Training as a GP is a demanding yet rewarding journey, but managing your finances effectively during this period is crucial for both your peace of mind now and your future as a qualified GP. Whether you’re salaried, working as a locum, or planning for the transition to self-employment, budgeting and financial planning are essential. Here are some practical tips to help you manage your money effectively.
1. Create a Budget and Stick to It
A clear budget is the cornerstone of financial stability. Begin by tracking your income and essential expenses, including rent/mortgage, utility bills, transport, and food. Factor in costs specific to your GP training, such as exam fees, courses, and memberships. This will then allow you to see how much disposable income you have left.
💡 Tip: Use budgeting apps like YNAB, Emma, or even a simple spreadsheet to monitor your spending and set realistic limits for discretionary spending.
2. Understand Your Payslip
As a GP trainee, your income might vary due to out-of-hours work or additional responsibilities. Take time to review your payslip, understand deductions like tax, National Insurance, and pensions, and ensure you’re being paid correctly for any additional shifts or on-call work.
3. Plan for Exam Fees and Professional Costs
GP training involves several mandatory exams and courses, which can add up quickly. Allocate a portion of your income each month to cover these costs. Remember, many professional expenses are tax-deductible.
💡 Tip: Keep receipts for all professional expenses, as you may be able to claim tax relief on them later.
4. Consider the Tax Year
The UK tax year runs from April 6 to April 5, and keeping track of your earnings within this period is crucial. Whether salaried or locum, ensure your tax code is correct and take advantage of any tax reliefs available to you.
💡 Tip: If you’re moving into locum work, set aside 20-30% of your earnings for taxes. Consider opening a separate savings account specifically for this purpose.
5. Prepare for Locum Work
Many GP trainees choose locum work, which offers flexibility and higher hourly rates but comes with additional responsibilities. As a locum, you’ll need to:
- Register with HMRC for self-assessment.
- Keep detailed records of your income and expenses.
- Pay National Insurance contributions directly.
- File an annual tax return.
💡 Tip: Consider using accounting software or hiring an accountant to simplify the process and ensure compliance.
6. Build an Emergency Fund
Unexpected expenses can arise, from car repairs to exam re-sits. Having three to six months' worth of living expenses in a separate savings account can provide financial security and peace of mind.
Sickness or injury can also affect any of us of at any age and at any time. In fact, a record number of 1 in 16 people are off work long-term in the UK. So if you are a locum, sickness will not be covered by your employer leaving you exposed should you become ill or have an injury that stops you from working. Through our partner PG Mutual you can make sure you have income protection, providing you the financial safety net.
7. Start Saving for the Future
While retirement may seem far off, contributing to your NHS pension is an excellent way to secure your financial future. Additionally, consider opening an ISA (Individual Savings Account) or investing in low-risk funds to grow your savings over time.
8. Seek Financial Advice
Managing your finances as a GP trainee can be complex, especially if you’re thinking of transitioning to self-employment. If you’re unsure about budgeting, tax planning, or saving, seek advice from a financial adviser who understands the unique needs of healthcare professionals.
9. Stay Informed
Healthcare professionals have access to several financial resources, tax benefits, and deductions. Stay informed about changes in tax laws, pension schemes, and locum regulations that could affect your earnings.
By doing even just a few of these things, you can take control of your finances during your GP training and beyond. Effective money management not only reduces stress but also sets the foundation for a financially secure future for you.