10 Steps for Physicians Driven to Retire

You have heard it before: the story about the hard-working physician who "retired" only to be forced back into practice by unforeseen financial difficulty.

If you want to retire some day and stay retired, here are some steps you can take to make your retirement a pleasant trip.

1. Look both ways. Nothing is more important to you than your family, and you want to be there when they need you. But what happens when your adult child takes an unexpected trip through graduate school and the tuition comes due? And who will support your aging parents in the event that something happens and they need your financial support? If some “emergency” emerges, who will they call? That’s right…  you. Look toward the future for both generations and you'll be more likely to keep your retirement on track.

2. Drive your debt to zero. If you are "debt free except for your mortgage,” you're setting yourself up for a difficult retirement. Remember, your retirement income may vary from year to year but your mortgage remains the same, and this can cause trouble. Refinancing a mortgage (or getting a new one if you move) is tough when you're basically unemployed. If you have enough money to pay off your mortgage before you retire, then pay it off. And if you don't, then find some way to become completely debt free before you quit your day job.

3. Calculate your financial gas mileage. Do you know how much money you spend each month to maintain your standard of living? Probably not. A surprising number of new retirees have never used a budget, nor measured what they spend. This is not just important, it's crucial. Figure out how much goes out each month by keeping a spending journal or using software like Mint.com to find your number. Remember to include what you spend on credit cards. Then add to this number all of the personal expenses that run through your practice (medical, dental, insurance, travel, mobile phone, etc.). Most people are surprised by what they spend, and it's better to be surprised while you're still employed.

4. Don’t let a broken promise wreck your retirement. Do you intend to depend on income from sources other than your own savings? Will Social Security really be there for you throughout your whole retirement? What about Medicare? If you're in line for a pension, how strong is the company who will be cutting your check? From time to time, big organizations break their biggest promises. When you do your planning, include scenarios showing what happens if these promises are broken, then be certain they don’t break your retirement.

5. Remember, you’re driving into a headwind. If you know how much income you’ll have and how much you’ll spend, it's tempting to think you’re good to go. But proceed with caution. If inflation runs at only 3%, your cost of living will double during the first 25 years of retirement. And the deferred taxes on IRAs, 401ks and annuities may consume as much as one-third of what you withdraw. Be certain to include these factors in any plans you make.

6. Ladies… Stop, look and listen. Statistics tell us that women outlive men but they fail to make it clear that a woman often cares for her husband as he ages, often consuming her financial, physical, and mental resources. Ladies, who will care for you when he’s gone? Maybe your children will but it may be an assisted living or long term care facility. Look into long term care insurance for yourself and remember to include the cost of the premiums in your budget for retirement.

7. Are you ready to go? A host of research studies indicate that the highest sustainable withdrawal rate a retiree can take from a well-diversified portfolio of stocks and bonds is 4% per year. That means a $1 million account might allow you to take out $40,000 per year with a minimal chance of running out of money before you run out of retirement. Use simple math to run a quick reality check on your retirement plan. Multiply the value of your investments by 4% (then subtract about 1/5th for taxes if most of your money is in an IRA or 401k). Is it enough to cover your annual cost of living in retirement? If it is then...

8. Hire a professional to point the way. And by "professional", we mean a real, live Certified Financial Planner™ who works with people like you to design and execute a plan for a sustainable retirement. Be certain that this person is squarely in your corner—no conflicts of interest, no hidden agendas. Rule out any "advisor" (an unregulated catch-all label) who has less than ten years of experience and be careful when taking advice from anyone who has the potential to sell you a product. You are looking for an honest, objective answer to the question, "Am I prepared to retire today?"

9. Watch out for investment potholes! Do you remember the last time you lost money in the stock market? Since you're still employed, it probably felt like a speed bump. But if you had been retired and depending on your portfolio to support your lifestyle, it could have felt like a rear-end collision. If you have less than five years until your retirement, consider investing today as if you were retired right now, and begin thinking about how you would take money from your portfolio to pay your bills. It might help you get used to the bumps you’ll experience for decades to come.

10. Slow down before you stop. When you have made up your mind to actually retire, consider your options before you come to a full stop. The most successful retirement strategies for physicians usually involve some form of continued practice. Maybe you’ll drop a day from your clinical schedule each year, or do locum tenens for a few years. Think of your retirement as the road that connects what you do now with what you will do for the rest of your life.

You have worked hard for all these years to be able to retire. A little bit of planning now can make it a long and pleasant journey for you and your family.

