Striking the right work life balance
Why knowing your numbers is the first step in achieving work-life balance, by Thomas Dickson, Wealthwide
Striking the right work life balance has never been so important for dentists. The last two years has put an incredible strain on the profession and according to a recent British Dental Association survey, more than 40% are considering leaving dentistry in the next 12 months. So what personal financial steps can dentists take to ease the pressure on themselves and maintain a career in dentistry?
Thomas Dickson, chartered financial planner at Wealthwide, explains how understanding your full financial situation is the first step in managing the work-life journey effectively.
At the start of the year, one of our clients told me how concerned he was for his wife who’s an NHS dentist. He describes her as “a loyal and committed NHS believer who has been gradually ground down further and further by irrational decisions and poor management”, and that this has without doubt “had an impact upon her health”. The final straw for my client was the announcement that NHS practices must achieve 85% of their pre Covid targets from January to March 2022 and that any over-performance would not be carried over into the next quarter.
Don Robertson, the principal of Whitehouse Dental Practice in Sutton Coldfield, who has been practicing for 35 years admitted that in Autumn 2020 coming out of lockdown “was the most challenging time of our practicing career.”
Many other dentists we advise have long accepted that weekends are often filled with administration, paperwork and completing all the management tasks that just can’t be done during the working week. So in this current climate, where the pressures on practices and individuals are greater than ever, is it possible for dentists to pursue a fulfilling and profitable career and still have time to enjoy the journey of life?
I’m not suggesting we can wave a magic wand to remove the sheer volume of work and stress that many dental professionals are experiencing, but I do believe that understanding your financial position can give you knowledge and ultimately the ability to make what can be life-enhancing choices. For some dentists, having the peace of mind that they can afford to make significant changes could be the first step in achieving a better work life balance.
Are you better off than you think?
In my experience of working with dentists over the last twenty years, one of things that keeps cropping up, is that most dentists don’t realise how wealthy they are. I’m not suggesting that any of the dentists we advise are going to make it onto the Sunday Times Rich List, but most are certainly earning enough to afford a very comfortable lifestyle.
I recently prepared a financial plan for a couple in their early 50s who had completely underestimated how wealthy they were and the impact on their future financial security. When I showed them their numbers, taking into account NHS and personal pensions, equity in property and all their other assets and liabilities, they were genuinely shocked. They certainly don’t need to be putting more money into pensions, or taking out more life cover. The reality for them is their comparative wealth means they could afford to scale back on their clinical hours, without it negatively impacting their lifestyle. It also means they could put their practice on the market when the time’s right for them.
A change of mindset
Many of us struggle to change the mindset or attitude towards money that we had when we first started out in our careers, when we were inevitably less secure financially. It can therefore be difficult to make changes, from reducing your clinical hours, or taking longer holidays to handing back your NHS contract. Understanding how wealthy you are is therefore key to creating a new mindset and pursuing a better work-life harmony, for now and the future.
Some principals are keen to set up a second or third practice, without stopping to think about what they really want. Having two properties or leases, double the number of staff and patients is almost certainly likely to lead to an increase in stress levels. The reality for most principals is that focusing their energy on one practice, and doing everything they can to improve that business, is far more likely to result in higher profits, less stress and perhaps most importantly, given the points in the above section - a better work-life balance.
So how can you afford to work less hours and still have enough to retire?
Principals have several options as they are in charge of the practice and can make key decisions. Some clients who have managed this successfully, (as well as every business coach I ever speak to) tell me the key is to recruit the right staff, train them, delegate, and then keep training them. And as Richard Branson says, “surround yourself with people that are smarter than you and your business will thrive”. As a business owner, I’d agree that this is absolutely key to creating a great work-life balance.
Don and Helen Robertson believe the key to their thriving and smooth-running practice is having a great team around them. They employ three part time experienced associates who share the clinical work, which has enabled Don to considerably reduce his time in the surgery, but ensure the surgeries are fully utilised. The practice enjoys generous staffing levels which may not help the bottom line but the Robertsons believe it’s worth the additional costs – it’s better for their patients, and helps to reduce stress levels when a member of the team is unable to get to work.
The other key aspect to building a greater degree of security, is having a guaranteed monthly income. As the owners of a private practice, the Robertsons have built a membership plan with Practice Plan. They provided a lot of help when they were starting up, but have also been great support throughout the life of the practice, particularly during lockdown. It’s therefore absolutely crucial to ensure you have the right team in-house as well as the people and teams that you outsource.
Although associates don’t necessarily have the ability to make key decisions in the practice or delegate to others, it’s worth considering the advantages of working part-time, having a break from clinical work and using the spare time to take postgraduate courses. By taking time out to improve skills and generate higher value treatments, it’s very possible for associates to continue working part-time and maintain their earnings.
As specialist financial planners, we work with dentists of all ages, and particularly enjoy helping those approaching the sale of their practices. I’ve lost count of the number of dentists in their 50s and 60s that we’ve met, who will probably never need to draw an income from their personal pensions. Does it make sense to work as many hours as possible in your 30s and 40s, investing hundreds or thousands of pounds into savings or pensions, that you’re never going to need? Although it can provide some added financial security or peace of mind, in my experience I’d always recommend focusing on what you really want to do between now and the day you die.
Boxed Copy
Checklist to creating a better work-life balance
Most dentists are (or are likely to be) wealthier than they realise and have the option to work less hours. Many aren’t even aware that this is possible, because they haven’t worked out how much money they have and how much they’re going to need for the rest of their life
Spend the time doing the numbers and calculate whether you could remain financially secure and less stressed, by working fewer hours, taking more breaks or delegating / outsourcing more of your work
Some dentists who are considering leaving the profession completely, might first benefit from spending time figuring out how to improve their work-life balance before exiting completely, eg considering part-time hours, postgraduate courses, having longer weekends, saving less into pensions, restructuring their mortgages to release some equity
If you can enjoy the journey, your morale is going to be higher and you’re far less likely to suffer burnout
Owning a practice gives dentists the option to build a business that allows them to be away from the practice
If you’re a principal, having regular breaks in the year and time to reflect can actually make the practice more rather than less profitable
With the combined impact of Annual and Lifetime Allowance tax charges and the move for all members to the 2015 scheme in April 2022, the impact on your NHS Pension if you reduce your working hours may be less than you think.