Financial planning

In the past few issues we have been concentrating on how to keep your head above water whilst you progress through your dental course. However, good financial planning

when you graduate is just as important.

Keeping your money in check takes on a whole new meaning when you say goodbye to dental school. Yes, you have a wage coming in, which makes a welcome change from having to rely on government or parental support, but this also means that some of the student loans that seemed so attractive at the time will need to start being paid back. You will also be looking to the future and may want to treat yourself to a new car, holiday or commit to buying your first property. There is no reason why you can’t achieve all of this with some careful consideration, help and advice.

Financial planning is a rather dull term that can be turned into something quite satisfying, even fun. After all, we are talking about what you can achieve with your money and the possibilities are endless if you have a handle on what you want in the future and how that fits together with your finances. Essentially, financial planning looks at all the different areas of your finances and highlights how they interact with each other so that you can make decisions which take in all aspects, rather than looking at everything individually.

Obviously financially planning can be a minefield and difficult to understand, especially if you are embarking upon it for the first time. The best thing to do is to find an Independent Financial Adviser (IFA) who can talk to you about your financial status, where you are headed and all of the different products on offer. First, the IFA will ask you about your current situation.

It is important at this point that you are honest and upfront so that the IFA can advise you in the best possible way. They will then talk to you about where you see yourself financially in the future, covering short, medium and long-term goals. This is where you can talk about saving for a deposit on a property, splurging on a car or undertaking further study.

You will then move on to the second stage which involves an assessment of where you are now, highlighting your strengths and weaknesses and what you will need to commit to in order to achieve your financial aims. For someone who has spent years studying and is just managing to get on their feet financially, this can feel like a daunting process. However, if you get into the habit of reviewing your financial position like this now, then it will become second nature to you in the future when you are feeling much more confident.

Also, don’t forget that as a young professional you are seen as a good prospect for many financial services companies, so they are likely to bend over backwards to attract your business. Bear this in mind when you are talking through the next steps with your IFA, and it may give you the confidence to talk about possible commitments in the future.

Hopefully at the end of this process you will have made some informed choices about what you want your current and financial future to look like. Whether that includes ISAs, pensions, income protection or mortgages make sure you don’t over-commit yourself and always take some time to think about any decisions before you go ahead. Also, make sure you have talked through with your IFA any potential risks or pitfalls associated with each product, so you are fully aware of the consequences of inflation, taxation and interest rates on your money.

Finally, remember that whatever you decide now is bound to change in the future. Nobody can predict what strains will be put on their wallets, or indeed how much they will earn throughout their career. Therefore, it is paramount that you continue to review your situation at regular intervals and make alterations according to your changing priorities.

Financial planning may seem like an irrelevant part of the banking world at the moment, but the quicker you wise up to its benefits the quicker you can maximise your earnings. And who knows, debt could be a distant memory in a few years’ time. Well, we can dream can’t we?

For further information on finding an Independent Financial Adviser, visit The Association of Independent Financial Advisers at www.aifa.net

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