The First Year is the Roughest

Yes, but not always. Yesterday I showed your our first real payroll check as an intern. It was from 2006 and yes our program has made some changes to the salaries of their residents. Don't get too excited yet. Here are the comparisons between the starting salaries when we first started and where they are now.

Net Income Per Pay Period (every two weeks, 26 per year)

Residency Year	Salary 2011-2012	Salary   2006	Net Annual Salary	Net per pay-period
PGY1	$45,990	$43,000	$35,086	$1,349.46
PGY2	$47,599	$44,500	$35,995	$1,384.41
PGY3	$49,265	$47,800	$36,552	$1,405.83
PGY4	$50,989	$49,400	$38,682	$1,487.78
PGY5	$52,774	$51,000	$39,662	$1,525.47
PGY6	$54,621	$54,621	$42,439	$1,582.14

Yes, starting salaries have increased over the last 6 years. Yes, during the six years there were two salary adjustments made. Yes, we made more money every year than we did the previous year. All good news, right?

If you are thinking "if we can just make it through the first year everything will be fine" you are partly right, and wrong. If the first year was bad, the next year will only be mildly better. You are approaching these numbers thinking that your expenses today will stay constant, and that your income will only increase. If you can't make it work the first year, it won't work the second or the third. It rarely does.

The truth is that your expenses are going to change. There are things that are completely beyond your control that you cannot predict. You may drive exactly the same number of miles each year. You may buy the same number of groceries. You may keep the same healthcare insurance. You might do everything in your power to keep these things consistent, but you have no control over how much each unit of xyz will cost you from day to day, month to month, or year to year. 

In a previous post I compared the cost of gasoline when we started internship to the cost of gasoline on that particular day. Since then it has gone up another .20/gal. That single budget items costs us at least $100/month more now than it did then.

Our insurance premiums through the hospital have changed 3 times. The cost of our food has increased, partially because the size of our family has increased. With those kids came hospital bills. The cost of our taxes, both state income tax and property tax, have increased. We had cars that needed major repairs, more than once.

Yes, I know it is possible that all those costs could come down too. They could..... but the only thing that has become cheaper in the last six years, that I am personally very aware of, is housing prices and interest rates. That's it. The things you buy and consume every day e.g., food, gasoline, electricity, water, services, postage stamps - all up.

If your anticipated expenses equal your anticipated income you don't have room to breathe and you will suffocate before Christmas. That sounds really bad. It feels even worse.

Next: Introduction to Budgeting