Forget cleaning your home! It’s boring, and let’s be honest, in two weeks it’s going to be a mess again anyway. You’re busy helping people and only have so much time. This spring I suggest you clean up your finances. To help you get started, I offer six questions for you to ponder:
Am I saving any money?
I know, this is an obvious one. However, if you believe the national statistics, roughly a third of you reading this will answer “no.” If that includes you, how can you change that? The easy answer? Cut frivolous spending! That’s not always appealing, however. Who wants to worry about whether they can afford two or three lattes this week? Instead, I suggest asking if you could earn more. Clinicians are in high demand! Grab a PRN (pro re nata, or “as necessary”) job for one weekend day a month or work at a summer camp.
Am I saving for a reason?
If you’re saving, do you know how much? Are you doing it just because you should or do you have a specific reason? Reasons drive how you position your savings. If saving for retirement—invest. If you want a down payment for a car, probably don’t invest. In addition to specific needs, set aside funds for emergencies. I recommend two or three months’ expenses as a starting point. Knowing how much you need to put aside systematically to achieve your savings goal increases behavioral change. Saving becomes routine.
How did I come out in taxes?
If you paid a lot in taxes this year, lower the burden next year. Employee benefits are a great place to start.
Could you contribute more to a health savings account or retirement plan? Both can lower taxable income. A big refund might mean lowering your withholding for better cash flow throughout the year. That means more monthly savings! Just send an updated W-4 to your payroll department.
Do I have any MIA retirement accounts?
When jumping around different settings and positions—especially early in your career—it’s common to leave a mishmash of accounts in your wake. Don’t forget about them! Old 403b and pension contributions from that first hospital job you took? A leftover 401k or TIAA fund from the school system where you worked for a year? You can merge all of them into one retirement account. This helps organize your assets and ensures that investments suit your current situation.
Do I have a plan to deal with my student loans?
Did you setup automatic payments post-graduation and never thought about it again? As a communications sciences and disorders professional, you have myriad loan repayment options at your disposal! Above average income means refinancing is in play. Do you have any private loans with high interest rates? The variety of nonprofit employment offerings makes federal loan forgiveness a significant opportunity. Have you researched these possibilities? Even if you can afford your payment, forgiveness may be a favorable alternative.
Am I paid my fair-market rate?
Out-prepare your boss for your next performance review. A raise is always a healthy elixir for your finances. Use sites like payscale.com and glassdoor.com to compare your salary. Talk to your peers. Analyze your productivity numbers. Are you out-performing them? Smile and be polite, but don’t instantly agree with an offered increase. Be prepared to confidently make a fair counter above the initial offer.
Jacob W. Parish, a certified financial planner™ professional, focuses on helping audiologists, SLPs and other young health care professionals navigate financial planning issues. Visit his website, Schooner NextGen or email at email@example.com. Securities and Advisory services are offered through Geneos Wealth Management, Inc., member FINRA/SIPC.