You’d assume that big earning doctors would all have healthy savings accounts. But the harsh reality is many doctors come to us without any saving habits and little money set aside.
Some doctors live pay check to pay check, despite earning a huge wage. This should NOT be happening.
So if you’re a doctor, ask yourself, what am I doing that blocks me from saving?
Here are some of the key things we see that prevent doctors from saving money.
Failing to plan is planning to fail
Without a clear vision of the future or a financial goal, the motivation to save just isn’t there. On the other hand, if you decide on a goal such as an amount to save each month or year, and you have a reason WHY you’re saving, it makes you more focused and determined to put that money aside.
Having a goal amount to have in your savings allows for cognitive decision making and reduces the urge to buy unnecessary items, due to having a target, deadline and a purpose.
Living beyond your means
Everyone is prone to this challenge, even doctors. It’s really easy to get swept up in financial commitments such as school fees, family expenses and life costs, along with bad habits. Stretching yourself too thin means there’s nothing set aside for savings.
And it’s those every day decisions and habits that contribute to a lifestyle that costs more than you earn. It’s choosing expensive items over the more affordable items, thinking you have to have ‘the best’. It’s the five star overseas holidays instead of the local camping trip. It’s paying for everything your kids ask for.
Then there’s the ‘set and forget’ culture, where the sneaky bill is automatically paid each month even if it isn’t being used. Check bank statements and see what subscriptions you’re paying for and whether you really need the multiple streaming services and whatever else is quietly draining your saving potential.
Simply changing your mindset and making some obvious and basic adjustments to the way you life can open up significant saving opportunities, and you won’t have to reduce your quality of life by much to do it.
The comparison trap
Further, feeling like you’ve got to ‘keep up with the Joneses’ by constantly buying the next best thing is one of the best ways to completely erode all of your saving potential. People compare lives all the time, whether through social media, or business and friendship circles. Many doctors feel they’ve got to keep up with their colleagues. But all because your medical specialist colleague has a boat, do you really need one too?
Your goals are different. Your circumstances are different. Your life is different. Comparison and ego has a huge impact on your ability to save, so don’t do it!
Debt is the most dangerous devourer of savings accounts. Having things like a huge mortgage, car loans and credit cards eat any money that comes through the bank accounts before the other things can even be considered. There are ways to reduce these debts such as downsizing, selling and buying something cheaper, refinancing and also even getting rid of the credit card entirely. Dealing with debt should be your top priority as you embark on a plan to start saving.
The best thing medical professionals can do is get advice from specialist medical wealth experts, who know exactly how to help doctors save more and get set up for success.
Consulting professionals for advice is recommended, as there are processes to put in place that can help with debt repayment.
Get in touch with Kym Nitschke and the team of experts at Nitschke Nancarrow now.
The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.Tags: doctors, medical professionals, saving