As predental students we are always trying to be immersed in the scientific and medical world. The world of business and finances is far from the mind of the typical science student. But ask any dentist who has recently graduated and they will tell you, “I wish I had learned more about finances.”
It’s hard to imagine learning about things like investing, 401(k)s, retirement, etc., while we are in undergrad, but the earlier we start to investigate finances the further ahead we will be as practicing dentists. This is very important, as many of us will enter into private practice and manage our own businesses. Unless we take some accounting or business classes during undergrad, no one is going to teach us much on these matters. I also haven’t heard of any dental schools placing a large emphasis on business classes, unless you enter a concurrent MBA program. So if we aren’t taught finances in undergrad or during dental school, what will we do with the income we earn during our first year as dentists?
One of the key steps towards taking control of our finances is to learn to live below our means. This essentially means to live off of only part of your total income and save and invest the rest. This sounds like a simple concept, but one that can have profound effects on our future lives.
The types of choices it takes to live below one’s means are what often set the millionaires apart from the non-millionaires. In Dr. Thomas Stanley’s book, “The Millionaire Next Door,” he observed that contrary to the Beverly Hills lifestyle we imagine, most millionaires are simple people that earn less than six figures a year. The thing that sets them apart is that they live below their means. They do not live like paupers, but they do their best to buy used, borrow from friends and be frugal.
This can be played out when shopping for a car. We know the value of a new car drops tremendously the moment we purchase it, so why not buy a used car? Another way to cut down on costs is to eat food prepared at home. Eating out is great, but it can be expensive. And at the end of a semester, before buying any new books, trade and sell your old ones and look for used ones online or from friends.
One of my favorite resources for financial advice is The White Coat Investor. The advice given on their site is aimed at physicians and dentists. You can find anything from how to pay your own taxes to investing advice.
If you want to start living below your means and saving money now, read the Money Monday posts on this blog. Two that might interest you are: “Things you should never (or almost never) buy new,” and “How to spend (and not spend) student loan money.”
What ways have you found to save money in dental school? Offer them up to other students in the comment box below!
~Devon Kooi, Sam Houston State University ’13, predental