Anyone who is new to the workforce is bound to make financial mistakes, and often those mistakes are some of the greatest teaching lessons as you make your way as a DC
However, some of those financial mistakes can be costly and headache inducing. Here are some common financial mistakes to avoid as a new chiropractor:
Assuming associate is the only way to go
There are many paths a new chiropractor can take. And becoming an associate isn’t your only option. While some may choose this path, launching your own practice, while not easy, can help you reach your top potential faster.
A common myth is that you won’t be able to get start-up financing because of your student debt. But that is rarely the case. If you have good credit, a solid co-signer and a strategic business plan, it is possible to access lending for a practice.
Do your homework on which option is the best for your needs and know that you have multiple paths once your graduate.
Thinking you don’t need a lawyer
As any experienced business owner will tell you, your lawyer should always be your first call. You need to have someone with legal expertise reviewing any legal documents you sign.
Without it, you could be in a world of trouble later on. And If you are ever unsure about something, always run it by your lawyer. A good lawyer will be on the lookout for anything that may harm you or your practice later on.
Not learning basic business skills
Chiropractic school is great at teaching you how to be a great chiropractor. What it lacks is teaching you how to be a great business owner.
Take the time to educate yourself on running a business before you start one. There are thousands of books, classes, seminars and resources out there to help you get started. And as you begin, make sure you know how to do every part of the business. Having front office staff is great, but you should also be able to know how to hire, fire, run payroll, read financial statements, etc.
A great business owner (and manager) knows how to do every aspect of the job they are asking someone else to do. And it ensures you don’t let big things slip through the cracks because you didn’t know about them in the first place.
Not hiring an accountant or financial advisor
If you are not highly comfortable with doing your own taxes or managing finances, hire someone who is. There is a big difference between knowing how to manage your personal bank account and managing the finances of a business.
Not to mention, doing your taxes incorrectly is a costly financial mistake many DCs have made. Avoid the trouble and invest in good financial resources now.
Overextending your line of credit
This is a classic financial mistake by so many students. Once you graduate, the temptation to buy all the things you couldn’t afford in school hits a fever pitch. But if you still have student loans, you still can’t afford luxuries even if you have more liquid capital right now.
Stay conservative on your credit line and how much more debt you accumulate setting up your practice. Consider your purchases carefully. If you have sizeable student loans, it’s better to not spring for overly expensive items, personally or professionally if you can help it. Instead, be more frugal now and save for all the things you really want, while still paying off your student debt.
Poor debit management
Chiropractic students often graduate with $200,000 or more in debt. If you don’t learn how to get that debt under control, it will follow you for the rest of your life.
Organizing debt by smallest to largest and figuring out how much of each payment is interest and how much is principle. If possible, always pay at least enough to cover the interest. Otherwise, your $200,000 debt can easily turn into $400,000.
Not saving for retirement
If everything goes according to plan, you will most likely be in practice for 30-40 years. But some quick math will show you that you will have at least 20 years or more of life after that. How do you plan on paying your bills once you retire?
Start saving for retirement now even though it feels so far off. It is easier to save a little bit of money each month now than it is to realize at 50 that you need upwards of six figures to keep yourself afloat. Even $50-$75 a month in a retirement account can mean big gains in the long run. You can ramp-up the amount once you’ve gotten your student debt under control.
There are many things to learn as a new DC so don’t let rookie financial mistakes ruin your chances of a successful practice.