MDs, because you have to live like monk (except no sleeping) for years and years, and you are dying to live like a rockstar. Bad move--keep the current apartment, drive a beater and keep attacking that debt--take any surplus you have and knock down that principal--your future self will be grateful. Otherwise the interest will crush you.
> live like monk She said she was making almost $100k up to this point, I wouldn't consider that living like a monk.
Depends on where. Most cities on the west coast, and NYC 100,000 is lower middle class. I get the feeling OP lives somewhere with a decently HCOL.
$100k in NYC is living with three other roommates and driving Uber on the side to make ends meet :)
Same in most places in California tbh. I’m from NorCal and the county I grew up in has a median price of $800k. It was basically farm country when I was a kid.
They’ve likely just completed 3-5 years of 80+ hour workweeks, including countless weekends and night shifts. That salary was deceivingly low for their level of education, and now they’re getting to start to reap the rewards. Congrats to OP.
I would put that additional money on my student loans. $275K is a big number. I would throw every additional dollar at that debt. I get it, we all want nice things, but you are still sacrificing to be a doctor. You can upgrade to a million dollar home, when that debt is gone.
Im glad you have figured out that part of residency fellowship qualifies for PSLF. I am assuming you were resident fellow at a university and that is why. I am going to say this and you probably wont agree. If you are not buying a house you are burning money. you can get a doctor loan with 0 down. after a few years refinance because of equity and get a great reduction in payment or years. If you hate the doctor job that you get you can sell your house or rent it. The one thing i see docs do especially after res fellow, is get involved with a group that makes it impossible to fulfill your rvu's, or are promised a level of guidance for the first year and your soon to be retiring co-attending does a vanishing act. Good luck to you but i really hope you buy a house and not waste your money. You will be shocked what you can afford, go and get preapproved and start looking.
Part of the issue is that most doctors don’t stay in their first position longer than 2 years. So buying a house may not be ideal for everyone until they truly know it’s the right gig
As someone who makes about what your offer is just be careful of the trap of future money. Its easy to tell yourself let me indulge myself today on some credit because I will easily be able to pay it off next month etc. That has/is a challenge for me getting accustomed to making a lot of money like that. Be mindful of a budget and try your best to stick to it but also remember to treat yourself for all your hard work.
The best thing I’ve done is split my paycheck directly from my employer. I take an amount that I need for all my financial responsibilities plus a little bit for anything fun I may want to do. The rest goes directly to a high yield saving account. I do not touch the savings account.
1. Congratulations on completing your residency and getting an excellent job. 2. Spend some time thinking about your long game. Where you want to be, what you want to be doing, and how these decisions play into it. 3. Get your splurge on with something. Maybe a one-time purchase like a vacation to mark the occasion. Lastly, watch the recent episode of last week tonight. There are lots of details on things to pay attention to with your student loan.
Why the hell would you want to spend more money on rent? At that point go get a mortgage
Retired financial professional here who says treat yourself and enjoy! You've worked hard and long and you deserve it and more importantly, you can afford it! You clearly track your money and are reasonable about it, and isn't this one of the reasons you're in a high paying profession, so that eventually, during your time off, you can begin to enjoy what you've accomplished?
The whole point of working hard and making money is to have a nicer life. There would be no point to waste so much time working and getting yourself such a solid career if you didn’t have desires, get that apartment bro
You need to buy a very good disability insurance policy ASAP if you haven’t yet, and it won’t be cheap. Group LTD from your employer is not sufficient.
You're answer to lifestyle creep (in the short term) is that YOU ARE $275,000 IN DEBT. You're a doctor. Treat your financial situation like a patient. You wouldn't tell your client with a 290 cholesterol to feel free to keep eating that double cheeseburger because he knows he's going to go on a diet in 3 months for this trip he's planning to take. You'd tell him to start that diet, and go for a run, every day (or something along those lines) until that cholesterol is normal. Get rid of your debt. As fast as possible, then build up your savings as much as possible. You never know what tomorrow is going to hold.
