A career in dentistry can be financially rewarding, however it might not feel that way after you’ve completed your dental degree. Dental school can be particularly expensive resulting in large amounts of debt for graduating students. For domestic students, the total cost of dental school tuition in Canada ranges from total cost of dental school tuition and fees in Canada ranges from $60,000 to over $240,000, depending on the university.

If you’re currently in dental school or a recent grad, here are five ways to help you start your career on solid financial footing.

Set up a monthly budget

There’s an old saying, “you can’t manage what you can’t measure.” While there’s debate over who first said this, there’s rarely debate over its logic. This concept applies particularly well to money management. The best place to start when it comes to staying on track financially is by measuring what’s coming in and what’s going out. You can then use that information to create a monthly budget to help you reach your end goals.

Start by calculating your monthly income. Then list your monthly fixed expenses (like rent and transportation costs) and the variable expenses (like dining out and entertainment). Next, set a realistic monthly spending limit. Don’t forget to pay yourself regularly by setting aside an amount for savings.

Keep debt from getting out of control

Sherveen Kamran, Senior Manager, Healthcare & Professional Specialist at Scotiabank, says that along with high levels of student debt, dental students may graduate with access to large credit lines. She stresses the need to get the right advice on how to manage both. It might be tempting, for example, to consolidate your government student loan into your line of credit. If you do this, you may become ineligible for certain tax credits on the interest paid on the student loan. However, depending on the province where you received government student loans from, the provincial interest rate will vary and it may be prudent to consolidate. Consulting with your accountant or tax specialist is vital before making decisions.

Kamran also advises holding onto your line of credit even if it’s more than what your current needs require. “In 18 months or so, you may be looking to purchase your own practice. Having that line of credit in place can help you prepare for the next stage of your career.” It is important to surround yourself with a team of professionals early on i.e. Healthcare Specialist, accountant, lawyer, etc. Speak with a Healthcare Specialist as they can provide valuable advice and guidance to determine what is the best approach for you if you are looking towards practice ownership.  

Monitor your credit score

Your credit score may not have been top of mind when you were prepping for your first extraction, but it’s not something you want to ignore for long. Your credit rating can have a big impact on your ability to qualify for credit in the future when you may be looking to buy into a practice or obtain a mortgage to purchase a home. In Canada, there are two credit bureaus that provide reports – TransUnion and Equifax. They assign a score based on your credit history (how well you manage debt and if you pay your bills on time).

The reason you need to pay attention to your credit score is because financial institutions use it to determine how financially responsible you are. That, in turn, impacts your ability to access credit. Some financial institutions have tools to allow you to monitor your credit score. Scotiabank customers can check their credit score monthly online.

Protect yourself with disability insurance

Another important consideration when taking steps to protect your finances is disability insurance. It’s designed to replace a portion of your income if you become disabled due to an injury, a serious illness or a mental health concern and are unable to earn income. Having this coverage in place can help ensure you’ll be able to stay on track financially.

It’s worth noting that if you had disability insurance as a dental student through your provincial medical association, you may be able to convert that coverage into a new policy after graduation without the insurance company requiring you to take a medical exam. Getting advice from an insurance expert is crucial.

Develop a financial plan early

There’s no better way to prepare for a secure financial future than by connecting with an advisor to create a personal financial plan. Starting a savings or investment plan no matter how small and investing regularly can have long term financial benefits. Kamran says nothing is more important when it comes to financial and retirement planning than starting early. “Regardless of your age, an advisor or Healthcare Specialist can help you make the right financial decisions for your current and future life stages,” says Kamran.

Along with helping you build a personalized financial plan, an advisor can provide answers to your individual questions and support you in determining the best way to address them.

For more information and customized advice and solutions to help you plan your financial future, contact us today