Recently graduated from dental school? Congratulations, that’s a huge accomplishment – it’s a tremendous milestone to don the white coat and make the transition from student to practitioner. But, if you’re like most recent grads, you may also be feeling weighed down by debt. With the cost of dental school ranging from $60,000 to over $200,000, depending on the school, you’ve just obtained the most expensive university degree in Canada.1

While you may have accumulated a fair bit of debt over the course of your studies, you’re about to launch a very rewarding career. With the right planning, you can not only ensure your debt remains under control but that you are well set up for future financial success. 

Here are five smart ways to manage your debt:

  1. Pay yourself first
    After years of frugal living as a dental student, it can be tempting to overspend when you graduate and first start earning income. “The key is to continue living modestly until you get your debt under control,” says Rod McFadden, Healthcare & Professional Advisor with Scotiabank. “You have only a limited amount of control over your fixed expenses, such as rent and food, but you can control how much you spend on variable ones, such as vacation travel and dining out. By reducing how much you spend on variable expenses, you can ensure you have more funds available to pay down your debt.”

    Scotiabank Healthcare & Professional Advisor Shanta Gulchand agrees, saying, “with today’s rising interest rates, it’s more important than ever to pay down debt.” After paying obligatory payments, her advice for how to avoid over-spending is to “pay yourself first” each month – as soon as you get paid. A handy way to do that is by setting up an automatic pre-authorized transfer from your chequing account to a savings account. That way you won’t be tempted to spend the money on other things and will always have it available each month to help pay off your outstanding debt. 

  2. Maintain a budget
    The most common recommendation when it comes to managing debt is to create a budget. “The challenge is making sure you stick to one,” says Gulchand. Her advice is to track your income and spending using online tools. “With digital banking, you can access and monitor your accounts from anywhere,” notes Gulchand, “and there are a variety of tools that can help.”

    For example, you can check if you have additional funds available to help pay down your debt by comparing your income to your expenses with the Scotiabank Money Finder Calculator. To track and manage your cashflow and budget, Gulchand suggests using the Scotiabank mobile app, Scotia Smart Money by Advice+.

  3. Protect your credit score
    One of the things you likely never considered when you were still in school, and not yet making payments on your student loans, was your credit score. But once you graduate and have to start paying off your loans (in the case of government student loans, after a six-month grace period), you need to be sure you can make your payments. That means at least making the required minimum payments in full and on time.

    Missing payments and/or not paying your bills on time can have a negative impact on your credit score. This is important as lenders use your credit score to help determine how financially responsible you are and whether to approve you for a future loan.

    Maintaining a good credit score puts you in a better position to be approved for credit when you wish to borrow funds. A poor credit score may also have an impact on the interest rate you are charged or even how much you must pay for insurance. 

    Scotiabank provides an easy way for mobile banking customers to track their monthly credit score for free with the TransUnion Credit Score tool.  

  4. Plan for the future
    Another important reason to focus on paying down debt is the positive impact it can have on your future plans. “By getting rid of debt, you will be in a better position to meet goals, such as buying a home or investing in your own practice,” says McFadden.

    While McFadden recommends paying off what you owe as soon as possible, if you obtained a student line of credit, he suggests checking to see if you can hold onto it. For example, the Scotia Professional Student Plan Line of Credit – available to full-time students in professional study programs such as dentistry – may be converted into a revolving line of credit post schooling. McFadden says, “Doing this will ensure you continue to have ready access to funds at the preferred rate available to dentists.” Speak to your Scotiabank Healthcare & Professional Advisor to obtain advice and see what options are available to you

  5. Get customized advice
    Whatever your financial situation, it’s wise to seek professional advice to ensure you’re considering all the options available to you. Gulchand says there’s a huge advantage in consulting with an advisor who has expertise in your profession. “We can not only help support new dental grads’ current needs but also help them plan for the future,” says Gulchand. “For example, I can help grads calculate exactly how much interest they’re paying on their loans each month and how much that will work out to annually. Then, we can work together to ensure we create a plan that works for their specific situation and can help them achieve their future goals.” 

Whether it be purchasing a practice, going into partnership with another dentist or even opening a second practice one day, meeting with an advisor today who understands the unique needs of dentists can help ensure you get all the financial support you require. Scotiabank National Lead, Partnerships & Programs, Healthcare & Professional Banking Natalie Araujo agrees, saying, “there are many hidden benefits in obtaining sound financial advice and support from a Healthcare & Professional Advisor. Along with financial planning support, Scotiabank can provide information on tools, financial offers and benefits available specifically for dentists. We understand how to help dentists hit the ground running.”

For customized advice and solutions to help you manage debt and build a successful financial future, contact us today.