Whether you’re finishing school, starting your first job, or entering a new time period of financial responsibility, you’ve probably heard some version of: “Live like a resident.” It’s popular advice in physician finance circles—urging new physicians to keep their spending modest in the years following residency. Here at Tall Oak Capital Advisors, we think there’s something even more valuable to consider: what does living like a first-year resident mean?
In the medical world, a first-year resident faces long hours, modest pay, and high expectations—a period defined by discipline, delayed gratification, and intentional decision-making. While not glamorous or easy, this lifestyle builds a foundation of financial resilience.
New physicians understand that their lifestyle today won’t reflect their long-term earnings potential. They’re not buying luxury cars or oversized homes—they’re focused on surviving, learning, and investing in their future. This mindset of strategic restraint, even when more income is on the horizon, is powerful.
Whether you’re just starting in your career or transitioning into a new financial chapter (parenthood, relocation, self-employment, etc.), living like a first-year resident means:
• Prioritizing needs over wants
• Monitoring recurring costs
• Avoiding lifestyle creep
• Setting intentional savings goals—even if modest
It’s not about deprivation. It’s about stewardship.
The Pressure Hits Early—and So Does the Lifestyle Creep
A first-year medical resident earns roughly $60–70K, often while carrying hundreds of thousands in student debt. They’re working long hours, managing real-world responsibilities typically for the first time, and tempted to enjoy life without financial constraints.
The truth is that banks know this. That’s why physicians are often offered large personal lines of credit, sometimes before they’ve even earned a paycheck.
But here’s the danger: a line of credit isn’t income—it’s debt.
It feels like a safety net but can easily become a trapdoor.
The Line of Credit Trap
We see this often: a new professional upgrades their home, purchases new furniture or replaces a perfectly good car. And when a six-figure line of credit is offered, it seems easy.
But here’s what often happens:
- The line of credit funds lifestyle upgrades, not necessities
- Interest starts accruing quietly in the background
- Borrowing money becomes routine
- New expenses are funded (family, relocating, professional fees)
- And that LOC? It doesn’t disappear—it grows
Living like a first-year resident means resisting temptation. It’s choosing discipline over indulgence—not forever, but long enough to lay a foundation for financial freedom.
Your Financial Sieve: Are the Holes Getting Too Big?
Imagine your financial life as a sieve. Income flows in from the top, but undisciplined spending and borrowing can cause it to leak faster than you can fill it.
Some “holes” are necessary: housing, insurance, groceries. Others are self-inflicted:
- Monthly payments on a brand-new car
- Interest on that untouched line of credit
- Swiping a credit card because “I’ll make more next year.”
Managing the size of your sieve holes early is the key to preserving—and growing—your wealth.
Living like a first-year resident means:
- Spending with intention, not impulse
- Delaying lifestyle upgrades until your foundation is solid
- Tracking your expenses and sticking to a plan
- Avoiding lines of credit for lifestyle spending
- Building an emergency fund and automatic savings, even if small
This doesn’t mean living without joy—it means living with purpose.
Don’t Forget About Taxes
For many physicians, the transition from residency to practice includes becoming self-employed. This typically means taxes are not withheld automatically—and it’s easy to forget that not every dollar earned is available to spend.
Living like a resident includes accounting for tax obligations and setting aside funds yearly. Doing so can protect you from financial stress and help you prepare for tax season.
From Surviving to Thriving
Eventually, first-year residents become attendings. Their income grows, their hours improve (a little), and their financial flexibility increases. But those who thrive long-term often never fully let go of the disciplined habits they built during that first year.
At Tall Oak Capital Advisors, we work with clients at every life stage—from residency to retirement—and repeatedly, we see that the most financially resilient clients are those who adopt intentional spending habits early on.
You don’t have to be perfect with money. You have to be purposeful. Start small. Stay consistent. And keep your sieve in check.
Ready to take a more intentional approach to your finances?
Schedule a complimentary discovery meeting today. Let’s build a personalized financial plan that supports the life you want—today and in the future.
Meet us – Tall Oak Capital Advisors
The views expressed in this commentary are those of Tall Oak Capital Advisors as at the date of publication and are subject to change without notice. This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice. Statistics, factual data and other information are from sources Tall Oak believes to be reliable but their accuracy cannot be guaranteed. This commentary is intended for distribution only in those jurisdictions where Tall Oak Capital Advisors are registered. Securities-related products and services are offered through Raymond James Correspondent Services Ltd., member Canadian Investor Protection Fund. Insurance products and services are offered through Gryphin Advantage Inc., which is not a member-Canadian Investor Protection Fund. This commentary may provide links to other Internet sites for the convenience of users. Tall Oak Capital Advisors is not responsible for the availability or content of these external sites, nor does Tall Oak Capital Advisors endorse, warrant or guarantee the products, services or information described or offered at these other Internet sites. Users cannot assume that the external sites will abide by the same Privacy Policy which Tall Oak Capital Advisors adheres to.
