When it comes to spending money, I have my quirks.
I tend to buy nice things, I don’t like to use coupons and I would rather do without it than settle for low quality. On the flip side, I refuse to waste money. I will put paper back in the printer that has something printed on one side and I would rather replace the soles on my shoes than buy new ones. It is tough for me to explain the “logic” I use for spending money.
At the Executive Retreat in January, Dr. Mick Kling helped me understand some of my quirky financial habits in his lecture, The Emotional Impact of Money. He taught us that most of us make financial decisions based on feelings more than rationality.
The most common emotional factors in our financial management are greed and fear. When managing the finances of our practices, we too often allow our feelings to make those decisions for us. Sometimes it’s fear that prevents us from making that investment we need to grow. Other times, we spend too quickly because we get excited at a trade show and sign up for that new service that just doesn't make sense for us.
We also avoid uncomfortable conversations about money which is why most of us fail to always make good recommendations to our patients until we know how much they will have to pay “after insurance.” It is also why we give broad percentage raises to all staff regardless of how well they perform individually.
(Here’s on old BLOG about giving raises)
So how can we overcome this tendency to manage by feelings?
Our surveys show OD’s consistently ranking their own management of finances lower than any other area of the practice. On a scale of 1 – 9, we rank ourselves at an average of 4.88 in Financial Management - compared to a 7.76 in Patient Care.
At Leadership OD, we have put together tools to help bring some of the logic into your financial management strategy. Our members always have access to their budgeting calculator, and now we are releasing a tool that we use at WGEC to track all of the metrics we can think of within our practice.
And on April 14, our own Dr. Mickey Kling will host a webinar helping us gain control of our Cash Flow. The title is “Where did all the money go?” and attendance is free to members.
Our Face2Face meetings this month will focus on financial management, bringing doctors and staff together to talk about real challenges we are all facing and how to improve.
We still have more opportunities for than barriers. We just have to keep working on it.
Happy April Fool’s Day,
p.s. To have a better understanding of your Money Personality, some say it is a good exercise to recall your very first memory of money. I will tell you my first memory….if you tell me yours.