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Managing your money: Seven steps to getting finances back on track

For many of us, January is the clean slate needed to turn our best intentions, such as transforming our financial situation, into resolutions. But why wait? Now is an ideal time to give your finances a check-up before the year’s end. For busy doctors, finding the time to think about themselves rather than their patients can be difficult, but now is the moment to give yourself a financial planning health check.

What should such a check-up cover? At Chase de Vere Medical, we offer a no-obligation consultation with a specialist independent financial adviser who has extensive experience of working with medical professionals. They can help you put together an action plan for your finances that is tailored to your personal needs and circumstances. In the meantime, these seven tips will help you start thinking about whether your personal finances are headed in the right direction.

1. Understanding your payslip

Many doctors don’t fully understand the information on their payslips or know how to read a payslip. NHS payslips are filled with information covering not just how much you’re being paid – and what this consists of – but also how many hours you are contracted to work, details of your pay grade and entitlement, deductions for tax, national insurance and pension contributions, and lots more. Much of this information is shrouded in jargon, but it’s crucial to check your payslips regularly in order to identify any anomalies; otherwise you may not be receiving the right amount of pay.

What are the details found on a payslip?
  • Gross pay – This is the total amount of pay you’ll receive before any tax or NI has been removed.
  • Net pay – This is the amount you’ll take home after necessary deductions.
  • Variable deductions – These are pay deductions that can change from payday to payday.
  • Fixed deductions – These are deductions from your pay that don’t change.
  • You may also find
    • Your tax code
    • National insurance number
    • Pay rate
    • Additional payments (i.e overtime)

2. Plan your budget

You may have a clear view of how much money you have coming in each month, but what about monies heading out? Making a budget plan that sets out your monthly commitments in black and white – both fixed and variable – will help you understand whether you’re on top of your outgoings and where there is scope to make savings. It may be possible to make your salary go much further each month.

Wondering how to plan a budget? The Money Advice Service has created a great budget planner that’ll help you manage your money better.

3. Write off debts

If you have outstanding debts, you’ll have identified payments towards these during your budget planning. The key to reducing borrowing is to approach debt methodically – tackling the most expensive debt first, for example. Set out a plan for getting your debt down over time in order to free up money for the future.

If you need help clearing your debt, there are a number of free debt advice helplines, including:

4. Prepare for the unexpected

Do you know how much you would be paid if you were to fall ill? It’s important to understand what the NHS offers doctors in the event that they are unable to work due to ill-health. You need to make provisions so that you are protected if you are still unwell when your entitlement to sick pay comes to an end. Similarly, think about your dependants. The NHS offers various benefits and insurances that protect loved ones if you are no longer able to provide for them. Do you know what cover you have – and is it sufficient?

You can read more on the NHS, their pensions, and what would happen if you were to fall critical ill here.

5. Saving money for the future

Are you putting money by for a rainy day, to buy your first home or put children through education? It’s important to make sure your money is working as hard as possible on your behalf – and that it’s invested in assets that reflect your attitude to risk, your time horizons and your financial objectives. And if you haven’t yet put a savings plan in place, now is the time to return to your monthly budget – where could you free up cash to start getting on the right track.

Are you wondering how to save money?

Here are a few of our top money-saving tips:
  • Revive the piggy bank – Whenever you get home with a pocketful of loose change, add them to your piggy bank and you’ll have plenty saved within the year.
  • Go cash-only – If you find it difficult to save money and rely on contactless to get by, consider drawing cash at the beginning of each week instead. This will allow you to keep on top of your total spend much easier.
  • Shop cheaper – If you find yourself shopping at more expensive supermarkets just for the convenience, consider going further afield to a cheaper supermarket to do your food shop. You can make some serious savings.

6. Understand your pension

The NHS Pension Scheme offers attractive benefits, but it’s important to understand exactly what pension rights you’re building up. Not least, the NHS scheme actually consists of three different sections, each offering different rights and benefits. Make sure you understand which part of the scheme you belong to and what that means for your retirement savings. Then think about whether your pension saving is sufficient for your needs – and the most tax-efficient ways to boost your savings if you need to do so.

Want to switch your NHS pensions scheme? We’ve put together a guide to switching your NHS pension scheme here.

7. Get the basics right

Good financial planning is all about getting the basics right from day one. That means working through the different aspects of your personal finances in order to understand your current position, to identify priority areas for improvement and to find the best solutions in each case.

Our advisers can help you through this process and get you on the right track for a healthy financial future.

Content correct at time of writing and is intended for general information only and should not be construed as advice.

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