Saving for the future is something that we allknow is important. If you had to answer honestly,would you be able to say that your nestegg is getting the attention it deserves? The goodthing: physician-investors don't have to be financialwizards to begin building a nest egg. Whetheryou're just getting started, or you're looking togrow the savings you have already accumulated,the following are some simple steps you can take tostay on the right track:
1. Start by planning. When you think abouthow much money you're really going to needto meet all your future obligations—whether it'ssending your children to college, securing yourretirement income, or even putting a down paymenton a new home—the task of actually planningyour savings strategy may seem overwhelming.The best way to start is by setting long-termsavings goals first because those are the ones youwill need to work on a little bit at a time. Once youhave calculated how much you'll need to set asideeach month, you can also set intermediate-andshort-term goals. It's important to continue saving,even after you reach your short-term targets.
2. Prioritize your long-term needs. Whenlooking ahead to the major expenses thatawait you, it's important to decide which will best bepaid with savings, and which could be financed withdebt. Keep in mind that not all debt is necessarilybad. For example, if you can't afford to save forboth college and retirement expenses, you may bebetter off borrowing to pay for college than havingto borrow to pay postretirement living expenses.After all, nobody is going to offer you a scholarshipfor retirement. Careful planning can help you decidehow to best meet all your needs.
3. Pay yourself first. If it's not already a part ofyour regular routine, make saving a habit,just like paying your bills. To make it automatic,see if your employer offers some form of directdeposit, and then divert some of your paycheckdirectly into a savings or investment account—evenif it's just a small amount. Over time, you won'teven notice that part of your paycheck is missing,and you can always increase the portion that'ssiphoned off for savings.
4. Control and reduce your debt. Although wementioned earlier that some forms of debt aremanageable, there are others that can do seriousdamage to your savings plans. Every dollar youspend paying the interest on your credit card is adollar you could be putting to more productive use,such as accumulating in a savings or investmentaccount. Paying credit card interest charges gets youabsolutely nothing in return.
Outlining your financial goals and what youwould like to accomplish is certainly a great way tobegin, but it's easy to be thwarted if you try to go italone. Talking about your goals with your spouse,parents, or significant others may provide the supportyou need to actually make it happen. If you'remarried, it's especially important to communicatewith your spouse to set mutually agreeable goals anddecide on ways to achieve them. You may also considerenlisting the aid of a financial consultant, whocan provide expert assistance in tailoring a savingsplan to help accomplish your goals.
Joseph F. Lagowski is vice president, investments, and a financial
consultant with AG Edwards in Hillsborough, NJ. He welcomes
questions or comments at 800-288-0901, or visit www.agedwards.com. This article was provided by AG Edwards & Sons,
Inc, member SIPC.