- December 6, 2017
- Posted by: Quarles Business and Financial Strategists
- Category: Financial Advice
How to Avoid Common Financial Mistakes Young Doctors Make
You have spent years scrimping and scraping to put yourself through Med School, more than likely you have also come out with a significant amount debt. Now it is your turn to live in the lap of luxury, right?
Well, just because you have the title of Doctor does not mean life automatically gets any easier. If anything a lot of young Doctors are commonly seen making the same financial mistakes when making the transition from Student to Doctor.
Want to make sure all those years living on Mi Goreng were not for nothing? Well keep on reading and find out how to avoid common financial mistakes young doctors make and prepare yourself for your financial future.
How to Avoid Unnecessary Debt
We are not going to tell you to avoid debt altogether. That is pretty naïve when the average Australian medical education costs hundreds of thousands of dollars. Very few people can afford that without going into debt, whether to the government or a bank, it is an unavoidable part of a medical education.
However, what you should avoid at all costs is getting into unnecessary additional debt. It is something that is all too common especially with Doctors fresh out of Med School.
Some end up in this position in an attempt to keep up with “The Jones”, not wanting to be that Doctor driving a bomb of a car and sharing a flat with three strangers. Others get into further debt because of a false sense of entitlement after years of sacrifice and the assumption of guaranteed income in the future.
The best practice is actually to try and keep living as you did in Med School for about 2 – 5 years after. This gives you time to make substantial headway in paying off your Med School debts as well as to put yourself in a sound financial position in future, rather than being buried in debt.
Don’t Make These Mistakes on Your Taxes
Gone are the days of having an income within the tax-free threshold range. You will likely have a HECS Debt that the government will be requiring you to pay back due to your increased taxable income. Also, this means you will be required to pay the Medicare Levey Surcharge if you do not have Private Health Insurance. There will be numerous changes to your taxes that will take place after finishing Med School.
Don’t make the mistake of trying to continue preparing your taxes on your own. Complicated taxes are best left to the professionals. Invest in the time of a professional who will be able to help you with Tax deductions and provide you with a Tax strategy for future. The money it costs to hire a professional is nothing in comparison to the time, money and sanity they will save you at tax time.
Learn How to Pay Less Tax and Save Money with this handy article.
Before You Accept a Job Offer, Think About This:
Again this mistake is rooted in the desire to have a decent income after years of being a student with massive debts. It can be very exciting to be offered a position that pays higher than anything you have ever received before. However, don’t let this tempt you into taking the first offer you are given. Learn to negotiate.
Even if the position is your dream position, don’t just accept the terms laid out by your potential employer. Think about what is important to you and what you want in your future, not just monetarily either. For example, if you are a young female Doctor who plans to raise a family in the future, you may negotiate to work fewer hours during the week or over summer if that is important to you.
Save for Your Future Today
It may not be the most attractive thing to tell young doctors that have been living on peanuts for years. However, saving for their future is something they should take incredibly seriously. Once your Med School debts are paid off you need to start thinking about your future and where you want to be in 5, 10, 20 years.
Most people have around 40 working years to save for their retirement after finishing studying. Due to the length of time required to study and a significant amount of debt to pay off, Medical Professionals are well behind the eight ball. If you add into the equation wanting to buy a home, start a family etc you might not start seriously thinking about your retirement until it is too late.
Take a look at: What is a SMSF? Is a SMSF right for you?
You have already invested in your education; now it is time to invest in your future and yourself. We have been helping Medical students and professionals solve their financial problems for more than 40 years.
Click the button below and fill in our form for your Free Initial Consultation and find out how we can help you plan your future.