Doctors, surgeons, and other specialized healthcare professionals have arguably some of the toughest and most demanding jobs in the world. Late working hours, chaotic schedules, and little to no personal life are just the way things are for most healthcare professionals. Luckily, the healthcare profession is just as gratifying as it is demanding.
Unfortunately, financial planning is often very low on the priority list for busy healthcare workers; when it should be nearer the top of their priority list.
What Is Financial Planning?
As the name suggests, financial planning is a step-by-step plan or approach that helps guide one through their life journey.
Working with a financial advisor, a financial plan is created and adapted to align with short and long-term financial goals.
Having a written plan allows one to better manage income, expenses, and investments which results in increased financial discipline and more informed decision-making.
You can think of financial planning as a blueprint or roadmap that leads to achieving your life goals. Having a sound financial plan in place can help eliminate debt and overcome unforeseen financial hurdles that may arise during your life journey.
Is Financial Planning Beneficial For Healthcare Professionals?
Doctors, surgeons, and other medical professionals have more challenging career paths and the financial challenges and situations they face can be a lot different than other types of professions.
Thus, healthcare professionals can greatly benefit from having a sound financial plan in place that allows them to be financially independent and enjoy an improved standard of living even during the earlier stages of their careers.
Financial planning can help with strengthening short-term and long-term financial security. Working with a financial advisor also leads to a better understanding of financial markets and money management. With the right financial plan, one can also prepare for a well-deserved early retirement.
Working with a qualified financial advisor allows you to create a long-term strategy that helps you achieve your financial goals, no matter what they may be, and acts as a motivator to help you get through such a demanding profession.
5 Financial Planning Tips For Healthcare Professionals In Canada
1. Create A Tax Efficient Plan To Service Student Debt In A Timely Fashion
Choosing a medical profession is a tough and expensive career choice. Becoming a doctor or surgeon requires many years of studies and can cost a fortune if done privately. This is why many aspiring students seek out student loans to be able to pay for tuition and living expenses.
However, as soon as you graduate and enter the workforce you are essentially knee-deep in student debt. While getting rid of this debt as quickly as possible is beneficial, it needs to be serviced through an efficient tax plan that takes into account your existing debt repayment schedule.
Most physicians will incorporate their practice upon finishing residency which allows them to dictate their income and minimize the amount of high-rate personal tax needed to be paid. This is why it makes sense to have a tactical repayment schedule in place to ensure that your personal finances are tackled in the most tax-efficient manner possible.
2. Begin Financial Planning As Early Into Your Career As Possible
As a healthcare professional, you need to start financial planning as soon as you land your first internship or job. This is because speaking with a financial advisor will help you realize just how much you need to grow and earn to meet your life goals.
Even though initial salaries might not be even close to what you need as you gain experience and grow your salary will reflect that. Many healthcare professionals wait until they reach the pinnacle of their careers to start financial planning. However, this is a mistake.
By getting an early start you will learn about the importance of curtailing expenses, paying off debt, and saving. This way by the time you reach the height of your career, you will be in a much better position to achieve set financial goals and have an already built-up investment portfolio for your future financial security.
3. Develop Money Management Skills
Even though healthcare professionals have some of the highest-paid jobs in Canada that doesn’t mean they can’t benefit from money management skills. Just because you earn more doesn’t mean you have to be frivolous with your hard-earned money.
Sure, you earn to spend. However, you also earn to save and invest. Without understanding the importance of curtailing expenses, saving, and investing it will be hard to achieve set out financial goals.
A top tip is to always apply the 20-30-50 rule when it comes to money management. Out of your total income, 20% should be saved and set aside, 30% should be invested or used for non-essential expenses, and 50% can be spent on essential expenses.
By following this simple rule you can better manage your finances from an early age and can get a head start on securing a brighter financial future.
4. Always Keep An Emergency Fund
No matter how much you earn you need to set aside money for an unforeseen emergency. Working in the healthcare profession you are likely used to dealing with emergencies every day. Just like a medical emergency, a financial emergency can also occur at any time and from anywhere.
You need to have action plans and save up money to deal with unexpected financial hurdles such as losing your job, being involved in an accident, incurring an injury, etc. Having an emergency fund set aside from an early age will allow you to be more prepared for any curve balls that come your way.
5. Consider Succession/Estate Planning
Successful healthcare professionals often neglect to think or plan for a future in which they are no longer alive. This is perfectly understandable but planning for your family and children’s future after you are gone is essential to their future welfare.
Succession planning or estate planning options can be excellent ways to protect your assets from creditors and also prevent future family feuds. The transfer of assets to beneficiaries is also made much smoother with an estate plan with minimal legal and tax implications.
Specialized Financial Advisory Services For Healthcare Professionals In Canada
Healthcare professionals should always seek financial advisors that specialize in wealth and asset management for those working in the medical industry.
Healthcare professionals, especially doctors, can greatly benefit from financial advisory services that specialize in asset management, financial management, risk management, tax planning, estate planning, and retirement planning for medical professionals.
At Eastport Financial we do just that! Our financial advisors have worked closely with highly reputed doctors and medical professionals to help them achieve their lifelong goals. Give us a call and let us help you achieve yours!