As you begin practicing and earning an income, now is the perfect time to get organized and create goals for your financial future. We recommend starting early to maximize your investments, increase your savings, and pay down debt faster. Here are our top ten tips to help you achieve financial wellness.
1. Create a financial plan.
A financial plan gives you a personalized strategy, ongoing support and peace of mind. It’s best to work with an advisor on this. Expert financial planning leads to higher savings rates.
2. Create a budget and stick to it.
A good formula to follow is to separate your income as follows: 70% living expenses, 20% debt repayment, 10% investments.
3. Have a plan for how you'll pay off debt.
Balance lifestyle choices (i.e. spending now) against the total interest you will pay. It’s important to have insurance so that debt can be repaid if you die or become disabled.
4. Consider investing while paying off debt.
You’re better off doing both. Define a debt strategy—work with a financial planner to develop it.
5. Don't be afraid of good debt.
It can be used to purchase an asset that grows in value, is tax deductible and improves your career/income.
6. Avoid bad debt when and where you can.
It’s typically used to buy depreciating assets and finance consumer goods. It has no tax advantage and higher interest rates.
7. Understand how a low credit score can hurt.
It can affect a practice loan, a mortgage, your ability to rent, your phone contract and personal relationships.
8. Maintain a strong credit score.
Best practices include: paying your bills on time, limiting the total on credit cards, lines of credit and loans, keeping debt around 30% of your total limit, limiting the number of credit cards, and developing a credit history early. You can build and maintain your credit score with these 8 tips.
9. Understand the risks you face and be prepared.
10. Get professional advice.
Your financial future is too important to be left to chance. One of our Investment Planning Advisors* can help.
- They are accredited and have a minimum of 10 years in an advisory capacity.
- They only serve dentists, dental professionals and their families.
- They are salaried and compensation is not tied to products sold or revenues generated.
We know planning your financial future can be difficult. That's why we're here to help. Get started today by booking a meeting with an Investment Planning Advisor* at CDSPI that works exclusively with dentists and dental professionals.
*Investment Advisory services are provided by licensed advisors at CDSPI Advisory Services Inc. Restrictions may apply to advisory services in certain jurisdictions.