In this episode of The Business of Practice podcast, Martha Mallicote, DVM, MBA, DACVIM, discussed the importance of creating budgets for your personal finances and your practice.
Mallicote is passionate about budgeting. “Having a budget and being aware of a budget is all about having information,” she explained. “The benefit of having that information is you know what is going on and can make the best decisions based on that.” She added that household expenses and educational debt can be sources of significant stress, and many people prefer to live in the dark about their financial situation. However, this is never the best approach.
Creating a Personal Budget
When it comes to creating a personal budget, Mallicote said, “It’s incredibly important to set yourself up for success by using an approach that you will utilize.” Whether you prefer a detailed or simple approach to budgeting, consistency is key. A common strategy is the 50/30/20 approach, where 50% goes toward necessities, 30% toward wants or desires, and 20% toward some kind of savings, she relayed. “The simplest approach is the pay yourself first approach,” she said. This method involves paying your necessities and savings first. Then, you can use the leftover money however you wish. Many people use spreadsheets or apps like YNAB (You Need a Budget) for their personal budgeting.
Creating a Practice Budget
For practice budgeting, cash flow is very important. A monthly budget can be helpful for understanding month-to-month variability in revenue and expenses. After creating a budget, you can compare actual to budgeted amounts. You can automate this process in QuickBooks and receive a copy in your email each month, said Mallicote. This allows you to make necessary changes and track your financial progress.
In closing, Mallicote said, “Take that first step to make a budget!”
About Dr. Martha Mallicote
Martha Mallicote, DVM, MBA, DACVIM, is a Weeks Endowed Clinical Associate Professor at the University of Florida College of Veterinary Medicine in the Large Animal Clinical Sciences Department. The Weeks Endowed Professorship is appointed to a faculty member who demonstrates exemplary success as an innovator and scholar in teaching and is a role model for collaboration, teamwork, and faculty citizenship as a mentor and educational leader. Mallicote teaches veterinary students in the classroom, the Large Animal Hospital, and the veterinary business curriculum. She is the director of the Veterinary Business Certificate Program for DVM students, a program that has grown to include almost a quarter of the DVM cohort, preparing them to own and operate veterinary practices. Mallicote earned her Bachelor of Science in 2000 at the College of Charleston School of Business & Economics. In 2006, she graduated with her DVM from the University of Tennessee College of Veterinary Medicine. After an internship, she completed a residency at The University of Florida College of Veterinary Medicine and became a diplomate of the American College of Veterinary Internal Medicine in 2012. In 2019, she completed her Master of Business Administration at the University of Florida.
Related Reading
- 6 Ways to Improve Equine Practice Profitability
- Veterinary Wellness Briefs: Smart Financial Moves for Equine Practitioners
- Strategies for New Veterinarians to Pay Off Student Debt
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