It has been awhile since we talked about savings and how to save while incurring large amounts of debt in dental school. Typically, it is recommended that everyone has an “emergency fund” to cover at least 3-6 months of their fixed costs in case they are unable to work or have an immediate family need. How can you make this happen while still in dental school? It may not be easy, but you can get a jump start on savings post-dental school while you are still IN dental school. You may be taking out student loans to cover living expenses while in dental school. By “trimming the fat” and limited personal expenses while in dental school, not only will you keep student debt to a minimum, but you will be keeping the interest on student debt down as well. By keeping extraneous spending to a minimum while in school, you will have that much extra to put into your savings account when you are out of school and working. With lower student loans and interest payments, extra cash flow can be directed to a savings account each month. Whether you can afford $20/week or $100/week, any amount will help reach your goal.
So, what costs should be included in your “emergency fund?” You want to save for your fixed costs, or costs that MUST be incurred each month. This includes, but is not limited to, student loan payments, rent payments, basic grocery and home costs and utilities.
Where should you save this money? A savings account is a great option because you will have access to this money right away. A high yield checking account is also a great option. Online banks, such as Ally and Everbank, offer higher interest rates on high yield checking and savings account than many traditional bricks and mortar banks.
~Megan Mathers, JD, Mathers Law