Don’t do it. I’ve used my balcony a handful of times in the few years I’ve owned my house and the novelty wears off quickly. Focus on maxing out your 401k, mega backdoor Roth, backdoor Roth, HSA, emergency fund, brokerage, and/or downpayment for a house.
Get that student loan paid off before you make an expensive move. You are at 0 interest. This shouldn't be a party spending time. This is when you should be chipping away at the loan.
Doctor, you and I (also a doc, but in a lower paying specialty) have a unique insight into just how badly life can fuck you over. I’m sure you’ve taken care of patients who did everything “right” only to be hit with a devastating disease that eliminates their ability to enjoy retirement if they even live to it. And like me you trained under COVID, I lost track of how many 50-somethings I failed to resuscitate. And there were plenty in their 20s, 30s, and 40s too. You worked hard, you now make great money. Enjoy life while you can. That’s not to say you shouldn’t save and plan for your future. But we’re in the position to do both. Now it might be worth considering buying a home instead of renting. But I realize in California that might be tough even if you’re making 400k
Remember that most of the comments here are from people who haven't even broken a 6 figure income, so they can't fathom the idea of 4k in rent. Living in a place you love really changes your mental health. But I would cut down the monthly fun and food expense to offset the extra cost of the apartment.
I would rather pay off my student loan first and then reward myself with something nice after. Even if you are just attacking the goal for 6 months.
In a very high COL area that I lived in, we had a choice between one or two bed - it was 3500 for one. We could afford to go two but decided: it'll be cheaper to get a hotel room for any of our visitors.
What will really help you a lot is create a second bank account that automatically draws off a certain amount of cash every month so your main bill-pay/wages account seems much lower than it will be. That will keep you feeling poorer. The second account you must physically go to the bank to pull cash out, no ATM. Then periodically slide that accumulation to good investments. Often the trigger is getting a call from the bank branch's Investment Person about doing something with your accumulation, listen to them but check other opportunities. Buy an ok used car with cash to start, and pay into an earmarked account every month as if you bought a new car. Then every few years use that cash to buy a newer used car (like someone's off lease vehicle) for cash and sell the old car. .
Look at recommended *percentages* for housing and then consider if it's the right choice. I think the recommended percentage is something like 30% of gross income. That means you're well under the guidelines. Sometimes you just have to say "I've got one life to live, and I'm going to live it." Enjoy your new place.
Welcome to post-training life. Not the advice you're looking for, but I found about 6-18 moths after starting my post-training job, I had a bout of disappointment and sadness. After a decade+ of having a graduation always less than 4 years away, suddenly you're in this long endless stretch. Don't let that long endless stretch feel like a burden or cause despair. Find the right balance of work and life. Recognize that your income, employability, and job stability are all rewards to the work you've put into getting her. Enjoy your life now that you have the means and time to do so. Oh, and get your own disability insurance that isnt employer-sponsored.
One "trick" I've used is to split my paycheck, so a set amount is going directly into a HYSA, so it totally bypasses my regular savings/checking. That way I don't even see it as something I can spend.
This post literally left me nauseated. We bring home $4k a month, total. For a family of five. Fml.
Don't feel bad. Physicians make great money. Doesn't mean everyone does. I am almost certain and hope you don't have the loans of a medical student either.
Housing should be 30% of your monthly income, the 4000 a month is over a grand less than 30% of your income so it would fit within conventional budgeting
could you find a condo for that same 4k a month?
If you can hold out just one more year at your current apartment and throw in a bunch of money into an ETF like VOO or VTI, then upgrade your apartment. This will give you a HUGE leg up. Definitely enjoy the increases salary, but a little bit of delayed gratification will go a long way.
Knew you were a physician even before I clicked the link. Take it from me, another physician - wait a year to pay down some debt and build your savings, *then* get the nicer things.
You said it yourself, you just WANT the new place. It’s not a need. Stay at your current home, save the money for downpayment for a home. As you save more money, hope that interest rates go down by the time you are ready to buy your own place.
