Saving: Invest in Your Dreams

There may never be a convenient time to save and invest your money. Whether you’re saving for a home or putting away money to purchase a practice, it requires discipline.

Pay Yourself First
Establish the habit of “paying yourself first” and transfer a small portion of each paycheck into savings, even if it’s only $25. Developing and maintaining this habit early will pay large dividends down the road.

Helpful hint: Ideally, you should be working towards saving 10-20% of your gross income and only after high interest debt is paid down.

Steps to begin saving

  1. Determine where all your money goes.
  2. Determine where you can reduce your expenses.
  3. Establish a spending strategy by reviewing your financial goals and determine what percentage of your income you need to invest in order to meet your goals.

Helpful hint: Regular contributions to your savings are a necessity rather than a luxury.

Emergency cash reserves

If you cannot work due to illness, lose your job, or want to take an extended vacation, having adequate cash on hand allows you to be financially secure with any decision you need to make. Three to six months of your expenses is recommended to keep on hand in case of emergency.

Emergency funds should be held in an account that is:

  • Liquid and secure, meaning you can access it without penalty or investment volatility;
  • Free of any annual account fee or maintenance charge; and
  • At least earning a small amount of interest, depending on type of account and current economic conditions.

Options for cash on hand include a checking or savings account, a money market account or Certificates of Deposit (CD).

Helpful hint: It is recommended that whichever savings route you choose, set it up as an automatic deduction from your paycheck to make sure your savings goal is accomplished every month.

Emergency reserves are not money to dip into unless it’s a true emergency.

The Advantages of Saving Early – Are you Dr. Saver or Dr. Spender?

The most important aspect of building your savings is the power of time. Once you lose that time, you can’t get it back and it will irreversibly impact your long-term savings.


Dr. Saver begins saving at age 25

Dr. Spender begins saving at age 35

Monthly Savings

$100/mo for 10 years

$100/mo for 20 years

Total amount saved



Interest rate




Investment value after 30 years





*This chart assumes a static interest rate of 6% and does not take into account dividends or taxes. This is a hypothetical example for illustrative purposes only and not indicative of any particular investment.

Helpful hint: One of the easiest ways to save is through your employer’s retirement plan which may come with a matching contribution. If your employer does not have a plan, contact a financial adviser about an individual retirement account.




© 2012 WSVMA

 Financial Planning for Veterinary Students


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