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The Finances of Starting a Family as a Resident

Medical residency is a time of transition – leaving medical school for a teaching hospital, drawing a salary instead of...

Published July 01, 2022

6 min read

Medical residency is a time of transition – leaving medical school for a teaching hospital, drawing a salary instead of living off student loans, being officially called “doctor” for the first time. And then there are the personal changes – deciding where to live, when or whether to get married, and if you should start a family right way.

For some residents, the choice of welcoming a child is most impactful, and delightful of all. If you are thinking about having a baby during residency, one of the first things you may want to consider is the long-term impact your little bundle of joy will have on your household budget.

How expensive is it to raise a child?

There is no one definitive answer, of course. But the US Department of Agriculture’s Center for Nutrition Policy and Promotion offers some insights. According to their most recent Expenditures on Children by Families report, the yearly expenses for a two-child married couple with pre-tax income between $59,200 and $107,400 ranged from $12,350 to $13,900. That number tended to increase as the child got older1.

Broadly speaking, the cost of raising a child includes housing, food, transportation, clothing, healthcare, childcare and education, and other miscellaneous expenses. The highest of these expenses is housing (29% expenditure share), followed by food (18%), and then childcare and education (16%), each of which we examine below.

Housing expenses

It is important to consider whether the house or apartment you choose after you are matched will be appropriate once the baby arrives.

Ask yourself these questions:
Does your current residence have a separate bedroom for the infant, or will your baby’s crib sit alongside your bed?

Will you have a place to study for licensing exams or decompress after a long shift when your child is napping?

In later years, will you want to spend more on housing to live in a community with preferred schools, large yards, and other child-focused amenities, such as public parks?

Between moving costs, security deposits, down payments, and a potential increase in your monthly rent or mortgage, moving to a new home to make room for baby could have a big impact on your monthly budget.

Food costs

Due to the sticker shock of formula prices, many new parents often believe that food costs are higher for infants than they are for younger children or adolescents.

As the child grows – and eats – parents quickly see how wrong they were.

It may seem implausible that feeding your four-year-old the same food you already prepared for yourself would cost more than mixing formula bottles 24/7. But ask any parent at the supermarket with a mile-long grocery list how quickly the fish sticks and yogurt disappear with a growing child in the house.

The food costs definitely add up quickly.

Childcare and education prices

In a recent USDA Family Expenses Report, childcare and education was the only budgetary component for which more than half of all households reported no expenditure.

This is no surprise, really, as it is common for many families with pre-school aged children to have a stay-at-home partner or to arrange for childcare through a relative or friend.

This situation, however, is a lot less common for medical residents, who often move away from family and friends to pursue their careers.

Since most medical residents are subject to long shifts and changing schedules, many find it necessary to enroll their children in daycare and preschool programs. Similarly, once their child is able to attend school full time, many parents elect to send them to public schools. While these schools are essentially free, they do have indirect costs, such as the cost of housing in a preferred school district and real estate taxes (even for non-homeowners) that you should be aware of.

If you choose to send your children to private schools, expect their education expenses to go up year after year.

Give careful consideration

Starting a family can be the most rewarding journey of your lifetime. But without making a comprehensive assessment of the long-term financial impact of having a baby, you can find yourself exhausted and fiscally strained. Before welcoming your first child into the world, take the time to consider your options, make a plan, and decide when the time is right to grow your family.

  1. “Expenditures on Children by Families, 2015,” U.S. Department of Agriculture, Center for Nutrition Policy and Promotion, revised March 2017, https://fns-prod.azureedge.net/sites/default/files/crc2015_March2017.pdf. The USDA notes that middle-income families are defined as those with pre-tax household incomes between $59,200 and $107,400.

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