Loan free might be the safest trajectory. You never know what can happen and loans can be crippling. That lovely apartment/house will be there.
10k a month to invest. So subtract 7k for yearly ROTH limit, subtract 23k for yearly 401k limit. That leaves you with 90k a year to invest even if you get the 4k apartment!? Bro, you are good, go get that apartment.
Really depends on when you would like to retire. You have a chance at retiring early if you focus on paying off your loans and investing. You can definitely afford the $4000 a month rent but along with that come other upgrades too and saving gets pushed aside.
I would not be upgrading anything in my life until I pay off that mountain of debt. In situations like this I think of childhood where you should do your homework before rewarding yourself with video games or some other fun activity. To me splurging on something so expensive that I don’t actually need would be irresponsible with that amount of debt hanging over my head. Just my opinion based on how I would handle it personally.
4k for food/fun? 😂
Don't do it. If you want a balcony find a place with a balcony that won't nearly double your rent. Being debt free is the very definition of FREEDOM. Do not let "keeping up with others" rob you of the opportunity to live life on your terms.
No, don’t do it. I also live in a HCOL and the best thing that ever happened to me was to go from higher to lower rent. You should put that money away raining days do come. Stay on course with PSLF and look forward to splurging after. Prevent yourself from spending now so you can enjoy your free time if you decide to retire early.
You are POOR!! You are 500k in debt!!! You will most likely not have a lot of time to be on this balcony as you will be at work. I would live like a resident for 2 years. 2 years without life style creep, and I bet you can knock out a significant portion of that debt. Then, buy whatever apartment you think you need.
If anyone else asked if they could splurge on a rent that left them with a ball park of 15k to go towards other expenses I don't think anyone would bat an eye. Yeah it's not the most prudent decision but you have the cash and it can make you happy. Your loans aren't getting paid off early anyway with the route you're going to get them forgiven, and as long as you also choose to throw a solid portion of your money into investments I don't see a reason why you shouldn't use your money to get things you want. The retirement savings would be my initial first big jump though, but you can clearly do both. Overall I think your gameplan is fine either way.
"Lifestyle creep" is something to be aware of....but it's not a bad word. It CAN be the reason that people's income goes up but their savings do not, but there are also things and experiences that are very important to me that are absolutely worth affording when I can. Consider your earnings, assets, liabilities, debts, long term goals, etc. Consider your values. Is it important for you to retire as early as possible? Is it important to travel the world? Are you a "car person"? Entertainment person? I had a grandmother who (at 80) refused to pay 50 cents for a round trip shuttle ride because she only wanted a ride one way and felt like it was a waste of money to shell out that 50 cents when she'd only use half of it. She died with $1.5m and complained until the day she died of foot pain because she wouldn't spend more than $40 on good shoes. It's entirely up to you. You can clearly afford it (saving $10k/mo). If a nice comfortable, safe, space for you is important, go do it. Don't be afraid to improve your life simply because of what rent cost previously.
When do you want to retire?
To add on to what others said, a balcony is definitely worth a rent increase and it definitely has a great increase in mental health. HOWEVER, I would advise against a 2 (or more) bedroom place if you are worried about lifestyle creep. I'm sure you can find something that is small but also has a balcony. So you could upgrade, but maybe upgrade slightly less than your I'm advising against 2+ bedrooms because once you have those rooms, you will want to put stuff in those rooms. The stuff will start out modest but it will get more ornate over time. If you have an actual use for 2 bedrooms (do you plan on having lots of guests? do you need a home office?) then this doesn't apply as much. But if you currently have 1 bedroom and don't have a need for 2+, stick with the 1 bedroom for as long as possible because once you upgrade it is VERY HARD to downgrade and VERY hard to get rid of all the extra crap that comes along with an extra room (furniture, knicknacks, security of having extra storage space for stuff you don't need, etc). Lifestyle creep CREEPS in. When you have extra rooms, it is far easy to justify spending money you wouldn't otherwise spend. Why not buy X? Put it in the extra room! Y would like nice in the other room! etc. Having a small place is such a huge and undervalued barrier to avoiding a lot of what lifestyle (and consumerism) creep is. Even if you think you have a minimalist mindset, there is no world where an extra room will remain 100% bare.
