Set SMART goals
It’s just 7 weeks until the start of the new year! Perhaps for you, like for many, this time of year is energising, with the prospect of a fresh year ahead, a chance to better yourself and your business, clear old debts, make more profit, take more holidays, spend more time with the family or, be one step closer to a more comfortable retirement.
The lead up to Christmas can be a busy time with festivities taking over. However, if you can set aside some time to start planning for 2016, you can start the new year as you mean to go on.
Healthy and happy finances
Everyone’s attitude to finances varies. However, on the whole, most doctors and dentists, aspire to most or all of the following:
- To be debt free
- For monthly incomings to exceed monthly outgoings
- To be mortgage free (one day)
- To have a good, solid retirement plan
- For business profits or salaries to grow upwards
- For business and personal taxes to be as low as possible
- For financial rewards from working, to be “fair” for the time invested
- For there to be enough savings in the bank to cover unforeseen eventualities and emergencies
- To make investment for their financial future, and their children’s
- For the family to be financially secure in the event of being unable to work
You may be able to think of some more that are relevant to you.
Prioritise your finances
First things first, when giving your finances an overhaul is to put your “financial wish list”, a list similar to the above, into an order of priorities.
Usually, clearing debt comes first, as most of the time, it doesn’t make sense to have to counter balance earnings made on savings and investments, with paying interest on debts.
Mortgages are considered an exception, as most people have a mortgage debt, or sometimes more than one mortgage, in the case of second-home or, buy-to-let property owners. A mortgage tends to be viewed as a long-term strategy thought, that “one day” the aim is to be mortgage-free but in the meantime, investments can continue alongside.
Your prioritised list could look different to your spouse or partner’s depending on how you individually view financial security and risk. One person may want to focus on paying the mortgage off to give financial independence, whilst the other may want to maximise the mortgage debt and use any spare income for higher-risk investments.
Dental & Medical Financial Services help create a bespoke holistic financial plan for doctors and dentists, taking into account yours and your family’s priorities.
Set SMART goals
Setting financial goals are no different to setting any goal. Make them SMART:
- Specific
- Measurable
- Achievable
- Realistic
- Timely
Specific – “I want to pay off my £5,000 credit card”
Measurable – by the monthly credit card statement
Achievable – make sure you have excess income each month. Decide what you can cut back on.
Realistic – can you actually afford to cut back on everything you promise?
Time line – “I want to pay off my £5,000 credit card, within six months” – set a timeframe
Other examples of SMART goals are:
- I want to open a JISA for my child in the next tax year
- I want to increase my business profits by 5% in 2016-2017
- I want to use my additional salary of £1,000 per month for a new investment
- I need to review my Life Cover and Income Protection insurances, urgently, so I know my family are secure in the event I am unable to work
- I want to invest in a buy-to-let property in the next six months
Allocate some time in the next few weeks to first prioritise your financial wish list and then to set related financial SMART goals.
Before you go…
Don’t forget to download our free Guide to Wealth Goals, detailing tips on how to save for a rainy day and a comfortable retirement.
Dental & Medical Financial Services can help with financial planning so that your financial goals and aspirations can be managed and monitored to ensure they are on track. Call today to discuss your dreams.
Tel: 01403 780 770