Taking A Financial Inventory:The last few years have challenged healthcare professionals to rethink their priorities and focus on long-term financial planning. Having lost financial ground as far as retirement assets are concerned, healthcare professionals around the country are reevaluating the risk of their portfolios and seeking stability in investments. Let's take a moment to consider your financial goals for the upcoming year and take an inventory of what you currently have and which direction you need to go. Your Life Goals: The faltering market and weak economy may grab your immediate attention. But ultimately, it is, or should be, your life goals that drive your overall personal money management decisions. Are you saving the maximum for your retirement while limiting your current expenses? Do you know how much you need to save now to be able to enjoy your retirement in the way you want? Is your current career path meeting your financial needs? What are the financial consequences of a job or career change? Sometimes, the cost of a job change is worth its weight in gold if you are able to have more leisure time and reduce your stress. How will a career shift impact your overall financial picture now and in the future? An important part of quality living is examining what's really important to you and then living your life in congruence with your priorities. Knowing how you want to live now and in the future will help you design financial goals based on the quality of life you want to have. This may be a good time to seek professional financial planning advice to assist you in designing your financial goals.Your Objectives :Accomplishing goals requires achievement of established objectives, or milestones, along the way - such as saving a certain amount of money by a certain date. With the downturn in the economy, there may be a new sense of urgency about reviewing your financial objectives. Are you saving enough money to be prepared for unexpected events? Are you investing in a way that supports your life goals? Do you have enough assets with high liquidity so you can access it readily if needed? Is there anything that you want to do in your lifetime that will require a chunk of money and have you started planning the financing for it?
Your Current Portfolio: Ideally, a portfolio should be reassessed, and perhaps readjusted, in response to your changing life goals as a healthcare professional, not in reaction to current events that may temporarily affect the market or the economy. Most financial analysts believe that the stock market will bounce back in time and they are strongly advising their clients not to sell because of panic in a down market. However, should you decide to alter your goals, it may be appropriate to alter your investing plan in order to achieve them. Is your portfolio too heavily weighted in one investment area, or is it well balanced so it can weather the inevitable ups and downs of the market? Do you have the right mix of growth and value stocks or funds? Most importantly, are you finding that you are uncomfortable with the level of risk in your investments now that you have experienced "risk"?
Assess Areas For Debt Consolidation: Consider your credit card debt. If you can consolidate or pay off your credit cards, it will increase your monthly cash flow. You will also need to look at how you use your credit cards to avoid continued debt. Consider your mortgage rate. Is your mortgage interest rate high enough to warrant a new mortgage? Usually a drop of more than 1% signals it's time to review it. If you have equity in your home, you might consider using it to consolidate debt and free up ready cash.
Prepare For Financial Emergencies :Disasters, whether man-made or natural, often strike without warning. Many healthcare professionals have a thin or nonexistent financial cushion to fall back on. As a general rule, you should have at least three months of cash available for bare bones living. Life insurance is extremely important for family members left behind after a tragic accident or event. This sudden loss of a wage earner in a family can create emotional and financial hardship. Make sure you have enough coverage to insure your family for their future needs without you. Consider the costs of your children's education, your home and life expenses, to determine how much coverage is needed. Disability insurance, which can be expensive, is often available through group plans with your current healthcare employer. Often these plans are not portable (you only have the coverage while you work for the company). Additional plans are available and can be matched to an existing plan for a cost based on your work classification. Disability insurance provides an income to you and your family should you become unable to work. Healthcare insurance is one of the largest expenses impacting families today. The most important aspect of healthcare insurance is that your policy covers your family for the major medical expenses including inpatient or outpatient hospitalization, physician services and some type of prescription plan.