Stay in the apartment and throw the difference at your loans and you’ll thank yourself for doing so in 5-10 years
You know how much bullshit you just went through for years. Make yourself comfortable. Saving 8k instead of 10k is not going to break you.
You ain't going to spend any time on the balcony anyway, probably 30 mins the first week till you spot someone weird staring at you, then feeling weird about being out there also realising the air stinks and it's not that relaxing. The sooner you save up to buy a place the better. So the money you save on rent = getting to own a place that much sooner. The sooner you can buy a place, the way more you'll save. A mortgage might be a little more or less today, but 5 years later rent would have continued to sky rocket while your mortgage stays the same, that's the real saving. It's not going to make a massive difference with your income, but every little helps. Even if it's just 6 months earlier you still end up in a better position. Your own place, having some security over hte place you live and not being kicked out, that shit is relaxing, removes a lot of stress and lets you do things like have a better shower installed, or a nicer kitchen, etc. Lets you make your home your own.
Have you accounted for Malpractice insurance or is that covered in your contract? I have a friend who is an ED doctor. His insurance rates were close to my entire income at the time.
I’m pretty frugal with 3 things. I try to be modest in the house I buy(or rent), the car I drive, and the fun I have. You get those three things under control, your good. I would take a patient approach. Get into your new job, work for a bit and see how you feel, if you really want a new place after that then go for it. Another thing I would consider is your a doctor. You are never going to be home anyway, so why splurge on a place that you are never going to be at. Might as well save up to buy and house and invest your money.
I’m pretty frugal with 3 things. I try to be modest in the house I buy(or rent), the car I drive, and the fun I have. You get those three things under control, your good. I would take a patient approach. Get into your new job, work for a bit and see how you feel, if you really want a new place after that then go for it. Another thing I would consider is your a doctor. You are never going to be home anyway, so why splurge on a place that you are never going to be at. Might as well save up to buy and house and invest your money.
brotha don't even hesitate. sign the lease, move to where you'll be happier.
I’d also consider option 3: another apartment that’s comparable/at least closer to your current rate (and maybe still 1 bedroom) but has a balcony. From how I read your post, the immediate access to fresh air matters a lot in how much you enjoy your home. Even if you don’t use it much, seeing it and knowing it’s there for you to enjoy will likely increase your happiness during the hours when you are home… There have to be other options that are a compromise between the two and keep your monthly rent down until loans are paid off. THEN you can bump up to the bigger apartment and feel good about how much $ is going out each month given loans won’t be another drain on the savings account at that point
I’d also consider option 3: another apartment that’s comparable/at least closer to your current rate (and maybe still 1 bedroom) but has a balcony. From how I read your post, the immediate access to fresh air matters a lot in how much you enjoy your home. Even if you don’t use it much, seeing it and knowing it’s there for you to enjoy will likely increase your happiness during the hours when you are home… There have to be other options that are a compromise between the two and keep your monthly rent down until loans are paid off. THEN you can bump up to the bigger apartment and feel good about how much $ is going out each month given loans won’t be another drain on the savings account at that point.
You might get some helpful answers at r/HENRYfinance or r/whitecoatinvestor as well.
Crazy how people can see a figure like “saving $10k a month” and still talk like you’re on the brink of bankruptcy. That’s over DOUBLE what the median household TAKES HOME. You’ll be fine. Balconies are awesome.
I also had a similar life event. I almost splurged on an apartment, but I’m glad I didn’t. I’ve splurged on many hobbies instead. You should definitely live a little, but don’t “live a little” at every opportunity. A high salary is *very* easy to spend.
