In these times of economic gloom, it is even more important than usual to know where you are with your finances. While, as a student, financial planning may not have extended much beyond securing the funds for a night out, as a recent graduate you have a lot more to think about. Getting a mortgage, paying off debt and buying a swish, new car are just some of the realities you may have to deal with and it is best to be prepared. Whereas in previous years graduates have enjoyed favourable interest rates and borrowing conditions – which reflected the general confidence in the UK economy – things are starting to look a little tougher
That’s not to say that you need to worry about your financial future. The good news is that, as a dentist, you are attractive to most financial institutions. With a relatively high and stable income, they will be fighting for your business, which means that you won’t feel the credit crunch as much as others.
However, taking time now to pay attention to financial matters is bound to pay dividends in the end and luckily we have the perfect advice to ensure you stay on the straight and narrow.
• First things first: 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. The IFA will ask you about your current situation, so it is important at this point 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.
• It’s important that you assess your financial position 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.
• Put aside the nerves and try to appear confident when talking about financial matters. Granted, it may be a new and unfamiliar world to you but remember that you are in a strong position and that you are the customer. The IFA is there to help and explain everything, so if you don’t understand something make sure you ask.
• Don’t over-commit yourself and always take some time to think about any decisions before you go ahead. It may be tempting to take on board every possible change to your financial situation, so that you are guaranteed to be secure in a few years, but you will still want to enjoy yourself now. Putting all your eggs in one basket may cause you to resent commitments and you will be unlikely to continue with them for a long period of time.
• Make sure you have talked through with your IFA any potential risks or pitfalls to each financial product, whether it be shares, pensions or ISAs. It’s crucial that you are fully aware of the consequences of inflation, taxation and interest rates on your money, so you can react to the economical situation at any one time.
• Review your situation with a professional at regular intervals and make alterations according to your changing priorities. It can be very easy to stay on the same financial course but as your life changes, so will the available products that you need to support you.
• If you are considering pooling your financial resources with somebody else and are not married, seek professional advice before you go any further. It may be that a legal contract can be drawn up to ensure that you are protected in case either party decides to withdraw from the agreement. Remember things change, so be prepared for all eventualities.