Let me first say that there are a lot more than 5 things you need to do when you graduate dental school. Like get a job for example. But I’ll focus in on a few often-overlooked items I typically find when someone goes through my planning process.
- Create a spending plan – sounds so much more fun than a budget right? You should try to list out all of your fixed expenses. Make sure you budget for taxes if you are an independent contractor. Variable expenses are a little tougher to budget for. Try to make educated guesses at a minimum. And because things are hard to predict, it’s important to review the previous months expenses to figure out where your money went. This will help you keep track, it helps prevent money being spent by mistake (automatically renewed magazine subscriptions, etc.) and will help you meet your goals.
- Make sure you understand your student loans and all of your repayment options. I have seen too many students refinance without realizing there were government plans available to help. In addition, it’s important to stay on top of this. For example, the government just came out with a new repayment program called RePAYE. This program is most helpful for students that have graduated in the last 5 years but it illustrates the point that things are always changing and you need to be aware.
- Get insurance. I know, I know… boring. But it’s really important. And much of it you can’t get as a student, so necessarily, you need to adjust this immediately after graduating. Here are some specifics:
- Personal Liability – More commonly known as car insurance and umbrella coverage, you need to adjust your policies once you graduate. You have to remember that you are not dental student anymore. You have a lot more to protect as a Dentist. Also, many of you are still on your parents policies and need to get your own. Talk to a professional about this. Alternatively, if you’re trying to get the best car insurance quotes, you can get car insurance quotes with comparison site Call Wiser. Make sure you update all of your details correctly otherwise if you have an accident, your insurance policy could be void. If you have ever got into trouble whilst driving, whether that’s for speeding or drink driving, you’ll also need to check out sr22 illinois and buy that insurance too. If you’ve never had any violations whilst driving, you won’t need to buy one of these.
- Professional Liability – Also known as mal-practice, this can be kind of tricky. If you get a job an employee, your employer will likely provide coverage. But you may need to have a policy for working interviews. If you end up as an independent contractor, you will need to have your own policy. The contract language varies by carrier so make sure you understand the nuances. I’ll mention one here. Make sure you understand the difference between claims-made and occurrence based policies. Some carriers offer only offer one or the other so if you don’t ask, you might not even know what you are buying.
- Disability & Life Insurance – Both of these types of insurance protect income. Life insurance protects the income of your dependents if you pass away prematurely and disability insurance replaces a portion of your income if you get too sick or hurt to work. Both of them get more expensive as you get older and more difficult to get if/when your health declines. While life insurance is mostly relevant to those who now have, or will have, dependents in the future, getting disabled is a risk every dentist could face and should plan for accordingly. Term life insurance is usually a good first step for life insurance. Disability insurance can be very complex so make sure you speak with an advisor/agent who has history of working with Dentists.
- Plow cash in your savings account – This will be the easiest time in your life to save money. You are used to living like a broke college student and I would encourage you to continue to do so 1-2 more years after you graduate (or as long as you can handle it). I like to see 6 months (~$25,000) of expenses in a savings account before you do anything else with your finances. So don’t go on a shopping a spree because some people find it really difficult to accumulate this money.
- Buy something nice – seriously, buy something you really want. Just don’t buy everything you want. You’ll find that as a dentist you can buy anything you want and a bank will be happy to finance you including a home with no money down. Just because you can, doesn’t mean you should. One of the biggest threats to your financial success is uncontrolled spending. You’ve worked hard, so do something nice, but make sure you exercise discipline.
Hopefully that gives you some things to think about that you otherwise may have missed. Good luck. ~Ryan Schulte, financial advisor, CFP®