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Doctors Free of Student Loans: Dr. M. Tran

Hello TFP Tribe! For this week’s dose of motivation, I am very happy to introduce Dr. M. Tran.  She paid off $220k of student loans in 30 months!  Let’s welcome this amazing woman as she tells us how she did it!

Dr. M. Tran's Student Loan Story

Dr. Tran, please introduce yourself. 

I am a full-time hospitalist at an academic institution in the Bay Area. Technically I was hired by an academic institution to work in a smaller community hospital that they had just acquired. My work resembles a community doc but professionally and financially speaking, I am an academic doctor.

Wonderful!  Another “low earning” doc kicking her loans in the butt!  How much student debt did you pay off?  

I graduated with over $220,000 in debt and I paid several thousand dollars interest over the years.  During residency and for almost a year after I was planning to do PSLF (Public Service Loan Forgiveness). Working as an academic attending, I qualified. I debated whether to stick with PSLF for several months but eventually came to the conclusion that I wanted to 1. Pay off my loans faster and 2. Wanted to be able to change jobs in the future in case I didn’t want to stay academic for 7 years. With a strict budget and changing up my loan payment goals, I was able to pay off my loans 2.5 years after graduation.

That’s amazing!  Just so our readers have a full picture of your household financial picture…Are you married? Does your spouse have a job and/or student loans?

I am not married. I have had two different long term partners over the last few years but we generally keep our finances separate from each other so far. Funny story though…about a month into my current relationship (who is probably “the one”) I told the guy that I couldn’t get serious until he developed a sound retirement plan. Obviously this demonstrates how important financial responsibility is to me. (P.S. he’s working on it and making progress)

Ha! I’m with you on that one. It is so important to be on the same page as your spouse when it comes to money. Did you refinance your loans?

I refinanced my loans once. It was after I decided I wasn’t going to go forward with PSLF about 8 months after residency graduation. I got a good deal with First Republic Bank at a rate of about 2.9% over a 7-year plan, with the caveat that I had to start a checking account with them. They didn’t approve me for a shorter term based on my annual salary. I ended up really liking their bank as their ATM card has no fees world-wide and reimburses you for any other ATM fees you run into. Their refinancing promotion worked for me because I ended up turning them into my primary bank.

Nice. What made you decide to ditch PSLF, refinance, and pay off your loans early?

I debated this for months since I had almost 4 years of qualifying payments by the time I decided not to. I was happy in my job as a new attending but I have also become accustomed to a life where I have moved every 3-4 years for the last 12 years of my life. My residency program director also once told me “The majority of new doctors don’t stay in their first job for their whole career.” That made a lot of sense to me. I wanted career flexibility and geographical flexibility in my future and didn’t want to feel trapped in a situation because of some loan repayment program.

Once I decided not to do PSLF it was a pretty easy decision to refinance and decide to pay it off quickly.

If you can’t tell I like having flexible options in my life and a >$2k monthly payment for 7 years didn’t feel financially flexible. So I decided to buckle down and pay it off fast, all the while looking forward to having more flexibility with my future dollars.

And you made some amazing progress!  How did you do it?

Just live on less than you earn and throw the rest at loans.  I come from a humble family. My parents were refugees – my father is a truck driver and my mother was a hairstylist. Growing up, Sizzler was considered a nice dinner out. My lifestyle as an undergraduate, a medical student, and a resident surpassed the lifestyle I had as a child. I really don’t think that most people need as much as they do, so living off 25-30% of my salary was not that hard for me.

I think what makes budgeting hard for people is that they compare themselves to people around them. I do feel those pressures sometimes, too, so I get it. I am fortunate in a sense that my closest friends are social workers, teachers, union workers, and health professionals that also have “humble lives” so I surround myself with less “keeping up with the Jones” pressures.

Getting down to the nitty gritty…

During residency I lived in a relatively low cost of living area and rented a VERY tiny room in a house with housemates. Because of that, I actually saved a lot of my resident salary (who has time to go out much during residency anyway?) and had a good chunk of money sitting in my bank when I graduated.

The first month or two after graduation I basically ended up using that as time to educate myself to figure out what to do with money, now that I finally had some. I read “Simple Path to Wealth” and the White Coat Investor”. I read parts of the Boglehead forum. I started using Mint to keep track of how I spent my money. I talked about financial planning a lot with my friend, Jessica, who was going through the same learning phase. I also used the first few months to develop an emergency fund for myself, which I keep at around $20k.

After learning and understanding my own finances, I created a budget with the priorities as follows:

  1. Set expenses – rent, utilities, insurances.

  2. Retirement – my goal was for this to be 20% of my income

  3. Loans – my initial budget was just making the regular minimum payments

  4. Food – I was pretty strict at about $400/mo. I was able to stick to this by mostly cooking for myself 85% of the time. I took it a step further by meal planning based on the sale ads I would get in the mail. I love home cooked food and a pretty good cook so I didn’t find this burdensome.

