When I meet with dental students and residents at several different schools and programs, one of the things I hear most is that finance and tax are things that “they don’t teach us in dental school.” Today, I thought we would look at some of the things that they don’t teach you in dental school, but will be just as important as your degree once you finish:
- What happens if you don’t get a job right after school? Depending on your student loan grace period, you might have to start making loan payments shortly after graduation. If you plan to move to another state or don’t have a job lined up right out of school, you may not have income to support loan repayment. If this is the case, it is not only important to create a budget to track your spending, but also to look into your loan’s options for income-based repayment, which allows you to repay on a reduced basis. Repayment is tied to your income level. Income-based repayment can be a good option (even if just for the short term) for those whose income level is lower than they had anticipated.
- Disability and life insurance: Do you really need these? Every professional working in the medical or dental industry needs disability insurance unless you have wealth and savings that could replace your income for the rest of your life should something happen to you. Life insurance is often sold to new professionals as any other insurance policy. However, if you do not have a home with a mortgage, you do not yet have children or you have a working spouse, life insurance is not entirely necessary…yet. As you age, policies typically get more expensive, but most people in their 20s and 30s who are relatively healthy should be able to get policies with reasonable premiums. Wait until you have something to truly replace to get life insurance.
- Your credit score really matters. We have harped on this before, but getting a loan to buy a home, a car or a dental practice is not as easy as qualifying for student loans. As a student, a lot of people will lend you money, whether it’s student loan funds or credit card debt. Until you have built up some assets (think home, car, savings account), accessing additional funds can be extremely difficult, so keep your spending down and pay off your credit cards timely.
- Have a goal. Every financial advisor will tell you to save for retirement. I’m no exception. It can seem daunting to think about retirement when you are still drowning in student loan debt. However, there’s no better time to start than now. Instead of aiming high, start with a small reachable goal (maybe $100/week). As income increases and student loans decrease, increase your savings goal. Do this in other areas too, whether it be emergency savings goals or reaching the goal of spending less. You have heard the saying, “a little goes a long way.” This is true when it comes to making changes in your financial health as well.
~Megan Mathers, J.D., Mathers Law
About Megan Mathers
Megan is an accountant and tax attorney with Mathers Law, a firm focused on providing accounting, tax, business advisory and legal services to the dental and medical communities. Megan earned her Bachelor’s Degree in Accounting from Marquette University and her law degree from Loyola University Chicago School of Law. Megan’s practice focuses on tax compliance, tax planning and wealth and estate planning.