 

Should Doctors Invest in Retirement Target Date Funds?

Note: This article originally appeared in Oncology Practice Management.

Physicians seem to have a natural affinity for complexity. That’s a good thing for patients with difficult diagnoses, but it’s a prescription for disaster when it comes to investing. Owning a myriad of securities spread across a dozen or more financial accounts usually means more taxes, more transaction costs, less clarity, and more time spent on investing.

How Much Time Should Doctors Spend on Investments?

It is this last bit, the time spent, that is the problem. Studies show that paying too much attention to the markets and your investments induces you to trade more often, and every time you trade, you run the risk of making a bad decision. Trading and “managing accounts” gives the illusion of control but usually delivers subpar results, studies show.

September 2016 marks the 40-year anniversary of the first index mutual fund, the Vanguard Index 500 Fund. It was Vanguard founder John Bogle who once said, “Don’t just do something, stand there.” This has proved to be some of the best advice ever given for physicians who owned the right investments in the first place.

What Is the Right Physician Investment for the Next 40 Years?

This question cannot be answered precisely but one thing is for certain: if an investment strategy is going to weather all the shocks of 4 decades worth of political change and economic upheaval, it has got to be diversified, very diversified.

Today it’s easier than ever for a physician to buy one or two mutual funds and hold those funds forever, knowing that you have made the right move.

What we are talking about is a mutual fund of mutual funds (aka a “fund of funds”). Although this may not ring a bell, the words “target-date retirement fund” are heard more loudly now than ever before as the likes of Vanguard, Fidelity, and T. Rowe Price have brought them to 401(k) accounts everywhere. In fact, these funds are so much a “best practice,” that they are often the qualified default investment option found in physicians’ workplace retirement plans. That means that if you are newly enrolled in a 401(k) plan, and you fail to make an explicit investment choice, you will likely end up with a target-date fund geared toward your age 65.

How Do Target Date Funds Work?

Target-date retirement funds own a mix of stock mutual funds and bond mutual funds, and that mix shifts gradually over time, becoming more conservative every year. For example, a physician in his or her mid-30s may own the Target Retirement 2045 Fund, which starts off owning mostly equities today, then shifts to a balance of stocks and bonds at age 65, and grows even more conservative as that doctor approaches age 80, when the fund holds mostly bonds.

When you look under the hood of these target-date funds, you can find a variety of exposure, including stocks of large, well-respected US blue-chip companies, tiny microcap stocks you have never heard of that will be tomorrow’s Google or Apple, international stocks, emerging market stocks, and even real estate investment trusts. All target-date funds will own bonds during their glide from aggressive to conservative, and these may include US treasuries, corporate bonds, emerging market bonds, TIPS, and even floating rate bonds. Some target-date funds will also own commodities.

One of the best-known target retirement funds, the Vanguard Target Retirement series, owns 4 of Vanguard’s “total” funds, including their Total Stock Market Index, Total International Stock Index, Total Bond Market Index, and Total International Bond Index funds. That last fund was added to the lineup only a few years ago. 

Doctors who invest in these funds own practically all the stocks and all the bonds available, which means they should either worry about everything or nothing at all, and worry has never been as profitable as optimism.

So what does this worry-free investing cost? With index-based target-date funds, the cost is very, very low. For example, a $100,000 investment usually costs approximately $150 annually, or 41 cents a day. Professional management, uber-diversification, and peace of mind can be had for less than the price of a cup of coffee. You don’t even need to pay an investment advisor to “manage” it for you, because it is already managed.

Target Date Funds Not a Great Investment for Every Physician

There are at least two situations that are not a great fit for a target-date fund approach to investing. The first case is money invested in a taxable account, such as a joint, individual, or trust account. In these accounts, the income from bonds held inside the mutual fund is taxed as ordinary income. For physicians in high tax brackets and high-tax states, such as California, New York, Wisconsin, and Minnesota, this may mean sacrificing 50% of the interest to the “tax man.”

The solution for these situations is to own two funds. The first fund can be a tax-exempt bond fund, maybe a fund that holds bonds issued by the state where you live, so that the interest paid is exempt from federal and state income tax. The second fund may be a global stock fund, such as the Vanguard Total World Stock Index or the DFA Global Equity Fund, both passively managed funds that tend to be naturally tax-efficient. Physicians can combine these funds in any ratio to match their appetite for risk.

