Bonnie Koo

Welcome to another installment of Interviews with Real Female Physicians. The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially!  So let's introduce our next woman physician rockstar – Heather!

Tell us about yourself:

Hello, I’m Heather. I’m family medicine and a brand-new attending. I practice both inpatient and outpatient medicine at an academic hospital, and enjoy spending time teaching residents and students in addition to my clinical duties. I was born and raised in a medium-sized city in the Midwest with the greater metropolitan area approaching approximately 1 million. Both of my parents are practicing physicians. They gave me a small amount of money toward my education (to be applied toward undergrad), but otherwise the rest has been paid for through scholarships and loans. I came back to the same city to complete my residency and am now just starting faculty. Because my parents both work, they aren’t incredibly helpful with childcare, but it is still wonderful to be close to family! My husband is in his final year of surgical subspecialty training, and also plans to work in the academic setting upon his graduation. I have two young children, and am expecting my third child soon. I can’t say I have much time for hobbies after just finishing my training in a dual-physician household with young kids. In my former life, I enjoyed soccer, skiing, traveling, reading, and spending time outside. I went into medicine because I love helping people reach their greatest health potential. In family medicine, I feel I am in a unique position to do this as I am able to care for patients in the clinic, providing preventative medicine, education, and chronic disease management. When patients are sick, I am able to see them in clinic and also care for them in the hospital. I especially enjoy working with underserved patients, and academic medicine allows me to have a great diversity of patients with the majority of my patients not speaking English. Most days, I am happy with my decision, although it is frustrating the amount of paperwork and non-clinical duties I have to complete. It is sometime frustrating when seen as a lesser physician than specialists, especially when I graduated cum laude from medical school and as a member of AOA, and have such a wide breadth of practice.

Did you graduate with student loans? How much & what are the interest rates?

I went to a state school, and originally took out about $170,000 to pay for my education. Interest rates were between 5.16% and 7.90% and all unsubsidized. I did receive a partial scholarship all four years. I was awarded a full ride scholarship to a different school, but elected to go take out the student loan burden to attend medical school in the same city as my husband. While I would make the same decision again, it is frustrating to think of how my financial situation would be different without this loan burden. My husband graduated medical school with a similar loan burden.

How fast (or not) are you paying them off?

I paid off one loan in medical school, a Grad PLUS loan at 7.90% interest for only $3,000 taken out my first year of medical school. I paid this off my second year, when I was able to take out an unsubsidized loan at a lower interest rate (6.55%, so only a bit improved). I have not yet paid off my loans or refinanced them, although I am in the process of refinancing at the moment now that I am an attending. Although I qualify for PSLF, I am not pursing it as it makes me too nervous. I have paid the bare minimum through income based payments throughout residency, and my loans are now over $200,000 (yikes!). However, we have paid off more than $100,000 of my husband’s loans. We knew that my loans were much more likely to qualify for forgiveness or PSLF than my husband’s, and that I would be an attending sooner (thus able to refinance), so we’ve paid anything we can toward them in residency. I am comfortable with this plan and completely trust my husband, although I understand that some may not take this approach. We plan to continue to pay his off as aggressively as possible, and hope to be done with his loans in about 18 months. We will then aggressively pay mine down, and hope to be done within 4-5 years.

Financial aspects of kids 

When did you have them?  

I have two kids, and a third on the way. The first was born my fourth year of medical school, and the second in residency. They are both young, and when my next child is born, I will have three children under age four.

Are you planning to fund their college expenses?

Our kids do have 529s set up, although we haven’t significantly contributed to them given our own student debt. We encourage grandparents to gift toward them instead of extra toys for birthdays and Christmas. When no longer with our own debt, we would like to fund them with enough for them to attend an in-state university.

What are your child care expenses?

We have used day care exclusively for my children. I did not feel comfortable with a nanny or spending time alone with infants, so went the daycare option. We are overall happy with our decision, although sick days and drop off/pick up times have been stressors in the past. I currently spend $1200 per child per month, which means I will soon be spending $3600 each month in childcare. This is, by far, our largest monthly expense. We also spend quite a bit more on trusted babysitters (especially college-aged family members) to help us with early morning, late evenings, nighttime, and weekend coverage. Now that I am an attending, I have the luxury of more predictable hours.

Are your kids in private or public school? What is the cost including after care if needed.

We plan to send our children to public school when they start kindergarten, as we have good public schools in our area and like our children to be exposed to diversity.

