Creating a plan for your finances is critical no matter your age, and it is never too early to begin the process. When you start out in your career as a physician, developing a financial plan can be intimidating or something you don't feel like you have time to dedicate to right now and you will get to it later especially if you are trying to do it on your own. Despite the challenges, it is worth putting in the effort now, and they are financial planning resources like Spaugh Dameron Tenny to assist you.
The earlier you begin to put intention into financial planning, the easier it is to create healthy financial habits. As you first finish medical school and start your residency, you may not be earning much money and you may come out with a mound of student loan debt. Managing that along with your day-to-day expenses can be a daunting task. One thing that can help is financial planning.
When you start planning early, the better your opportunity is to put a strong financial foundation into place. It is helpful to know what you want in life to start setting your goals.
As with most things, the sooner you start, the better things will go, and financial planning is no exception. It is helpful to set realistic expectations and goals. Consider how you want to live your life. While you are not a soothsayer and do not have a crystal ball, keep in mind what life events you think will be part of yours. Are you planning to get married, purchase a home, have a child or children, go on vacation or travel, what are your ongoing hobby expenses, do you have any health issues, and at what age do you want to retire? These are all questions to consider.
It can be challenging to think about the future when you are still paying off your student loans. Remember, this is not a sprint. Even a small amount saved or invested can make a huge difference in your future.
Another point to consider is that physicians' finances can be complicated, especially as you grow in your career. Unless you are passionate about and enjoy financial planning, you may decide that you want help with your financial planning. At Spaugh Dameron Tenny, we specialize in helping physicians and dentists create personalized, comprehensive plans to meet their financial goals.
Right now, it will benefit you to create a plan to pay off your debt. The primary focus will be your student loans and other high-interest debt like credit card debt. You will want to have the right strategy in place to manage this type of negative debt.
Generally speaking, with credit card debt, you will want to pay that off as soon as you can.
For student loan debt, making sure you have the right student loan repayment plan in place for your situation is imperative. There are many nuances you should be aware of when considering PSLF, refinancing, or other options. Making the wrong decision about how to handle your student loans can cost you thousands of dollars.
One of the best reasons to start early with financial planning and investment is compound interest. Compound interest is your friend. What's that you say – what is compound interest? If you are not familiar with that term, compound interest is when the interest you earn on a balance in a savings or investment account is reinvested, earning you more interest. Your money may not grow much initially, but after several decades, the interest will grow much more quickly than year one.
The idea of maxing out your qualified investments may seem like a broken record to some and a foreign language to others, but you are investing for the long term. When possible, you will want to max out your 401(k), your backdoor Roth IRA, and other qualified investments.
It can be a challenge when you are first in your career. There are so many things that compete for your attention, but it is essential not to become distracted or overwhelmed by your financial goals. Remember to live within your means and not get distracted by what others have. Here are few ways to keep you on track and help establish good financial habits.
If you are a physician in the first third of your career, you are probably considering some if not all of these issues. With the lengthy education and training requirements for doctors, they tend to lag behind their counterparts in other professions regarding savings and financial planning. However, all is not lost; with intention and discipline to creating a financial plan, you can lay the foundation of life-long financial health.
The financial professionals at Spaugh Dameron Tenny are here to provide you with guidance when you are ready to create a financial plan. We understand that our clients have their own unique situation. Plans are developed to reflect the specific position and nuances for the client. We also know that it is essential to look at this big picture and not just individual parts to truly develop an all-weather plan that will support our clients' needs no matter where life takes them.
Developing a financial plan that fits your needs starts with getting your finances in order. It's not a very exciting item on your to-do list, but it can save you time and money in the long run. Download our checklist to help get your finances in order!
For over 50 years, Spaugh Dameron Tenny has provided comprehensive financial planning for physicians and dentists in Charlotte, NC. In addition to providing personalized advice, we walk our clients through their options to help maximize finances and maintain financial security.
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