The other case in which a target-date fund may not be a good fit is when a physician who wants a steady and unchanging exposure to risk, meaning that the mix of stocks and bonds does not change as you age. For this, there is another category of funds-of-funds known as “life stage” or “target risk” funds. With these funds, investors usually have a choice of aggressive, moderately aggressive, balanced, or conservative funds that own a static ratio of stocks and bonds, usually ranging from 80% stocks and 20% bonds and all the way down to 20% stocks and 80% bonds.

Look Before You Leap

Although all retirement target-date funds work essentially the same way, they are not all the same. The underlying funds can vary greatly. For example, actively managed funds from Fidelity may lean toward growth stocks, whereas T. Rowe Price’s target funds hold junk bonds in their fixed-income sleeve, something not seen in the Vanguard funds, which take a middle-of-the-road approach.

The way in which each fund family shifts the investment mix over time, known as the “glidepath,” varies substantially. Although all 3 company’s funds begin with a 90/10 mix of stocks and bonds, Vanguard and T. Rowe Price begin adding more bonds 25 years before the retirement target date, whereas Fidelity begins adding bonds 20 years before retirement. The retirement end point allocation varies too. Fidelity and Vanguard hold a 50/50 allocation at retirement, whereas T. Rowe Price is 60/40.

In most cases, you will not get a choice about glidepaths, because the suite of target-date funds is chosen by a plan administrator, and there is usually only one suite from one company.

Target Date Investing is Smart Choice for Most Physicians

Although physicians often come up with far more elaborate ways to invest, it would be difficult to come up with a strategy of investing that is as simple, practical, and cost-effective as investing in a fund-of-index-funds. And this way of investing can save you more than time. It can lead physician investors  to avoid the mistakes that lead to worse outcomes.

15 Ways New Physicians Can Get On Track Financially

Your first year in practice is busy. In fact, you may have overlooked a few financial moves that can save taxes, avoid problems and lead to success. While financial planning for doctors is not complicated, it does require time and energy that’s in short supply during the first year or two of practice. To start making progress, you can use the following steps as a checklist to get on track with your finances.

1. Choose your family’s financial leader.

Your finances will run more smoothly when you choose one family member to be responsible for your money. That doesn’t mean they make all the decisions alone. It means all financial communications and major decisions pass through their hands so that they can keep your family moving in the right direction. If you are not sure whether you or your spouse will be better at this, pick the person who is more organized, the person who checks the mail, or the one who is most plugged in to the online world.

2. Find a competent, caring financial advisor.

Your family CFO may need someone to act as their eyes and ears, to keep them informed, and give them guidance. When you select an advisor look for one who will listen to you, speak clearly, and make themselves available to help when needed. Be certain the advisor is a fiduciary who is compensated on a fee-only basis with at least ten years experience and the Certified Financial Planner™ mark.

3. Find a bank that will save you time.

Look for a bank that’s large enough to handle your needs, but small enough to offer responsive service. If a “relationship banker” is available to you, be certain to spend some time getting to know them and what they can do to make your financial life run more smoothly. If you are banking your medical practice, a community-based bank might be a good fit for you. If you have minimal banking needs, consider using a credit union instead. They tend to offer higher rates on deposits and lower rates on consumer loans and lines of credit. The best bank won’t make you money but it will save you time.

4. Find a responsive, knowledgeable tax preparer.

Medical specialists earn more than 95% of all other taxpayers. That’s the good news. The bad news is that you will give up about half your earnings to the taxman over the next 20-40 years of your practice but a solid tax person can help you pay no more than you absolutely must. To find the right tax preparer, get a name or two from your colleagues and ask your financial advisor for a third name. Interview all three candidates and choose the one who makes you feel most comfortable. Avoid tax advisors who sell insurance and investments. Schedule a November tax planning session for the current tax year.

5. Use a reasonable, approachable attorney.

The best way to use an attorney is early and often. To find the right one, ask your colleagues who they use, ask your tax preparer for a referral, and ask your financial advisor who they prefer, then select your attorney before you really need their help. The best choice is likely to be a business attorney who also handles trusts and estates. Ask them to prepare a simple will for you now, and plan to do more complex estate planning as your net worth grows.

6. Re-examine your disability insurance.

You may have purchased disability insurance as a resident, but you’re probably not “covered.” Why? Because your income has increased now that you’ve begun to practice. Disability coverage is one of the most complex forms of insurance and special provisions apply to physicians. Seek the help of a disability insurance specialist who has at least 10 years experience with disability insurance for doctors and ask them to explain the “definition of disability” for any policy you own or may be asked to purchase.

