We are discussing 10 ways for a dentist to manage their money and maintain effective dental practice management.
2. Be Wise & Calculative in Your Personal Spendings
Yes, it is true that after years of studying to qualify as a professional dentist, you are finally a professionally earning dentist. When you get that first monthly income from your practice you will feel like enjoying your first financial independence. Once or twice it might be ok.
But then you will need to get wise & calculative as mentioned in the title of this point.
You have to realize fast that your personal spending as a dentist depends on the stage of the dental career you are in.
Learn about 5 stages in the professional life cycle of a dentist. We are taught dentistry but no one teaches us the business cycle of Dental Practice. This lack of knowledge regarding the business aspect is hurting the dentists in the long run.
As a general rule you can follow these points:
- It’s better not to go overboard in your personal spendings.
- For example, if you already have a house then it makes no sense in taking a huge loan for another house. As the monthly installment will be an additional financial burden on you.
- Before you start spending on personal enjoyments, first make sure to clear your installment dues and insurance premiums.
- It is one of the most important daily habits for a dentist to be successful as stated by some of the most successful dentists and businessmen.
3. Make Peace with your Money Spending Capacity
You must have come across many stories where a famous player or an actor (who was apparently rich some time back) filing for bankruptcy. Mind it, they earn millions in their line of the profession but still, they somehow managed to go bankrupt.
You might ask HOW?
But you already know the answer.
They went bankrupt because they kept no check on their spendings.
The size of their bank balance made then arrogant towards money and they ended up spending all they had before it was time to realize.
“To successfully manage the money, you first need to respect money.”
You as a dentist can learn a lot from this. You might be a beginner or an experienced practitioner. Depending on the stage of your dental career you will have the related financial power. There will always be certain things that you do want to purchase, which are beyond your current financial power.
Say for example you have that deep desire to own an AUDI car, but your current financial status is not exactly suitable to make the purchase. But still, you go for the purchase stretching your financial power to the maximum. The euphoria of the new Audi car will last for a few days, but then the reality of the monthly installment comes up. It’s an additional burden on your already stretched finance.
To cover up this additional monthly installment you will now need to save money from some other essential personal expenditures.
The point to understand here is – ” Make peace with your money spending capacity. Do not get into the habit of making purchases which do not fall in your comfort zone. Such expenditures will only increase your financial burdens.