Budget for a new attending physician: Set the spending line first

Step 1: Pull the paperwork that shows your real take-home

Gather your first two attending pay stubs, the offer letter or employment contract, and HR's benefits enrollment summary. The stubs show what lands in checking after the 403(b), 457(b), health premiums, and disability premiums. The contract tells you when productivity or RVU bonuses pay, often quarterly or once a year. Budget from base pay; leave bonuses unassigned until they arrive.

Ask HR when a new 403(b) or 457(b) election takes effect and whether the 457(b) is governmental or a tax-exempt employer plan. A nongovernmental 457(b) remains the hospital's asset until payout and is exposed to its creditors, so don't count it as emergency money. A $300,000 salary is $25,000 gross each month; with taxes and deductions at 32% for illustration, take-home is closer to $17,000.

Step 2: Does your W-4 still assume one paycheck in the house?

A residency W-4 with the “multiple jobs or spouse works” box unchecked can under-withhold when your spouse also earns; check it against the first attending stub and update payroll promptly. In a hypothetical case with withholding short by $1,500 each month, the gap reaches $18,000 by April, plus an underpayment penalty.

File a new W-4 and add extra withholding on line 4(c) for the remaining checks. Payroll typically needs a pay period or two before the new amount shows up on your stub.

The IRS treats withholding as if it were spread across the whole year, so extra withholding added in the fall can still shrink a penalty; an estimated payment counts from the date you make it. Locums pay has no withholding. Move a share of each check, 30% for illustration, to a separate savings account on arrival, then pay quarterly estimates by April 15, June 15, September 15, and January 15. Miss the 457(b) election deadline and that month's deferral is gone; spend the locums check before setting tax money aside and April can bring a shortfall.

Step 3: Split one paycheck three ways and keep the split that funds your spending plan

Set the spending line from what you spend today, plus a raise you choose in dollars. Then assign loan payments and savings. Spending is a decision, not whatever happens to remain in checking. Annex Wealth Management writes down that spending amount before discussing investments; the portfolio is there to fund it over time.

Jun and Patrice, a hypothetical couple, are 44 and 43. Jun is a salaried pediatrician; Patrice is an emergency physician with W-2 pay and $80,000 a year in 1099 locums shifts. They have no children, paid off their student loans last year, and have $900,000 saved. Jun's $25,000 gross monthly paycheck used to cover a $6,000 loan payment. For illustration, taxes and deductions stay at $8,000, leaving $17,000 after those costs. Last year, $6,000 went to loans, $3,000 to savings, and $8,000 to spending. Once the loan ended, they faced the same choice as a new attending with a newly freed payment: let spending rise or assign the money.

The table assumes Jun's gross pay, taxes, and deductions stay unchanged. In the redirect option, the former loan payment goes to savings; the five-year value assumes deposits at each year-end and a 5% annual return for illustration.

Jun's $6,000 payment becomes $6,000 × 12 = $72,000 saved each year. With deposits at year-end and 5% annual growth for illustration, year one ends at $72,000; year two at $147,600; year three at $226,980; year four at $310,329; year five at $397,845. These are not forecasts: investments can fall in value, and Jun and Patrice could get back less than they put in. If the $6,000 instead raises spending, it adds $72,000 a year to the income their savings must later replace. At a rough 25-times rule of thumb, that higher spending target calls for about $1.8 million more to accumulate.

Jun and Patrice buy more travel or a larger home if they let spending rise. They also give up the saved balance and accept a higher spending target later. A couple already saving enough for its target might accept that trade. At age 44 with no pension and a late start, Jun and Patrice cannot assume it will work. The familiar advice to “live like a resident for five years” also misses cases: a physician pursuing PSLF gains nothing by prepaying a loan that may be forgiven, young children can make resident-level spending unrealistic, and mostly 1099 income needs a plan built on the lowest months.

Use this rule today: keep loan payments plus savings at a third or more of gross pay; when a fixed payment ends, send the whole amount to savings that same month. Spending gets a raise only when you write down the new dollar amount. A budget won't answer a PSLF-versus-refinance question; that needs separate loan and tax numbers. Annex Wealth Management checks the monthly spending line before it discusses an investment change.

Step 4: Sign the long contracts last

Some payroll choices are easy to change; a lease or home purchase is not. You can update a W-4 at any time, 403(b) deferrals usually change by the next pay period, and a 457(b) change generally takes effect the following month. A 36-month car lease, a home closing, and a nongovernmental 457(b) payout election are difficult to unwind. Wait for about six attending paychecks before signing anything that binds you for more than a year.

Who brings up the spending plan at home first?

The partner who stretched a resident salary often raises the subject first, and the new pay stub is a practical place to begin. Agree on a monthly spending amount in dollars, then give each person a no-questions allowance so small purchases don't restart the same argument. A fixed split assumes steady W-2 pay.

If most of your income comes from locums, build the budget on your lowest three months and treat the rest as a bonus.

Step 6: Bring two pay stubs to Annex Wealth Management before the habits set

Talk with Annex Wealth Management before your first full attending paycheck or in the month a large payment, such as a loan, ends. Bring your two latest pay stubs, the benefits summary, the 457(b) plan summary, and three months of bank statements showing current spending. Annex Wealth Management can put the spending line ahead of investment choices; fees are set out in a written agreement before any work starts.