1. Money Matters for Residents: teaching personal finance in residency Sally P. Weaver, PhD, MD Waco Family Medicine Residency Program Spring 2009

2. Money Matters for Residents “Come to think of it...I owe all my drive, ambition and focus to student loan debt.”

3. Money Matters for Residents ► 2007  The average medical student loan debt is over $139,000  Over 85% of med students carry school loans ► 75% of these are >$100,000 ► 2008  Residency graduates pay 12-15% of their after-tax income paying off their medical school loans.

4. Money Matters for Residents ► Residents and practicing physicians need to know how to manage personal finances. ► Fewer are learning the needed skills before residency. ► It’s difficult to be financially successful in business if you are struggling financially at home.

5. Money Matters for Residents ► All of this led to the development of a new learning opportunity for our residents. ► This session will give you the specifics you need to replicate Money Matters for Residents at your institution.

6. Money Matters for Residents “If debt is a measure of consumer confidence, we have become very confident indeed!”

7. Money Matters for Residents ► What we will cover today:  1 st meeting specifics ► Fun icebreaker ► Steps to being debt free, wealth accumulation  2 nd meeting specifics ► Financial APGAR score ► Budgeting for residents and new graduates ► Accelerated debt payment  3 rd meeting specifics ► Saving for retirement and college

8. 1 st Money Matters Meeting 1 st Money Matters Meeting ► 1. Welcome and thank hosts (we had all three meetings at the home of one of our chief residents with childcare/snacks provided and spouses were encouraged to attend) ► 2. Opening icebreaker – Debt Myths and Facts true/false test (see FMLC program – ‘April Fool’s’) (highest or lowest score given a free money management book such as Your Money or Your Life or Total Money Makeover) ► 3. Go over ‘Steps to Being Debt Free’ (see FMLC program)

9. Steps to Being Debt Free Steps to Being Debt Free ► 1. $1,000 cash to start an Emergency Fund. ► 2. Pay off all debt (except house) using an accelerated debt payment plan (debt snowball). ► 3. Accumulate 3-6 months of expenses in savings. ► 4. Invest 15% of household income into Roth IRAs and pre-tax retirement. ► 5. College funding for children. ► 6. Pay off home early. ► 7. Build wealth and give! (Invest in mutual funds and real estate)

10. 1 st Money Matters Meeting ► 4. Discuss accelerated debt payment plan (aka Debt Snowball). (see handout)  (Tell them we will do budgeting at next session.) ► 5. Encouraged reading Total Money Makeover (Ramsey) AND Your Money or Your Life (Dominguez and Robin) ► 6. Take questions

11. 1 st Money Matters Meeting ► 7. Discuss wealth accumulation  (see Wealth Accumulation Calculator handout visually depicting rise in wealth over 25-30 yr period with investments)

12. 1 st Money Matters Meeting ► 8. Money saved over lifetime by paying cash for used cars instead of loans: ► Savings are between one and four million dollars!

13. 1 st Money Matters Meeting ► 9. Homework: develop a budget and using a cash envelope system. ► (First need to list all assets and liabilities. See sample budgets with recommended percentages for each category.) ► 10. More time for questions. ► 11. Close and give date/time/place for second of three sessions.

14. 2 nd Money Matters Meeting ► 1. Financial APGAR score activity  Located in FMLC program book  handout and give about 5 minutes to complete  go over scores and meanings (second handout) ► 2. Go over Steps to Being Debt Free handout (a review)  remind them to read books ► 3. Life and Disability insurance examples

15. 2 nd Money Matters Meeting 4. Budget examples with lengthy discussion - $46,000 budget (make handout) - $130K budget with debt payoff example

16. 2 nd Money Matters Meeting 5. Move into Debt Snowball - Accelerated Debt Payoff example sheet (FMLC) - Debt Snowball worksheet from Ramsey book 6. Briefly go over articles on ‘food costs’, ‘plan for retirement not college’. 7. Thanks for coming. Next meeting in two weeks on Retirement planning and college savings with guest speaker.

17. 3 rd Money Matters Meeting ► Invited local financial planner to facilitate discussion and add some credibility. ► Discussed how much to save for retirement and how to plan: what type of accounts, setting goals, etc. ► Brief discussion on college savings and early retirement. (‘You can always borrow for college, but not for retirement!’)

18. Money Matters for Residents SallyWeaver@me.com