Gain Greater Financial Confidence
Tips to help boost your outlook on the future.
Considering all of the major and minor financial decisions involved in running your practice and keeping your personal finances in order, it's understandable if you sometimes feel overwhelmed and uncertain - in fact, you are not alone. While 49 percent of physicians in a 2013 American Medical Association Insurance survey said they are knowledgeable or very knowledgeable about personal financial planning, just 21 percent felt very confident that they are making the best personal financial decisions. Fifty-nine percent said they are only somewhat confident, and the remaining 20 percent are not confident.¹
You may be able to boost your personal financial confidence with some straightforward steps, including:
Setting an Organization Plan
Just as you gather facts about a patient's history and current condition when preparing to treat him or her, so should you review the past and present state of your finances. Begin by making a list of your income and other assets (investments, cash savings, property, etc.) and a list of your liabilities (mortgage or rent, car payments and other expenses), which may give you a clearer picture of where your concerns are and how to address them. Review the past year and identify any financial issues that created trouble. What can you do to avoid those situations in the future?
Saving Regularly (and Diligently) for Retirement
When it comes to retirement preparation, just 6 percent of physicians feel ahead of schedule, according to the AMA Insurance study, while nearly half (48 percent) say they're behind where they'd like to be.² In fact, 41 percent of physicians say they have less then $500,000 in retirement savings.³ In light of those figures, consider contributing regularly to your 401(k) or individual retirement plan and boosting your contributions whenever you can.
Preparing for the Unexpected
Although the future is by definition full of unknowns, having a backstop in place for contingencies may remove those nagging concerns and boost your confidence. The nonprofit organization American Consumer Credit Counseling recommends having at least three to six months of your salary in reserve for emergencies. You can calculate an appropriate emergency fund for your own situation at consumercredit.com.4
Working with a Financial Planner
Your patients visit you for your expertise in the human body. Consider taking a similar approach and seeking out guidance from a trained financial advisor for help developing a sound financial strategy and a greater sense of confidence in your ability to meet whatever the future brings.
1 American Medical Association,"2013 Report on U.S. Physicians' Financial Preparedness," pages 9, 10. amainsure.com/resourcecenter/2013-report-on-physicians-financial-preparedness.html
2 AMA Report, page 7.
3 AMA Report, page 19.
4 American Consumer Credit Counseling. consumercredit.com/financial-education/financial-calculators/emergency-fund.aspx