7. Form a general financial game plan.

Before you make any major financial decision, find out how much it will cost to achieve the goals that lead to financial security for your family. Ask your financial advisor to help you put together a plan to refinance your student loans, save for college, and build a fund for retirement. Try to answer the question, “How much do I need to save each month to make sure I’m on track?”

8. Purchase a reasonable home.

Note that we didn’t say, “Build the nicest home you can afford.” Many, many physicians jeopardize their ability to achieve financial security by buying an expensive home whose payments make it challenging (or impossible) to save for other goals like college and retirement. Think about what your family needs in a home, form a budget, and stick with it. Once you become accustomed to living in a larger home, there’s no going back to a smaller one.

9. Load up on life insurance… term life insurance, that is.

Ask your financial advisor to help you calculate how much money you may need in order to pay off your home, create a college savings fund, establish an income for your survivors, and cover the cost of their retirement. Remember to diversify your policies the same way you would diversify an investment portfolio. Plan to pare back your coverage over time as you make progress toward your goals. Avoid permanent or “cash value” life insurance, especially variable universal life (VUL).

10. Re-discover your employee benefits.

If you work for a hospital or clinic, ask your human resources person to provide a list of all the benefits available to you – retirement, insurance… even parking passes – and schedule a time to meet with them to review the list. Make sure you’re getting the benefits you earned. If you are self-employed, talk to your financial advisor about ways to save taxes while you save for retirement, including a solo 401(k), profit sharing plan and defined benefit plan or “cash balance” plan.

11. Get a PLUP.

No self-respecting physician would willingly go without malpractice insurance but many will drive cars, walk dogs and coach sports teams without the type of insurance that protects them from claims that arise from accidents in these activities: a Personal Lines Umbrella Policy (PLUP). Ask your property and casualty agent to integrate your PLUP’s coverage with your home and auto insurance.

12. Establish an emergency savings account.

If you and your spouse/partner both work, set aside at least three months worth of living expenses. If only one of you earns an income, set aside six months worth of living expenses. Put this money in a safe place like a bank certificate of deposit or money market fund. You may never need it, but if you do you’ll have it.

13. Get a handle on your student loans.

Refinancing a student loan means getting a new loan to pay off an old one. The key is to get better terms—a lower interest rate or a lower payment—on the new loan without sacrificing protections, pledging more collateral or adding a co-signer to the new loan. A sound refinancing decision requires physicians to know the costs and benefits of their current student loans and be able to compare them to the costs and benefits of options for new loans. Think twice before you refinance federal loans using a private loan.

14. Start saving for college.

Kids grow up in a hurry, and the cost of college education has historically grown at a rate more than twice the average rate of inflation (about 7% per year). After you’ve fully funded your retirement plan and your emergency savings account, this is probably the next best place to be saving and, for most physicians, a Section 529 college savings plan is the best vehicle. Check to see if your state’s 529 plan offers tax incentives.

15. Organize your financial life.

At home, make a place for everything: bank statements, investment records, estate planning documents, insurance policies, tax documents, etc. Develop a system for keeping track of passwords so that you and your spouse/partner both know how to access your online accounts. Consider the installation of a safe for valuables and extra boxes of checks. (Most embezzlement situations we see begin when the nanny or housekeeper steals a spare set of checks.) If you use a cloud-based service to store everything, make sure your spouse has access in case something bad happens to you.

Get Started!

As a new physician, it may be challenging to find the time and energy to pull all of this together. Set aside some time this weekend, tackle one of these items, then come back to this list every now and then until you manage to get your family’s financial planning all done.

What is a doctor loan?

A “doctor loan” or physician home loan is a mortgage that makes it faster and easier for residents, attending physicians and other medical professionals to buy a home with a low down payment while avoiding mortgage insurance.


What are the advantages of a doctor loan?


Doctor loans—which have been around for decades—were originally designed to lure soon-to-be affluent medical professionals into the banks. Physicians represent not only a profitable niche but also a good risk for the banks since doctors default on their loans at the lowest rate of any profession. All of these advantages hail from the bankers bending over backward to win your business, and the advantages are real.


1. Doctor loans avoid principal mortgage insurance (PMI)

Principal mortgage insurance (PMI) is an insurance policy that protects the bank if you, the mortgagee, “default” or fail to make the promised payments on your home loan. PMI is expensive, does you zero good and it’s not even tax deductible, so physicians should avoid it when they can.

