(This article is part of the ongoing column 12 Steps to Success.)
“Most in veterinary medicine fall into the same trap as those outside the profession—procrastination. Few people take action and begin saving for retirement early in their careers, and the penalty for waiting is huge.” —Fritz Wood, CPA, CF
Finding veterinary caregivers who entered this profession purely for financial gain is difficult. Most of us are here to help animals and people, not to make ourselves rich. However, we should aspire to 2 goals: financial stability and retirement. A personal financial plan is important, regardless of income level. Following are 5 steps to create a plan that avoids the pitfalls common among medical professionals.1
1. Make Saving a Priority
We cannot build wealth if we spend all the money we make, so saving is important.1 New veterinarians may feel a strong urge to spend freely after getting their first job, whereas expenses may make saving very difficult for others. Saving resources is critical, especially early in our careers.
Some financial planners recommend small, regular, automatic deposits into savings accounts. It is best to start by building an emergency fund, followed by a retirement account.2
2. Buy the Right Amount of Insurance
Preparing for the unexpected, such as illness, disability, death (your own or a spouse’s), or property loss is important, but being over-insured also has great drawbacks. Overspending on insurance may limit your ability to save, whereas too little insurance may leave you or your loved ones open to disaster. Protect yourself with the right kinds and amount of insurance.