If your finances are keeping you up at night, there’s no better time for a financial reset than at the start of a new year. According to a report from Cihi, Canadians aged 25 to 34 often worry a lot more about money for their rent or mortgage than those in any other age group. The good news is that even minor adjustments can have a significant influence on your financial future and your mental well-being.
Here are a few pointers to help you improve your current financial situation and reach your long-term goals!
- Write Down Your Money Goals
Start off by making a list of your financial objectives. How you want your future to look along with any challenges you foresee. As a medical resident, your financial objectives should be reasonable and attainable, whether they include paying off your student debt, saving for a child’s education, indulging in hobbies or interests, or saving for retirement.
- Plan Out Your Budget
You’re not imagining it: items are becoming more expensive as inflation continues to rise. Prices for everyday household items, as well as necessities like gas for your car and food, are increasing substantially. Additionally, as the epidemic enters its third year, the desire to get back out into the world and indulge in discretionary expenditures is growing.
To keep your spending under control so you can stay on your financial track, create a budget to help manage your spending on household necessities and discretionary items.
As a busy medical resident, you should use tools like creating a personal spreadsheet or downloading a budgeting app to your phone. Also, check in with your bank for budgeting tools to help you better budget for your financial goals.
- Work on Your debt
Confront your debt head-on. Being in debt can sometimes feel worse than it actually is. That’s why it’s always better to rip off the band-aid and take a look at it right away before it becomes unmanageable. By knowing what you owe and being okay with what needs to be done in order to achieve your financial goals, you are taking control of a major piece of the metaphorical puzzle. Don’t be afraid of your debt, conquer it!
- Search for Ways to Reduce Your Taxes
If you really want to get ahead of the “game”, tax preparation should be done all year long. Take a proactive approach and make sure you are aware of the credits and deductions you qualify for. Effective tax planning comes down to keeping track of your income and making investments so you can ensure you don’t pay more tax than you should.
A registered retirement savings plan should also be part of your financial strategy. Your Advisor can assist you in determining the most tax-effective methods, such as household tax-saving techniques, income splitting, and if you should incorporate tax benefits. Talk to our team today to stay ahead.
- Set Up Automatic Contributions
Pre-authorized contributions automate your savings and keep you on track. PACs allow you to invest on a regular basis by automatically transferring funds from your bank account to your investment account, so you control the amount and frequency of the transfers. You are busy with your medical residency so this will help to ensure you never miss a payment because it’s automated, which makes investing easy and helps you keep to your budget.
- Check Your Medical Expenses
Did you know that most medical professionals don’t know how to properly deduct their own medical expenses..kind of ironic, right? One of the important ways to save on medical expenses is to know your insurance plan. Read your insurance policy carefully to understand what charges you are accountable for. Examine which costs are covered versus which are not, and by how much. Knowing your insurance company’s formulary or the list of prescriptions it will cover can save you money in the long run.
Wrapping it Up
By investing in yourself and increasing your financial knowledge, you are taking action on one of the most beneficial resolutions you can make this year. Focus on setting realistic goals, confront your debts, budget, and save where possible, These simple strategies will go a long way towards building a stable and profitable financial future. With strong financial knowledge and a strong financial partner, you have the power to maximize your potential so you can live life on your own terms. MedTax guides and prepares residents at every stage of education, learn more here.
Ready to take your finances to the next level? Reach out to a member of our team here and we will walk you through our process and how we help Medical Residence just like yourself take more control over their financial future.