You can dodge PMI if you put 20% down on a home but many young doctors simply don’t have that kind of cash. With a doctor mortgage loan and a decent credit score, physicians can borrow 95% to 100% of the home’s purchase price with no PMI. A low or zero down payment leaves more money for other goals like paying off student loans, investing for retirement or saving for college.


2. Doctor mortgage loans help physicians get into a home sooner

Since they use a physician-specific loan approval process, the lenders behind doctor loans may allow you  to close on your home up to two months before you actually begin your practice.

These lenders use your employment contract as proof of income instead of relying on two years worth of tax returns. Josh Mettle, who handles doctor loans nationwide at Fairway Independent Mortgage Corporation, notes that “this is huge for physicians relocating across the country, needing to get their family settled and house in order before they start a busy work schedule.”

Bear in mind, no two physician employment contracts are created equally.  When applying for a home loan, even a doctor mortgage, you should have your employment contract reviewed by the lender as early as humanly possible so you can plan accordingly. Mettle advises his clients to make sure that their employment contract is not only reviewed and approved by the loan officer, but also by the underwriter who will eventually have the ultimate power to approve the loan.


3. It’s easier for debt-ridden physicians to qualify for a doctor loan

Many doctor mortgages do not include deferred student loan payments when they calculate the debt-to-income (DTI) ratio that bankers use to make lending decisions. This can make the difference between qualifying for a loan or being shut out of your dream home. For physicians early in their attending careers or carrying heavy student loan burdens, this factor can make a doctor mortgage loan the only option since conventional and jumbo mortgage loans are not nearly as accommodating to those with medical school debt.
 

What are the disadvantages of a doctor loan?


While there’s nothing inherently “wrong” with these loan products, they make it easier for unwary doctors to get into financial trouble both now and for years to come. The disadvantages of doctor loans have everything to do with how they are used.


1. Physicians get in over their heads when doctor loans go wrong

The appeal of a “nothing down loan” or a low down payment conceals the downside risk of a leveraged real estate purchase.

Consider this example. A physician buys a one million dollar home with a one million dollar doctor loan with a zero down payment.  Then, when the real estate market hits a bump and home prices drop by an average of 10%, she will own a $900,000 house with a $1,000,000 loan, which results in  $100,000 of negative equity. This condition, known as “being upside down in your home,” was quite common during the post-2008 housing crisis.

Young doctors who sold homes like these were required to come to the closing table with a check for $100,000 just to be able to consummate the sale of their home. And remember, that’s $100,000 in after-tax money, which is about $200,000 in pre-tax earnings, or the equivalent of one year’s salary for the average physician. Ouch!


2. Doctor loans make housing decisions faster but not better

In his book, “Decisive: How to Make Better Choices in Life and Work,” behavioral economist Chip Heath points out that people (doctors included) are bad at imagining the future and worse at imagining how we will feel in that future. As a result, we tend to make decisions that we believe will make us happy but don’t.

This reality bears itself out in “the dream home” that many physicians envision for themselves while they are still in training. The perfect job and the perfect house in the perfect location might bring happiness but alas, perfection is far from perfect.

Sometimes young doctors take a job in a new city only to realize that the weather is not quite what they had imagined, the schools are not up to speed, or worse… they realize that their new partners are bilking Medicare. So they move, and they bear all the costs of a housing mistake.

The instant money that comes from doctor loans leaves no time for physician families to slow down, rent for a while, build up savings, pay off and refinance high interest rate loans, shop the market or really consider the things that are known to make people happy. One of these things is a sense of making real progress toward financial security.


Is a doctor loan a good idea?

Buying a home is a big decision with far reaching consequences. Physician mortgage loans are nothing more than a tool that may make things better or worse for you depending on how you use it. Take some time to consider not only the pros and cons of a doctor loan but the impact it may have on your life.

Josh Mettle, the author of “Why Physician Home Loans Fail: How to Avoid the Landmines for a Flawless Home Purchase”, is a mortgage lender with Fairway Independent Mortgage Corporation where he specializes in mortgage financing for physicians. Check out his podcast on Physician Financial Success. or visit his website about reverse mortgages.

7 Ways to Get Financially Organized Without Wasting a Bunch of Time

As a physician, it’s hard to make progress toward your goals if you’re lost in a sea of accounts and paperwork. Dealing with the scattered bits and pieces of your financial life make it impossilbe to see whether or not you're really on track.

But if you can get financially organized, you create a clear path in front of you that makes it easier to build financial security for your family.

Ready to get started? These seven strategies will allow you clean up your finances right now.

