The professional life of dental and medical professionals can be hectic and demanding. On top of that, you have other monetary demands like bills, living costs, holidays, and every day treats to consider. Then there is also financial planning.
This does not constitute advice and advice should be sought in all instances before acting on it.
Financial planning – with constant changes to your personal circumstances, taxation, and legislation is sure to be confusing and overwhelming. That’s why it is something you’ll need to revisit often to make sure your strategy is still on track to help meet your end goals.
Start planning
The first step you should take when planning out your financial future is to consider your current situation. Figure out exactly how much money you have coming in and how much is outgoing via savings, living expenses, and debts. This will help you develop an understanding of how our money is working for you and you’ll be able to easily identify areas for improvement.
If you don’t already have a monthly budget, use this information to build one to keep you on track. Be sure to include a specific savings avenue for an emergency fund — about six months’ worth of living expenses — just in case anything happens to you.
Expect the unexpected
A “rainy day fund” might be enough to weather the storm for a temporary setback as a young professional, but unfortunately, that just won’t cut it when you have a family to consider. Many people don’t want to think about what would happen if they suffered an illness or injury that prevented them from working and even fewer people want to consider how their family would cope in the event of their untimely passing.
Planning for these events is an essential aspect of financial planning. There are a few different options to protect and preserve your wealth – life insurance, income protection, and critical illness cover being the main ones. They all have their advantages and would serve you and your loved ones well if you were to fall ill, get injured, or pass.
Set your goals
Beyond planning for unfortunate events, every individual has specific goals they are working towards and there’s no exception when it comes to financial planning. At the start of your journey, you’ll need to consider what those are for you.
Develop short, medium, and long term saving goals and make sure they’re SMART: specific, measurable, achievable, relevant, and timely. Once set, review your progress periodically to ensure you’re on track.
The other half of the wealth-building equation is investing. Knowing your comfort level when it comes to investing will influence its prevalence in your plan. Think about what you want your portfolio to consist of and what will help you reach your financial goals, remembering that diversifying your portfolio helps to minimise risk.
- Do you want to handle everything yourself or will you work with a professional?
- Are you more interested in property or stocks?
Your answers will help shape your personal plan, but be sure to remember that with each path there are peaks and troughs – rarely is investing a smooth journey. Try not to get bogged down by the day to day minutiae and set your sights on the bigger picture.
Review your plan often
Your financial plan is not something you’ll work on once and forget about until it’s time for retirement. You need to regularly review your plan with your financial adviser because personal and broader economic changes will regularly impact your finances. If you’re ready to start your financial plan or if it’s time to review your progress, get in touch with a team member to schedule an appointment today.
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Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.