Smart Money Moves for Doctors in the New Year

A new year brings the opportunity for a fresh start. Now, that doesn't mean you need to start from scratch. Instead, it gives you the chance to review and audit what you are doing and what you are not doing to determine if anything needs to change.

Spaugh Dameron Tenny has compiled a list of savvy money moves that financial planners frequently recommend for physicians and dentists to consider. While all the suggestions are not for everyone, you can find and implement the ones that make the most sense for your financial situation.

See how many of these smart money moves work for you!

Set Up Automatic Transfers

Recommended by Shane Tenny, CFP®, Managing Partner

Set up an automatic transfer from your checking to savings. Automating your savings is one of the best ways to reach a financial goal. Not having to think about it is critical. Set it and forget it, and you will not miss the money coming out of the account.

• Set up the transfer to occur once a week or once a month. Or you can even schedule it to coincide with the days you are paid.
• Choose the amount that makes sense for your financial situation or goals. If there isn't a specific goal, the amount can be whatever you want it to be - $100 - $1000 – and anything in between.
• By automating your savings, you are making it easier to save.
• **Pro-tip: make the amount coming out a random number, so the transfer amount is challenging to place in your mind.

Experts suggest that you are more likely to hit your goal by automating your saving than if you choose to transfer money to a designated account manually.

Avoid Lifestyle Creep

Recommended by Jordan Bilodeau, CFP®, Director of Financial Planning

When you transition from residency or fellowship to practicing, not only does what is expected of you change, so does your earning power. You want to take advantage of your income and not just spend it without knowing where it goes. Two considerations include:

• Increasing your automated saving when you receive a salary increase
• Boost your retirement plan savings

Increase Your Retirement Contributions

Recommended by Jordan Bilodeau, CFP®, Director of Financial Planning

Make sure your Retirement Plan and Health Savings Account contributions are up to date with the new IRS limits.

• The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans is now $20,500 (2022) from $19,500 (2021).
  • The catch-up contribution was unchanged for those over the age of 50; therefore, the total eligible for those over 50 is $27,000.
• The contribution limit for a Health Savings Account has increased to $7,300 for families and $3,650 for individuals. Be sure to understand how your employer match can affect your contribution amount.

Take a Refreshed Look at Your Student Loan Strategy

Recommended by Will Koster, CFP® and Certified Student Loan Professional®, Financial Planner

With the Administrative Forbearance expiring in 2022, student loan payments and interest will resume for the first time in over two years! Consider what has changed in your personal situation during that time period.

• Have you had a child? Did you know that your "household size" affects your Income-Driven Repayment calculation?
• Did you get married? How does your spouse's income factor into your strategy if your spouse is working?
• Have you experienced a change in your income or employment?
• Should you consider refinancing your student loans?

Make Time to Review Your Financial Strategy

Recommended by David Belinkie, CFP®, Financial Planner

• Take a look at your overall investment strategy to ensure that you are still at the most appropriate risk level to give you the highest probability of long-term success in reaching your financial goals. Unfortunately, this can sometimes tend to get out of balance after certain areas of the market have performed significantly better than other areas of the market.
• Audit your overall cash flow game plan to confirm that you have an appropriate mix of spending for today vs. saving for the future.

Protect Yourself and Your Credit

Recommended by Bryce Miller, CFP®, Financial Planner

Consider implementing a credit monitoring service like LifeLock and freezing your credit if you are not looking to add on new debt obligations like mortgages, car loans, credit cards for the foreseeable future. Other ideas include:

• Sign up for transaction alerts with your financial institution(s).
• Check all your financial accounts for errors or suspicious activity.
• Always use strong passwords and be aware of the information you share.
• Use Multi-Factor ID

With the financial world becoming more digital, protecting your information and identity is essential.

Ready for the New Year?

This list is by no means complete, but it gives some ideas of what you can do to start 2022 off on the right foot financially. Spaugh Dameron Tenny specializes in the unique financial planning needs of medical and dental professionals. So whether you are completing your training or entering retirement, let our team of financial planners help you begin the new year with the smart money moves that best suit your specific financial situation.

CRN202412-1451072