  5. Lifestyle – I made sure to budget in gas, gym, a movie per month, and a monthly bar budget…

  6. Fun – having a fun part of your budget makes budgeting more sustainable and guilt free when you do buy yourself something nice. For me this was clothes and vacation. I set a monthly budget that rolled over when I didn’t spend it. So if I wanted a particularly fancy coat I would have to have my clothing budget build up for a few months before I bought it. Same went with traveling.

Last year my New Year’s Resolution was to have a zero-sum budget. Basically what that means to me is that my budget has to account for every dollar I make. At the end of each month, I look at the money I made – minus the money I spent – minus the money I have for future allocations (e.g. semi-annual car insurance payment, travel budget, clothes budget, etc.) and any money left over I put it right away into an extra loan payment. That way at the end of each month I don’t get a chance to waste the money on something else.

Additionally at work I do get quarterly bonuses. This averages to $40-50k a year, so pretty substantial. I use the bonuses to get myself one gift per bonus (once it was an instant pot, another time putting some money into my travel budget) and the rest I throw at loans since I have otherwise not budgeted for it.

I actually did run into a little inheritance along the way. It is a long story because it was some money my mom had put into an annuity with a friend who is a “financial adviser” with World Financial Group. That group is a scam pyramid scheme that focuses on older immigrant populations to make their money. I cannot emphasize enough to STAY AWAY. I didn’t know anything about finances at the time (this was mid-residency) and somehow lost my personal access to the money while working with my mom’s “friend”. It was pretty horrible. I was eventually able to circumvent the loss by finding a way to put my share of the inheritance towards my dad and sister and they probably need the money more than me anyway so it worked out in the end.  

And with the plan above I was able to pay off my $220k in 2.5 years while meeting my retirement savings goal. It really wasn’t that bad a journey!

I love a bunch of your strategies up there!  I especially like the idea of a rolling over “Fun Budget”… great idea! Switching gears a bit, a lot of people struggle with how much to invest during debt payoff.  Did you invest for retirement during debt payoff?  If yes, what percent of your salary and why?

Yes, after reading about compounding interest I knew I didn’t want to delay that process just to pay off my loans faster. So based on WCI advice, I aimed to save 20% of my salary for retirement. I have a 403b, Roth IRA, and a Vanguard taxable account and put about $35-40k in those each year. I also get a 5% match for my 403b.

Words of Wisdom

What advice would you give yourself during medical school?

Honestly I didn’t know anything about money until I was an attending. People talked about it here and there but I wasn’t even in the mindset when I was younger. I just didn’t have the money to think about saving and when you borrow money It doesn’t feel like REAL money so I wasn’t worried about borrowing a lot because I knew that one day I would be a “rich doctor.”

I wouldn’t necessarily tell myself to live more frugally or take out less loans because my journey to where I am now sure was fun and I am feeling pretty satisfied with how it turned out. I guess if I had to give myself advice it is to “do your Roth IRA every year, be able to pay off your credit card each month, and take advantage of retirement matching.” Honestly I doubt if I would have listened to it then.

Ha! I know, I wish we weren’t so hard headed as kids! What advice would you give yourself during residency?

Probably same advice I gave myself as a medical student. AND I would keep emphasizing to myself, it is okay that you rent a tiny room and your co-residents are buying houses. THERE IS NOTHING WRONG WITH THAT. I did feel a little inadequate that everyone was on that route. But hey, I can’t exactly complain about my situation either now that I am where I am.

What advice would you give yourself during your first few years as attending?

I should have refinanced sooner and done my monthly budget evaluation plans sooner. This is probably because I just finished paying off my loans YESTERDAY and still floating on my good vibes but I am feeling pretty proud and don’t necessarily need to change what I have done. I honestly don’t feel deprived and I snuck in fancy dinners a few times a year and vacations almost every season. So kind of like above, it is important to just emphasize to myself that my life is really good. I have happiness, security, and lots of experiences to reflect on. Sure, I don’t have a Tesla but I find those door handles weird anyway.  

Student Debt Free Living

How does it feel? It was a bit anti-climactic to be honest. But still feels good!

What are your plans for the extra money in your budget now that your loans are paid off?

Saving for a down payment, I think it will take another 2 years of my savings strategy to do it. But I’m in no rush and will probably prolong that. Now that I have more flexibility I am also going to budget paying for one family vacation a year with my dad and sister. It is about time they start to enjoy the fruits of their lifetime support of me too.

For some parting words — you can do it! We as doctors (even me that is considered a “lower paying” field) make a lot of money compared to the rest of our fellow Americans. If you can find happiness and pleasure in non-material things (for me it is running, plant-tending, backpacking) then you won’t be bothered by not having a lot material and expensive things that will distract you from debt-free journey. (Also watch the new Marie Kondo show on Netflix for inspiration). Good luck and I am rooting for you!

What an inspirational story!  Thank you so much for sharing here, Dr. M. Tran.  I hope this made you as motivated as it made me to kick those student loans out of my life!  If you’d like to be featured in our series, head over to the Contact Me button at the top of the page and drop me a line.  ‘Till next time!  

Dr. D

Standard Disclaimer:  The Frugal Physician has no monetary relationship with Dr. M. Tran.  This article contains affiliate links.  Some images from  



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