Should you pay off your debt or save money?

As a dental student or resident, you probably haven’t thought much beyond getting your first job. Once you get your first job, you are going to have a lot of decisions to make. Hopefully, one of the first ones will be to decide what to do with the money from your paycheck that you don’t spend. If you have student loan debt, you might be ready to throw your entire paycheck at your debt. Should you? Maybe, maybe not. It’s different for everyone. But here are some things to consider.

1. You should start by creating an emergency fund, perhaps equal to six months of monthly expenses. Most new graduates will average around $5,000 a month between rent, car expenses, insurance, etc. Obviously, this varies, but I don’t see too many people spending less than this. That means you should try to save $30,000 as fast as you can. One of the things to keep in mind is that your expenses will never be lower than right after you graduate. If you buy a bunch of stuff and/or lock into high monthly expenses such as luxury rent or high car payments, it’s going to take you a long time to get to $30,000. If you start at a $500 a day per diem, it can be tough to save even $1,000 a month for some grads, even on a modest lifestyle. That means it will take you almost three years just to get your emergency fund adequately built up and that assumes you don’t dip into savings for anything. Be very cautious of ratcheting up your lifestyle before your budget can handle it.

2. Create a plan for your student loans as soon as possible. However, sometimes it takes a year to figure out what you are doing. You might work at a few different offices before you find the one that fits. You might start in public service and realize it’s not for you. You might end up in private practice with a per diem guarantee for six months and then make less when you switch to production. Whatever the case, as soon as you get settled, you need to figure out what to do about your student loans. Once you come up with a plan, then you can decide if it makes sense to pay this off as soon as possible.

It’s going to be different for everyone, but hopefully this gives you some things to think about. Other events that require cash for many new grads include buying a home, wedding expenses and purchasing a practice. Remember to factor those things into your plans.

~Ryan Schulte

Ryan Schulte

Ryan Schulte is a CERTIFIED FINANCIAL PLANNER® that specializes in working with dentists. He is also the founder of, a student loan consultant group that works with dentists across the country to help them gain an understanding of their debt, their various repayment options and to create a plan for repayment. You can learn more at and contact Ryan at [email protected]

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