I started my master’s degree in public health before going to medical school. The courses I took in the program were incredible and I learned a great deal about how to improve community health. Unfortunately, I went into debt during the process. The program wasn’t cheap, and I hadn’t yet acquired the self-discipline to practice basic money management. Needless to say, I made quite a few financial mistakes. Although I learned valuable lessons, here are some things I would do differently if I could do the process all over again.
Reconsider where I live. Cost of living matters. As a young 22 year old who had just finished undergrad and had zero financial worries, I didn’t give much thought to the cost of living. All I knew was that I wanted to move to Washington, DC and use my newfound public policy degree to “change the world.” Although I did end up working in policy and doing some pretty cool things, I certainly did not change the world. What I did change, however, was my financial status.
Living in DC was incredibly expensive, especially for someone like me who had never paid a bill in my life. I was sharing an apartment that cost $1800 a month (not including utilities) and was a health policy intern barely making $10 an hour. It didn’t take me long to realize that I needed more income. After my dad refused to let me use his credit cards to cover my expenses, I soon got a second job working nights and weekends at a workout gym. Despite having two incomes, I still struggled. Although these hard times taught me grit and compassion for the less fortunate, life would have been much easier if I had moved to a cheaper city closer to my family and friends.
Avoid credit card debt and lifestyle creep. This much easier said than done. As a grad student with student-loans that seemed to always run out before the semester ended, I found myself running short on funds. Pair that with multiple credit cards and a lack of self-discipline and you’ll quickly see how I accumulated a substantial amount of debt in a short amount of time. For starters, I was living in one of the most expensive cities in the country (Washington, DC). Everything from groceries to basic public transportation was much more expensive than it was in the south where I was from.
Secondly, after 12 months of struggling, I had upgraded my jobs and was now getting paid almost double what I was making before. Although I was still barely making ends meet, I had so much more money in comparison to the year before that I upgraded my living situation. Instead of staying in my crappy, bug-infested apartment, my roommate and I upgraded to a sky-rise in the middle of the city. The hardwood floors and marble countertops were nice but came with a pretty hefty price tag…$2300 a month. Although I had started my masters degree and now had access to student loan money, I was using that money to pay for my expensive private school tuition at the Milken Institute for Public Health and naively relied on credit cards to fund basic expenses when the money from my jobs ran short. I would always tell myself that I would pay off the card at the end of each month, but sometimes that didn’t happened. There always seemed to be something else more important that I needed to spend that money on. At the end of the year I found myself nearly $4,000 in debt.
Make a spending budget. Part of the reason I started racking up credit card debt was because I had terrible spending habits. I had these terrible habits because I never had to make a budget before graduating from college. Even though I worked part-time in undergrad, my father paid for my room and board and even provided a small stipend for incidentals. Any money I made from my work-study went directly into my pocket to spend as I wanted. As a result, I created a bad habit of buying nice dresses and cute shoes whenever I went to the mall. By the time I moved out to DC and started working as a young adult, I kept that same terrible habit.
To make matters worse, I had no idea how much money I was spending. Sometimes I would go grocery shopping, spend $100 for a weeks worth of food, then still end up eating out at restaurants twice a week when I “wanted something different.” Occasionally, I’d travel out of town, go visit friends in other cities, or simply go back to Florida for a holiday. Again, I did all of this with no budget and ended each month wondering where all of my money had gone. If I could do it again I’d definitely create a spending plan and try to stick to a monthly budget.
Check your monthly account statement. Once I started med school, my spending habits changed. Not because I magically started creating a budget, but because I realized I needed to stop relying on credit cards and actually start paying off the balance quicker. I set up automatic monthly withdrawals to cover my credit card payment and tried my best to avoid buying unnecessary clothes at the mall. Although these were good changes, I had neglected to take a vital step….check the monthly credit card balance. This might not seem like such a big deal, but mistakes happen more frequently than we may realize.
Whether it’s a charge that showed up twice or a monthly payment you never authorized, it is imperative to check your accounts frequently. Even though I occasionally looked at my debit card balance, I never checked my credit card account history. When I finally did, I was mortified! I was paying nearly $70 a month for some added credit card protection I didn’t need and never remembered authorizing! Although I was able to call the bank and stop paying for that service, I was angry that I had such a high charge each month for something I never even wanted! As a struggling medical student, I could think of several other things I could spend that $70 on, none of which included handing it out for free to a bank. Ladies and gents, check your statements.
This is just part 1 of the financial mistakes I made in grad school. Stay tuned for part 2 of disastrous things I did with money before I got responsible and started paying back my bills. Tell me, what money mistakes did you make after college? If you could do things different what would you change?