1. Go Paperless

Start the organization process by cutting off what supplies the clutter: an endless array of paper statements sent by every company you work with each month.

Turn off paper statements and get documents electronically. This limits the amount of paper you physically have sitting around on your desk. It’s also safer, since things won’t get lost or stolen in the mail.

Next, set up a cloud-based storage system to keep your information in a single, easy-to-access place. Google Drive is a great (and free) option, and you’ve already got it if you’ve got Gmail.

You can log into your cloud storage from any device -- laptop, smartphone, iPad -- and access all the same information anywhere.

2. Keep Your Information Safe and Secure

Managing everything online and electronically is a great method for staying financially organized -- but it’s not without its own risks and challenges. The biggest? Keeping all that information safe.

Use strong passwords, and assign a different password to every account. You don’t want to write these down in a place where someone else could see or take your notes, either.

So use a tool like LastPass to generate encrypted logins for every financial account you have. The service “remembers” all that data and manages it in one place for you. If you go this route, turn on 2-factor authentication for added security.

3. Throw Out What You No Longer Need

Even after you make the effort to go paperless, you’ll likely receive some physical documents by mail. Do you need to keep all that stuff?

It is important to hang on to certain documents, but you want to make sure you’re not just accumulating clutter. Go through your existing financial information and make sure you’re only keeping what you actually need:

  • Annual tax returns (always keep the returns; you can toss supporting documentation for individual returns after 3 years)

  • Year-end statements from investment accounts (keep for 3 years, then you can toss)

  • Documents that contain records that relate to your home, for as long as you live in or own that home

  • Forms that show contributions and withdrawals from IRAs and 401(k)s, and any 8606 forms (you’ll have these if you reported nondeductible contributions to traditional IRAs)

You can throw out things like receipts and deposit slips after you receive your monthly account statements (and ensure all the charges match up to your records). And you don’t need to keep pay stubs after you receive your W-2 for the year.

4. Create a Process for Paperwork and Documents

Keep the physical paperwork you do need to hang onto nicely organized. Our simple 3-step process for managing it all can help:

  1. Get a large box and label it. Write “Financial Records,” and the year.

  2. As you receive all your paperwork throughout the year, you can put your documents into the box. You don’t even have to organize it neatly; just put it in as you receive it.

  3. At the end of the year, choose a spot where you can store the box. Place it there and then get yourself a new box. Write “Financial Records,” the new year, and repeat the process. After a couple of years go by, you can move older boxes to the attic or basement.

This ensures you keep what you need, you know where it’s at, and you don’t need to continuously sort through it. If you need to fetch documents for your financial planner or tax preparer, you’ll know where to find your box.

5. Choose the Right Credit Cards

Keep your credit in check by using it deliberately. Get 2 credit cards and use one for online purchases. Use the other for in-person transactions, so you always have a useable card if one becomes compromised. Some card issuers will even issue two cards on the same account, making things even easier.

Choose credit cards that offer cash back, not points or miles, like these:

  • Quicksilver® Rewards from CapitalOne: Earn unlimited 1.5% cash-back on every purchase.

  • Discover it® Card: Get 5% cash back in rotating categories (like gas stations, restaurants, and Amazon) that change each quarter, and unlimited 1% cash back on all other purchases.

6. Audit Your Accounts

When’s the last time you tracked down every financial account with your name on it? Make a list of all your bank accounts, credit cards, investment accounts, retirement plans (from past and present employers), and so on.

Consider closing accounts that you don’t use anymore. You could also consolidate accounts, whether it’s putting two savings accounts together or rolling over an old retirement plan into your current account.

Do the same with your service and subscription accounts. Make a list and then ask: do I use these? Do I need them? Close the ones you don’t want or need. More organization means more savings.

7. Refinance and/or Consolidate Student Loans

Refinancing your student debt can save money. It can also provide you with a more manageable financial situation if you consolidate multiple loans into one.

When you refinance, you get a new loan to pay of an old one (or a single new loan to pay off multiple existing debts).

Refinancing and consolidating may make sense if you can originate that new loan with better terms -- and without giving up benefits that came with the old debt, having to put up collateral, or getting co-signer on the new loan.

Use our guide to refinancing medical school debt to help you decide if this should be part of your financial organization process.

Building a solid financial foundation starts when you get financially organized and put your information in consolidated, easy-to-reach places.

Need help getting started? Get subscription-based financial advice to help you organize your financial life and then start taking action toward your goals.