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Was 2015 the year you swore you'd get your finances in order? Update your patient scheduling systems and electronic health records? Pay down that dental school debt, start the college savings plans for the children, max out on that 401(k)? Whether or not your met your goals, here are some things to consider as we near the end of the year.
Was 2015 the year you swore you’d get your finances in order? Update your patient scheduling systems and electronic health records? Pay down that dental school debt, start the college savings plans for the children, max out on that 401(k)? If you did meet your goals in 2015, there’s no ribbon or reward. Stay the course!
Whatever your financial goals for 2015 were, and whether you met them or not, don’t dwell on it. If you didn’t meet your goals in 2015, take this opportunity to look back. Not to focus on your lack of success in 2015, but to create your financial roadmap for 2016 and beyond. Here are some things to consider as we near the end of the year.
Tackle your 1 thing. For our sister site, Physician’s Money Digest, I wrote recently about your one thing—the one task or responsibility that is not only eluding you, but it may be gumming up your entire financial plan by gumming up your progress. The end of the year is the perfect time to address that thing and start with a fresh palette this January.
Evaluate your scheduling, patient record, billing, and other data systems. Technology has improved your personal life and your dental practice, but one of the things about technology is that it depreciates faster than physical assets. Even that brand new electronic health record you purchased one year ago is probably in need of an update. Talk to your technology providers about how often you should evaluate, reassess, and potentially upgrade the tools you use to schedule and manage patient records and billing. It may be more often than you think.
Plan to max out your contributions next year. If you are a dentist at a large practice or are running your own practice, chances are you have some sort of retirement plan established, or at the very least are contributing to an individual retirement account. If you do absolutely nothing else during the end-of-year season or in all of 2016 to take control of your finances, set up your payroll deductions to max out the contributions to this plan. If you don’t have a retirement plan set up for yourself or your employees, that should be your 1 thing!
Update your beneficiaries on retirement accounts and insurance policies. This step doesn’t have to be done at the end of the year, but it’s a good time to think about it. Why? Because the holidays roll around at the same time every year, and you should check and update your beneficiaries at least annually. Even if you’re young and healthy, it can also be a good time to make sure your will and any trusts you have set up are up to date.
Adjust your tax withholding. If your life situation has changed, either through marriage or divorce, or the birth of a child, or even if you’ve simply had a significant adjustment in your practice’s revenue, you should probably update how much you set aside for Federal and State taxes. Though you may not wish to think about 2015 taxes until April, employers are required by law to provide tax statements by January 31. The sooner you can get a sense of what you paid last year versus what you owed, the sooner you can make adjustments.
While we all love the idea of a big tax refund, the simple truth is that if you get a big refund every year, you’re essentially making an interest-free loan to the Federal or State government. That’s money that could be working for you instead.
The end of the year financial review doesn’t have to be about kicking yourself for not having a great 2015 financially. Use it instead as a kick-start into a financially productive 2016.