January 4, 2024

Where is Your Money Going?

By Taylor Richardson, CRPS®, AIF, Financial Advisor

The beginning of a new year is a time for fresh starts – something I always look forward to. It’s a time to reflect and make resolutions. To get 2024 off to a good start, I encourage you to review your financial situation and think about how you can make meaningful progress in the coming year on your journey to build wealth and secure your family’s financial future.

Do Your Expenditures Match What Matters to You?

In a recent blog, I talked about a number of principles behind our holistic and values-based approach to financial planning. One idea I shared is the importance of knowing where your money is going. It sounds simple enough. After all, we’re spending the money, so it’s only fair we know what it’s being spent on, but in reality, many of us don’t know. Money seems to flow in and flow out just as quickly. The end of the year is when our lack of intentionality becomes apparent as we tally up our income and expenditures, and often end up asking ourselves, “Where did all my money go?”

Dental School Didn’t Teach This Stuff

If this sounds familiar, don’t feel bad. To make it through dental school, you have to be smart, but your training did nothing to prepare you for how to manage your money. More than most professions, a dental career involves a variety of complicated financial decisions, such as efficiently managing sizeable student loan debt and financing the purchase of a practice. Dental graduates often start out earning a six-figure income, and when you make a good living, it’s easy to put off serious financial planning because you don’t feel squeezed for money. But that delay can hurt you in the long run.

Short Term vs. Long Term Planning

For example, if you’re working with a CPA to manage your taxes, you need to remember the CPA’s job is to minimize your taxes for the current year. Sounds great – but the decisions they make could hurt you down the road. If you’re always focused on avoiding taxes by reducing your income so you never run a high W-2, you won’t get all the social security credits you would otherwise receive, which can substantially impact your retirement income. If your retirement accounts are only viewed as a tool to reduce taxes, you’ll be encouraged to always take tax deductions at the front end, which will result in tax problems when you retire.

Budgets Give You Control

At the heart of a successful financial plan is a budget. I know some people shudder at the idea, but creating and sticking to a budget allows you to make choices that align with your long-term vision so you can be intentional about spending in ways that increase your happiness. Budgets give you control, and one that’s been carefully considered and constructed allows you to build wealth while simultaneously prioritizing things that have meaning for you.

New Tool Provides At-A-Glance View

We recently made great strides in simplifying this process for dentists by introducing a new tool that helps you see exactly where your money is going. The Elements program gives you control and makes sure your expenditures align with your goals. You can see at a glance how much and where you’re spending, as well as how much you’re saving. It’s comprehensive and user friendly, which means no more second guessing.

This tool is available to all our clients. To learn more, join me as I walk you through the Elements program so you can see how it works and how easy it makes it to track your finances.

If you have any questions about how to establish a financially healthy practice and build long-term wealth, schedule a call with our team at Engage Wealth Advisors. We can help you develop a plan that’s strategic, intentional and aligns your approach to money with your values.