Millennial dentists are more in debt compared to almost every other profession. To deal with this burden, millennials have to make a financial plan and commit to paying off debt aggressively.
(CLEARWATER, FL) January 04, 2017 – The latest numbers from the Federal Reserve paint a grim picture of the burden of student loan debt. It’s estimated that Americans owe approximately $1.3 trillion in student loans (1). A large part of this total is made up of loans taken out by dental students. New dentists can expect to graduate school with as much as $400,000 in student loan debt (1).
Millennial dentists are putting off major life milestones because they are burdened by such huge debts. With the cost of a dental education rising by nearly 40% since 2010 (2), many new dentists cannot afford to get married, buy homes, or save for retirement.
The problems don’t stop when a dentist graduates from school. Dentistry is unique in that there are significant financial barriers to practice ownership. On top of student loans, new dentists pay an average of $500,000 if they want to buy their own practice after graduation (3). Purchasing high quality dental equipment and appropriate facilities in which to practice add to the financial pressures a dentist can experience early in their career. (4)
“Since millennial dentists start their careers already burdened by
huge amounts of debt, they have to make a plan to pay it off as soon as possible,” notes Adrian LaTrace, CEO of Boyd Industries. ”Part of running a successful practice is the initial investment in high quality, durable dental equipment that will last for years. Paying off student loans early allows millennial dentists to invest in higher caliber equipment. Ultimately, this means greater financial returns throughout their careers, not having to invest in replacement equipment very often.”
Regardless of the loan balance, the first step in dealing with such massive amounts of debt is to create a financial plan that establishes goals and helps keep expenses low. Examining monthly cash flow can help to clarify the amount dentists should set aside each month to pay off what they owe.
Dentists have to consider where they are spending their hard-earned income and take steps to cut out unnecessary purchases whenever possible. For millennials, this might mean holding off on purchasing a practice or a home.
LaTrace adds, “We can expect to continue to see many dental practices up for sale over the coming years as Baby Boomers retire. Right now, millennials don’t have to rush into big purchases just because it’s what everyone else thinks they should do – they are free to take their time, aggressively pay down debt, purchase the best equipment, and find a practice that suits their needs and style at the right time.”
Beyond a financial plan, millennial dentists should also consider consolidating and refinancing their student loans. It’s usually possible for dentists with good credit to refinance loans and get a lower interest rate, which can help save thousands of dollars over the course of the repayment.
While paying off as much debt as possible as quickly as possible should be the priority, it’s also important to remember retirement. Setting aside a percentage of income each month for retirement can help millennials get a better understanding of their cash flow and allocate more money toward debt repayment (2). The more debt is paid off, the more can be saved for retirement. Developing good financial habits early can help, and dentists who do so are able to retire earlier and with more money (2).
(1) Got dental student loan debt? Some tricks to help you tackle it. Dentistry iQ.
(2)How To Tackle Dental School Debt. Forbes.
(3) Starting a dental practice – How can you afford it? Dentistry iQ.
(4)New dentists: How much debt is too much? Dental Economics.
About Boyd Industries:
Boyd Industries is a market leader in the design and manufacture of specialty dental and medical operatory equipment. Its high-quality and reliable equipment has been the choice of orthodontists, pediatric dentist, oral surgeons and other healthcare professionals for 60
over 55 years. Boyd’s products include a full line of dental exam, treatment and surgical chairs, dental delivery systems, LED exam and surgical lighting, custom sterilization and storage cabinetry, doctor or assistant seating, and video game consoles.
Boyd equipment is specifically designed to provide maximum practice productivity while incorporating ergonomic characteristics for the doctor, staff and patient. As an original equipment manufacturer, Boyd uses a vertically integrated manufacturing approach to assure it meets high quality standards. This approach allows Boyd to control each step of component fabrication and product assembly. To learn more about Boyd products, please visit http://www.boydindustries.com/ home.
About Adrian LaTrace:
Adrian E. LaTrace comes to Boyd Industries with more than 25 years of leadership in companies ranging from start-ups to large public corporations in the healthcare, renewable energy, and aerospace industries. His experience in developing high-performance organizations is helping Boyd provide leadership for the dental equipment needs of the future.