Deciding how to practice should take into consideration your strengths and your economic situation. Getting started requires some honest answers. Here are some resources to help you get started.
by Mike Whitmer in Financial Plan & Budgets on Monday, January 15, 2018
The new year is here and with it comes resolutions and new expenses. Are you planning on saving more money? Taking a trip? Doing a home improvement?
Everyone knows the importance of having a budget for your practice, but having a personal budget is equally important. While we have talked about what should be considered in building a personal budget before, we thought it was important to revisit the how and why of a personal budget.
Consider this: you have a budget for the office so that you can plan future expenditures, see your spending habits and so much more, so why wouldn’t you have a personal budget?
A personal budget is particularly important as you open your practice. You’ll be accumulating a number of expenses professionally, and you may lose sight of your personal expenses.
The key to a successful budget is being realistic.
Make sure you look closely at your fixed expenses, average those that aren’t, and make sure your discretionary spending is realistic. This means if you are stopping to get a latte on the way to work or eating out every day, make sure you plan for it. And, don’t think you’ll start cold turkey and quit the spending pattern. You’ll just be setting yourself up for failure by breaking your budget.
Also, look to boost your savings.
Most of us are pretty good at saying we’ll start saving soon, but it becomes easier if you plan to set aside a sum of money each pay period. Even consider having a portion of your of paycheck automatically deposited in a savings account, so you don’t have to remember to make the transfer.
And, even if you have established a personal budget, it is important to revisit it periodically. Things change. For example, you may note a change in discretionary spending, or you may not have accounted for the annual increase in your utility bill.
Ultimately, by following a budget, you’ll have a better understanding of where your money is spent and will likely have more money available to do what you want.
If you need help getting started, check out Mint, SCORE or the Small Business Administration to find templates. Your accounting software might also have a budgeting function.
As a new D.C., you'll need to create a business plan and address how you'll fund your practice from the very first day. How you plan to promote your practice, who you need to hire and how your office will be managed are also important elements to consider. You'll also find a helpful information in our Starting into Practice Guide, which was developed specifically for chiropractors.