As medical professionals, you work hard to earn your income, but is your money working just as hard for you? We’ve compiled a list of six simple yet powerful strategies to enhance your finances and help you achieve your financial and life goals. This list is just a starting point, so feel free to add your own ideas!
By cultivating the right mindset and adhering to these principles, you’re more likely to achieve financial success.
1. Budgeting
Budgeting is determining where your money goes rather than wondering where it went! There are lots of quotes that I love in this area of financial planning; such as…
“It’s not the size of your income that makes you rich, it’s the size of your expenditure”
You should have a good idea of where your money heads each month. Knowing the difference between your essential and discretionary expenditures helps you make informed decisions about further commitments, from holiday plans to monthly bills.
Often seeing your incomings and outgoings in black and white can help clarify exactly what money you do have – so why not create an Excel sheet? If you are not an Excel guru why not try our free secure budgeting tool? Launched in January 2023 our budgeting tool helps you organise, budget and monitor your spending, all from a free secure client portal. Instructions on how to use the portal can be found here. Other apps are available!
When I meet a new client, this is the first step to relieving their financial stress. Why not try it?
2. Over Stretching
This ties closely to the first point: mastering your budget can prevent you from over-committing. Common pitfalls include oversized mortgages, car loans, and school fees, often leaving little room to enjoy life or save for the future.
Reflect on your income over the last five years and ask yourself, “What do I have to show for it?” If you are unhappy with the answer, it may be time for careful planning and restructuring to ease financial strain. If this task feels overwhelming, consider seeking professional assistance. Our financial advisers are here to guide you back to calmer waters and help you achieve financial stability.
3. Failing to plan is a plan to fail
Recently, I attended a driving course (two wheels, of course), where the instructor emphasised the importance of looking ahead. He explained that one wrong turn can lead to a series of mistakes. This concept is a perfect analogy for financial planning: establishing good habits early on can make a massive difference in your financial journey.
Arguably, the most crucial aspect of a financial adviser’s role is to develop the right strategy and ensure you stay on track. Even if you’re not as far along as you’d like it’s never too late to start.
This leads me nicely to my next heading…
4. Teaching (your children)
Teach your children the value of money early, not only how to deal with money but yes, how to budget.
This may sound like parenting advice, which I am not qualified to do….BUT there is a reason I bring this up. Bank of Mum and Dad is a well-known concept and more often than not it is where many children see their emergency fund being.
The earlier your children grasp the concept of how money works and learn how to save their money, the more likely they are to achieve financial independence.
5. Protecting
Building your financial wealth takes many years but can be taken down very quickly! I always strongly advise clients to protect themselves as they go along. This could include your ability to work, your health, your family or the walls around you. Without an income or your health, none of the above is possible – your health and your ability to work are your greatest assets so make sure you protect them.
6. Saving
Not saving and not starting early. Einstein is supposed to have said:
“ Compound interest is the eighth wonder of the world, he who understands it, earns it…he who doesn’t pay it”.
In essence, it is achieving growth on your investments and that growth attracting growth. So, start saving early and allow for savings within your budget.
Finally, a few quick wins…
- Check your direct debit mandates. Do you know what they all are and most importantly do you still need them all?
- Renewals – car insurance, breakdown insurance, house insurance etc. It’s always worth discussing the ‘best price’ with your provider and getting other quotes to ensure you have the best deal.
- Mortgage – Are you on a competitive mortgage rate? Remember, the cheapest option isn’t always the best. It’s about finding the right strategy for your situation. With rates currently high, expert advice can make all the difference. Securing the right rate now can help you achieve your future goals. We can help you navigate your options.
- Cash deposits are typically losing value due to inflation, even with higher rates seen recently. As cash rates begin to decline, it’s crucial to review the rates your bank offers. Establishing an emergency fund should be your priority, and consider if any surplus money could be working harder for you.
Do you have any financial money-saving tips to add to the list? Let us know by adding a comment below.
This is an update of an original article posted in June 2021.