This USDA veterinarian (who wishes to remain anonymous), resides in the Midwest with her husband and children. She also works as a part time associate veterinarian. She wanted to share her story of becoming completely debt-free, including her mortgage!
1.Give us a little of your background and how you got started in veterinary medicine.
After finishing a biology degree, I had an interest in medicine and I enjoyed working with animals, so I put those two interests together and went to vet school.
2. What was your level of financial literacy prior to veterinary school? Were you price sensitive when pursuing veterinary medicine?
Beyond being a natural cheapskate and always paying my bills on time, my financial literacy was lacking before vet school. I didn’t have a good grasp on the total cost of my education compared to my starting salary. I figured I would pay off my loans when I got out of school.
3. Did your veterinary school provide personal finance education? If so, what did you think of the quality?
I do not remember getting much information about personal finance education in school. I think they offered a short course, but I wasn’t really worried about finances. Close to graduation they had us meet with a financial aid advisor who recommended I consolidate my loans because the current rate wouldn’t get any better—it was a little over 5%.
4. How much debt did you have upon graduating from veterinary school (if any)?
$98,000 ($17K carried over from undergrad)
5. Did you know you always wanted to pursue a career in public health? Did finances play a role in your decision?
I went to vet school to work in private practice. I had no interest in doing anything in the public health arena. I visited a hog slaughter plant while in vet school and I specifically remember thinking “why would anyone waste their time going to vet school to do this job?”
After several years in private practice, I was unhappy in my work environment and ready to change careers. In desperation, I applied for a USDA FSIS position within my commuting area. The pay was initially comparable, but I quickly learned the benefits, overtime pay, retirement package, and time-off were great compared to anything I ever had in private practice. Finances didn’t play a role in my decision to take a position with the USDA, but they have played a role in my decision to stay long term.
The flexibility I have in my current FSIS position allows me to work full-time with additional overtime income and maintain a part-time position as an associate in private practice. I would not be in the same financial place I am today had I stayed in private practice where my salary seemed stagnant and I didn’t have a solid retirement plan.
6. Describe your student loan debt payback strategy and how you decided to use that strategy.
I knew I wanted to pay my loans back as quickly as possible, so I put them on a 10-year repayment plan with a payment a little over $1000/month. My plan was to pay extra on the principal as often as I could. I wasn’t living on a budget and I didn’t have an overall financial plan besides paying off the loan. It helped that I lived frugally in a small, rural Midwest town with a very low cost of living my first three years out of school–my rent was $225/month for a tiny duplex.
7. How long did it take for you to pay off your student debt?
I was not focused with my money and I didn’t aggressively try to become debt free, so it took me seven years. My starting pay was $45,000 and around $85,000 when I finished paying off my student loans in 2009. During that time, I transitioned from rural mixed animal to ER in a larger city, then back to a rural practice. One benefit to working ER was that I could earn a lot of extra income by working relief in my spare time. Had I been really focused, I think I could have paid my loans off much quicker.
8. Why did you decide to pay off your mortgage early?
My husband and I bought our house in 2011 and in 2013 we took the Dave Ramsey Financial Peace course. That is when we decided to change our financial future. We were making decent money, but we had a car payment, we didn’t have a solid emergency fund, and we were not living on a budget. We realized how much money we were simply wasting. We refinanced our mortgage in 2013, reducing it to 15 years and we decided to focus on following the Baby Steps.
9. How long did it take you to pay it off?
We paid the mortgage off in 8.5 years. We initially put $40,000 down and started with a 30-year $210,000 mortgage in 2011. After taking the Dave Ramsey course in 2013, we refinanced to a 15-year term (2.65% rate). We paid extra towards the principal each month and focused on putting any extra income towards the mortgage. We were very blessed by my mother-in-law, she gifted us $20,000 to use for part of our down payment and then $20,000 again later. After tithing, we put all gift monies towards the principal.
10. Do you have any specific financial goals now that you’re completely debt free?
We are very active in our church and we look forward to being able to use a larger percentage of our income for the Kingdom. We have increased our retirement investment contributions and we are considering ways to retire early. We did not do a lot of traveling or vacationing while we were working on the mortgage, so now we plan on traveling more.
8. If you have a significant other/spouse, what role did they play while paying off debt?
After getting married, we combined our finances and I took on the role of managing our money. I am a saver while my husband is less concerned with the day to day aspect of finances. He was very supportive to stick to the budget and not make unnecessary purchases. I kept him regularly updated on how much money we had saved and the progress we were making on paying off the mortgage.
9. Did you have any challenges while paying back your debt?
I worked long hours in private practice, took on extra relief jobs, and now work a lot of extra overtime. My husband and I both added part time jobs in addition to our full-time careers to increase our income. Although not fun to work a lot, it has helped increase our savings/retirement and got us out of debt sooner.
10. What are some financial mistakes that you’ve made?
So many mistakes!! I wish I had been financially focused right from the start with a tight budget to aggressively pay off my student loans quicker. I wasted a lot of money out of ignorance.
I took financial advice from my parents who didn’t always make good financial decisions for themselves. They encouraged me to go to college wherever I wanted, regardless of the cost. My mom always told me “you will always have a car payment” and I believed that for a long time. That was bad advice.
I opened a Roth IRA after vet school and randomly invested here and there, but nothing consistent. I didn’t start aggressively investing in my retirement until 2010 when I started with FSIS. I took money out of my Roth IRA that I had invested years before to use as part of the down payment on our house. We wasted a lot of money over the years because we didn’t have clear financial goals.
11. What is your financial advice for other veterinarians?
Have a plan for your money–find out where you are wasting money (it was eating out for us) and adjust your spending. We followed the Dave Ramsey plan and it helped us get organized.
We immediately developed a detailed budget, paid off our car loan, created sinking funds, saved a 6-month emergency fund and fine-tuned our investment amounts.
I took time to learn about investing, invested my HSA contributions, maxed out all retirement contributions, and adjusted our Roth IRA investments.
Making sacrifices to pay off debt was hard but being debt free several years before retirement will hopefully let us make up for some of the mistakes we made early on.
12. Feel free to add any other information that people may find helpful!
We also found Howard Dayton’s financial ministry very helpful. We want to be good stewards of God’s resources!
The idea of being completely debt-free sounds pretty amazing. Here are some key points from this DVM who can now proclaim herself DEBT-FREE!
- Being a “natural cheapskate” may be good for your wallet, but it’s not enough! As she mentions several times through the interview, she was “wasting” money by not being aware of how it was being spent. If you’re not actively keeping track, despite your “cheapskate” tendencies, you may still be spending more than you anticipated. The situation started turning around once she got intentional with her money. Your money does not automatically fix itself!
- Your DVM is versatile. Your career path straight out of vet school may be wildly different from the path that you eventually take. Be open-minded and think outside the box when it comes to utilizing your DVM to its fullest extent.
- Your benefits matter! This post discusses the numbers behind academic medicine and private practice for specialists as an example.
- Geographic arbitrage matters. The ability to live in a lower cost of living area allowed her to get to debt-free sooner rather than later. Of course, not everyone can do this, but understand that it may be an option.
- Being on the same page as your spouse–> getting to your shared financial goals easier and quicker. Also note that both partners decided to take on part-time jobs in order to accelerate their debt payoff.
Thank you for sharing your story, and congratulations on being DEBT-FREE!
I hope that this story inspires YOU to take action. What can you do today to ensure your financial success?
Are you interested in submitting your own Vet Success story? Contact me at firstname.lastname@example.org.