Financial aspects of marriage

Are you married?

I am married.

Did you get a pre-nuptial or post-nuptial agreement?

We got married in medical school and had no prenuptial agreement – we only had debt at the time!

Do you and your husband agree on finances?

We agree on finances, largely because I am responsible for almost everything financial in my household and my husband agrees with my decisions (and is grateful he doesn’t have to do it)!

What financial mistakes have you made?

I probably could have taken out slightly less student debt as I graduated with approximately $10,000 in my bank account. I did eventually use this to pay down student debt, but was worried about keeping enough of an emergency fund available. I contributed the maximum amount my Roth IRA since I was 16, however, I put the money in and didn’t invest it for quite a while because I was overwhelmed with the options. While I am grateful for this money, I wasted the benefits of years of compounded interest.

Have you experienced a financial catastrophe?

We have been fortunate to have avoided any financial catastrophe.

General Finances

What’s your FI (financial independence) number? 

We don’t have an FI number, largely because it seems too far away at this point. We are aggressively paying down student loans, and then would like to move to a bigger (but still modest) house. I am working 80% as an attending, but would love to decrease that further to 50-60% in the future if financially able (and my department supports this!).

Who handles the finances in your relationship? Are you DIY or do you have a financial advisor? 

I handle almost all the finances in our relationship. We DIY. This does result in some mistakes (such as not investing Roth IRA initially, as mentioned above).  I do budget through Mint, more to track our spending. Both my husband and I are fairly frugal. We rarely spend money on entertainment, eating out, or travel. Any leftover money not used by childcare, mortgage, monthly expenses, or to replenish our savings/emergency fund goes toward loans. As we finish our training and have more control over scheduling and finances, we would love to travel more.

What is your net worth?  

We do own a modest 3 bedroom home. It was purchased at the start of residency for around $175,000, as we had a dog and a monthly mortgage was cheaper than renting a house with a yard. We also knew we planned to be in the city long-term. It is currently valued at $230,000. We are hoping to pay off our student loan burden (or at least be close!) before moving to our “forever” home. I don’t plan on a new build or anything extravagant, but I do wish for a bit more space for our growing family! In addition to our student debt and mortgage, we do have one car loan. When we found out we were expecting our third, we needed something bigger than a compact sedan to accommodate three car seats! We are typically pretty opposed to financing things, but our car interest rate (0.5% for three years) is so much lower than our student loan interest rates (lowest rate 5.16% and most at 6.55%) that we used the money for the car to pay down our student loans and will both be attendings to pay off the car loan before the three years are up. I am fairly conservative and keep at least $10,000 in our emergency fund. I know I could probably get by with much less, given that we are a dual-physician household, but with young kids and a current pregnancy I don’t want to be caught surprised.

How are you saving for FI/retirement?

We both contributed to Roth IRAs maximally from age 16 until starting medical school. Neither of us contributed anything in medical school. We then contributed to our Roth IRAs maximally in residency, but no other contributions. Now that I am entering the attending world, I will have a 403(b) and 457(b). As a university employee, I get fairly generous matching starting next year (2019). We plan to maximize these contributions starting next year. The area of finances I feel most deficient in is investing. We do our investing ourselves.  I admit I don’t fully understand investing/the market. Most of our money is in index funds, like the S&P 500. I would like to learn more about this in the next year to better invest my money.

Do you have insurance?

We both have term life insurance, no whole life insurance. We both have personal, own-occupation disability insurance. We have umbrella insurance through our home/car insurance company. We’ve never had to use it. We also just established a revocable trust and updated will.

Do you give to charity? If so, where and why?

We give to charity, although only about 2% of our net income. We would like to give closer to 10-15%, as soon as our loans are paid off. We currently/plan to contribute to our church, our undergraduate university, and local organizations we support.

Any parting words of wisdom?

Our financial plan largely comes from White Coat Investor and Dave Ramsey. We are financial amateurs, but we at least know where our money is going each month and can use that to cut it down to the bare minimum to allow for loan repayment. We are both so excited to be a bit more loose with our money as soon as we don’t have that over our heads!

Tell readers a fun fact about you

I took a month off between residency and starting as an attending, and it was wonderful to spend time with kids, catch up on life/adulting, and be able to read my first book for pleasure in 5 years (whoops!)

And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!

I loved reading Heather's story and I hope you did too. I was totally inspired about reading how she was able to take control of her and her husband's finances and get on track for financial freedom.