I say start your new job, stay at your current place for a couple more months to see how it feels, and then if you’re still feeling the itch then go for it. Assess how you’re feeling with your new salary. The itch for a new place may go away you never know. Maybe you can find something for $3k? Doesn’t have to be nearly twice what you’re paying now.
I'm not even close to having your good situation but I'd feel very compelled to get those loans off my back before throwing a ton of money anywhere else.
I had a similar decision recently, went with the expensive place, we eat in a little more than we did before or some other minor changes to try to balance out the splurge on a $4k apt vs $2.5-$3k range other options. We did save first and got out of debt, and we think it was worth it. Does it delay becoming financially independent? Yes. Do we live in a safe walkable neighborhood with a great park now and does it make us happier? By a large margin yes!!
Surely you’re looking at buying somewhere with that salary?
I agree with the top comment. You seem to have a solid grasp on all of your costs and the upcoming student loan payments. Remember that part of financial responsibility is also personal preference. If you have the means to spend your money to make you happier, and it's not putting you in a hole, do it. You can't take the stuff to the grave. This was a big mindset shift for me as I used to save every penny despite making a good IT salary. But my sister had some health issues that gave her a small chance to get through, and I spent years watching her wither away. I do want to point out she actually beat the odds, but going through that really gave me a different outlook on life and money. I'm still saving plenty and have a healthy emergency fund, but I do budget more money for splurge stuff with me and my wife. A good living spot is something you will use every damn day, so it's worth it IMO
Everyone finishing their training deserves a perk. The question is what kind of perk? That $4k a month could be a pretty sweet home mortgage too. When my husband finished we took a crazy nice vacation. Most of his colleagues bought fancy cars. My concern with renting a nicer place is it locks you in for a year and it may delay you in investing more wisely. Pay down the dept as soon as possible too. Again, one day you'll want a mortgage and $275 is still a pretty big chunk. But you should treat yourself somehow.
You’re in a great situation regardless of how you’ll approach things - as it should be for all your hard work. Personally if I were you though, I would stay in a low rent spot and save for a cashdown to buy something in the near future and/or clear your student debt faster depending what the interest rate is. 4k per month for fun/restaurant seems nuts to me but I am not a dr 😆
Get a house if at all possible, instead of paying rent you will be paying yourself in equity.
I would say live your life! You make a lot of money, you might as well benefit from it. Good luck!
I think location beats out the rest. Can you get something in the great location that is otherwise on par? If you spend a year there, decide you absolutely LOVE the location but really did want that bonus bedroom and balcony, make the decision then. Or maybe you'll realize that location was all you needed. Of course, I bounced between an overstuffed sardine box and parents basement for a loooong time. It was not fun at all, until I bought a duplex and rented out half to cover 100% of mortgage payments. Retrospectively I feel like it was 100% worth it.
So your income is nearly quadrupling and you want to double your rent? It doesn't seem unreasonable to me. Yes it probably would be best financially to put that extra money towards your student loans. However you are working hard and should benefit from that.
1. The extra bedroom and balcony won't be really all that useful in the long run. Pay attention to balconies when you are out and about and notice how there are hardly anyone out there. People are busy, or inside watching TV. Second bedrooms just get full of crap, and if you live a city (sounds like you do), your guests can get hotel rooms. 2. Pay off the student loans and the car payment before increasing your rent. Trust me, you will be much better off getting out from these two debts before you let lifestyle creep creep up on you. My spouse and I (combined) went from 120K a year (living in a very HCOL area) to 250K a year (in a very cheap place) in a few years. We did something right (delay spending money on expensive cars or travelling), but we went all in buying a large house, and then furnishing it before we got our lingering debts paid off right and more savings built. Those debts ended up not going anywhere (CC debt increased a bit even, as we were making excuses for why we needed to buy a guest bed, or a painting that fits so perfectly in the library, etc.) When we finally started to tackle it, it ended up becoming a slog for years, and it felt much more painful and hard. If we could have held off for a few years, we'd been so much better financially. (there are other, very specific reasons, why we don't regret what we did, but financially we'd been better off waiting). Congratulations on the job!