Keeping Track of Every Dollar

A budget is simply a list of all of your income and expenses, totaled up. The real key is seeing where your money is coming from and going to on a regular basis. 

The two major categories are money coming in (income or revenue) and money going out (expenses or expenditures).  Income and expenses can then be broken down into additional sub-categories. At the end of the month, your budget should either end in a surplus (more income than expenses) or balance (with some money going into savings). 

The key is to know and understand where every dollar goes. 

As a student, we suggest starting with your expenses, then moving on to your income. 

How does budgeting apply in practice?

Developing healthy financial habits, including those for planning and budgeting, helps veterinarians achieve their professional, personal and financial goals. NOW is the time for you to start working on those habits that will prepare you for a great career in veterinary medicine. 

Here’s the Cliff Notes version of my personal story - I wish I would have treated my personal finances with more importance during veterinary school. I wish someone would have told me to pay attention to the loans, my spending and the repercussions that it would all have later in life. Now, to try and help and pay our knowledge forward, I’m telling you! 

This is hard work, but well worth the effort. Our hope is that one day you will look back and be glad that you did everything you could to track your finances during veterinary school. 

Starting Your Budget

Creating a budget! This is one of the least exciting tasks that you will undertake this semester, BUT it is also one of the most important!

Sitting down and working on your budget will give you an edge on keeping up with your finances and help remove one stressful thing from your life come finals season. Creating a budget doesn’t have to be a marathon session. It can be broken up into smaller components, which will make it easier to manage in the long run.

As we discussed before, if a budget is nothing more than a forecast of income and expenses, then the act of budgeting is comparing your forecast with reality. Budgeting is simple, but in real life, most people don’t do the work required. Here’s the big secret, financially successful people and businesses do the work, prepare and follow a budget and their work pays off!

We are going to start with small steps with the income side. Income is anything that is coming into your bank account. It simply sets the absolute maximum that you can spend.  It doesn’t have to be money earned from a job or scholarships. It can be loans, gifts, support from your family or any other funds that come into your hands.

1) Start with student loans. How much do you plan to borrow? Is it based on the Cost of Attendance? Do you have any other loans? We’ll hopefully adjust this amount later if we can create a budget surplus.

Here’s a pro-level tip from Dr. Amy, a 2019 graduate of Iowa State University. Amy financed her veterinary school education with student loans:

“The smartest thing I did was to take my student loan disbursement and put it into a savings account. I then calculated how long that money was going to have to last me.  I determined how much money I would need each week and created an automatic transfer into my checking account. That kept me on track and created accountability to my budget each week. If I was running low, I knew I spent too much money. In the end, this little tip allowed me to not take the full loan amount, which is a huge help now that I’m repaying my loans”

2) Are you employed? If so, take a look at your pay stub and see what your after-tax income is. Can you handle the amount of hours when the tests start flying? If so, then let’s count this income.

Here’s some advice from Bradley, a 2020 graduate of Texas A&M University:

“I didn’t think I could work during veterinary school, because I was scared of the added pressure. But I found a job at a lab, receiving samples and I could study during slow times. My manager was super-flexible when I needed time off to study for finals.  I only worked 7-10 hours per week and I didn’t make a ton of money.  However, the $100-120 per week was enough to cover food and entertainment. This allowed me to save over $10,000 in loans during vet school. When interest is added, that’s real money. Plus, an added benefit, which I didn’t think of at the time, is that it kept me from spending money. When I was at work, I was at least out of trouble”

3) Are you receiving support from scholarships, family, a spouse or dipping into savings? If so, that’s great, but we need to quantify those amounts and not spend more that you are receiving. If this money comes in as a lump sum, we need to calculate how long it should last and spread it out. Take the advice from Amy and create the automatic transfer from your savings to checking accounts. 

You may also have savings from working this summer or you may be planning on working the following summers.

So, your task for today is to go find your income. How much money are you projecting to receive for this school year? Your second step is to ask, how long does that money have to last you? Until the semester break or all the way until May?

Your last step is to calculate how many weeks and months you have to go, and split the money up accordingly.

Finally, here’s a comment from Maria, a current 4^th year student:

“My mother wanted to help me pay for veterinary school so she took out a home equity loan on our house. The interest rate was better than the interest rate for student loans, but it was only later when I learned about Federal Student loan repayment programs that I found this to be a huge mistake. Now the mortgage payments are not applicable for reduced payments when I do my internship. My advice is to contact Dr. Roasa or Dr. Bartels, especially if you are thinking of an outside loan.”

Stay tuned, soon we’ll start working on your expenses!