When I look back on young and fresh-faced new-grad Alice, she’s excited to start doing what she’s been training for 5 years to do – and finally be paid for it.
Did I know how to perform a thorough clinical exam on virtually any domestic animal? Yes!
Did I know how pensions worked? No.
How to negotiate salaries? No.
How to save and what to do with savings? No.
How to invest? No.
That income protection insurance exists? No.
Who was this person?
I’m so happy I’ve grown into the person I am today who makes it my mission to be as informed as I can be about my personal finances, sets clear financial goals and talks to people who have similar missions! The part of myself that I feel empathy for, is the part who felt embarrassed about not knowing anything about money.
And I can fairly confidently say that there would have been a lot of people graduating with me who felt similarly!
If you’re nearing towards the end of vet school, and the world of adulting seems to be looming ever closer, I’m going to talk you through my top tips about money that would have made new-grad Alice SO much more confident at managing her personal finances.
Top Money Tips for Veterinary New-Grads
#1 Pensions are auto-enrolled and you can increase your contribution
Sit back, relax, and wait for an information email or leaflet to drop through your letterbox (digital or otherwise). For 10 years now, all UK employees get auto-enrolled into a pension when they start work. You can can opt-out, but I would strongly advise you don’t. You will likely start contributing the automatic 5% and your employer usually matches a minimum of 3%.
This means 5% of you salary (before any tax gets taken off) is thrown into your pension pot automatically before you see it drop into your bank account. The company you work for then top it up by another 3%, and the best part is that you don’t miss the money because you never had it.
The hack? You can increase your contribution if you want to! Nothing is fixed so if you think you can spare just even another 2% of pre-tax salary, you can request your HR to change it for you and job’s a good’un. It might not seem very much now but over your whole career, an extra few % can make a very big difference after compound interest!
It’s a great way to save a bit more money for future you, without really doing anything, and not feeling like you have to cut back at all. Once you’ve authorised the pension contribution increase, everything is automatic and you never need to think about it again.
Me? I increased my contribution from the minimum 5% to 9%, so with my employer putting towards 3%, I get an overall 12% pension contribution.
#2 Save an Emergency Fund ASAP
An emergency fund is 3-5 months’ worth of all your necessary expenses saved up in case of emergencies. This pot of money should be in an accessible savings account but separate to the rest of your money. It is the first thing you should save up for.
You need this fund for emergency car repairs, in case of losing your job, or any other unexpected expense. Money emergencies DO happen and with an emergency fund, you don’t need to be worried about what’s around the corner.
#3 Investing is easier than you think
Investing is made out to be a lot more complicated than it really is. Forget the images of graphs, numbers, symbols, huge amounts of money on screens. All you need is a laptop, about £50 and less than 30 minutes. And yes, you can invest with an investment firm or bank, but you can also do the basics (and the basics is often just as good), by yourself.
I wrote a how-to guide a little while ago that your can find here. The main thing about investing, is to start as soon as you can! Once you’ve saved up an emergency fund, anything extra you save that you know you don’t need in the next 5 years can be invested in a stocks and shares ISA.
What did I do? I started out with Index funds. They’re the epitome of not putting your eggs all in one basket. You’re essentially buying a tiny segment of each and every business in the market you choose. So if the overall market goes up (which historically it has since records began), so does your fund! No decisions, reading about financial news, or timing necessary!
#4 Income protection insurance exists
I learnt this 3 years after graduating, having worked with large animals for the whole duration. I was lucky enough to never be injured during that period but if I had been (either at home or work), I would have only had 10 days of fully paid sick leave before I was on statutory sick pay (£99.35 per week). And I don’t know about you, but that barely covers my rent, let alone bills or food.
Income protection is absolutely crucial. If you can’t work for long periods due to sickness or injury, this insurance will pay out a large proportion of your current salary monthly for as long as you need, so that you can still pay your bills, rent, mortgage and food.
Not sure where to start or how to find it? Talk to VetYou! Ruth Downs is their resident, super friendly financial advisor and she knows exactly the sort of risks us vets are taking every day and can recommend trusted providers to help us keep financially secure.
#5 Automate savings when you get paid
This was another big revelation for me. I used to not spend as much as I could during each month and then set aside anything leftover as my savings.
What’s wrong with that? If you have money in your spending account, you’re much more likely to spend it. If you’ve already taken the money out of your account and set it aside as savings, you can’t see it and you can’t spend it – no matter how much you want that takeaway a the end of the month.
The big trick is to set up a direct debit from your spending to your savings account every month for the day you get paid. This way you can’t forget or procrastinate manually doing it every month. Once you’ve set up your direct debit, sit back and relax.
The Bottom Line
There’s no right or wrong way to do money but these are the things that Ive learnt to do that will set me up for much better financial security in the long-term. Do I wish I’d started investing earlier? Yep! Do I cringe at knowing how lucky I was to not get injured without having income protection? Yep!
If you don’t get taught about money, then it’s not fair to beat yourself up. I just hope that just a few new-grads will be better prepared with their money than I was after reading this!
Disclaimer: this is only financial information, not advice. Please seek individual advice from an Independent Financial Advisor
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