Wellness Corner: Financial wellness practices for owners and employees during uncertain times

Financial stress is a major contributor to distractedness, mistakes, and missed days at work—not to mention the havoc stress wreaks on the body.^1,2 Economic downturns are challenging for everyone, but they can be particularly stressful for dental teams who depend on steady patient flow and operational stability. Dental practice owners who want to reduce these production killers may want to implement financial wellness practices to support their employees’ financial health, as well as to guide individual team members on securing their personal finances.

Understanding financial wellness

According to Annuity.org, financial wellness involves the ability to manage economic life effectively, reducing financial stress and building a secure future. It includes budgeting, saving, investing, and planning for potential financial challenges.³

Strategies for dental practice owners

As a leader, dental practice owners have a significant role in fostering a financially resilient team. Here are some strategies to consider:

Offer financial education

We don’t know what we don’t know. Conduct a workshop on financial literacy. Topics could include budgeting, debt management, saving for emergencies, and retirement planning. Bringing in financial advisors or experts can provide credible advice and personalized tips, often at no charge and with live online options.⁴

Introduce flexible spending accounts (FSAs)

FSAs allow employees to set aside pretax money for eligible expenses like health care and dependent care. This can reduce taxable income and free up funds for essential expenditures. Setup is usually just a few hundred dollars and a small $5 monthly fee per employee.⁵ Want a no-cost version? Consider offering an in-house savings contribution fund (post taxes) to be distributed at the end of the year (previously called a “Christmas fund”). This employee-sponsored account can provide financial relief during high spending.

Match retirement contributions

Encourage long-term financial planning by offering matching contributions to employee retirement accounts. This not only aids in building a secure future but also demonstrates a commitment to their overall well-being.

Pick up the tab

Small, simple gestures like access to a water dispenser, a coffee machine, or snacks allow team members to lighten their daily financial burden. CE, training and uniform allowances are also benefits that can have a generous ROI for employee retention and gratitude, which can lead to higher productivity. Incentives for “perfect attendance” or “healthy/healthier bloodwork” could include reduced health insurance premiums, paid gym memberships, or contributions toward a retirement fund.

Challenges

What we focus on is what grows, including financial wellness. Consider a team debt reduction challenge (similar to a team fitness challenge) where the person who reduces the highest percentage of debt wins! A “no takeout” for lunch challenge can encourage team members to bring lunch to reduce costly eating out. This can be incorporated into practice goals such as reducing supply cost for the office.

Individual recommendations for dental team members

Employees can take proactive steps to enhance their financial wellness:

Create a budget

Develop a detailed budget that tracks income and expenses. Identify areas where spending can be reduced and prioritize essential costs. This will help in managing finances more effectively and preparing for potential income fluctuations. There are many free budget apps available to help that can be linked seamlessly with bank accounts.^6,7 The experience is often eye-opening!

Build an emergency fund

Aim to save three to six months’ worth of living expenses in an emergency fund.⁸ This fund serves as a financial cushion during times of unexpected financial strain. Putting this emergency fund into a separate HYSA (high-yield savings account) earns interest well above a traditional savings account, while ensuring that it’s not easily accessed with a debit card.

Reduce debt

Focus on paying off high-interest debts to avoid unnecessary financial burden. Even $5 more than the minimum is helpful to get out from under debt. Potentially consider debt consolidation after speaking with a financial advisor to develop a manageable repayment strategy.

Invest wisely

While saving is important, investing wisely can help grow finances during uncertain times.⁹ Depending on the individual age and current financial situation, investigate low-risk investment options that can offer stable returns, and diversify a portfolio to minimize risk.

Seek financial advice

Regularly consult with a financial advisor to review your financial situation and get professional advice on managing finances. This can provide clarity and strategic direction.¹⁰

Utilize employee benefits

Take full advantage of the benefits offered by your employer, such as FSAs, retirement plans, and EAPs. These resources can significantly enhance financial wellness.

At the end of the day, practicing financial wellness involves both collective and individual efforts. Dental practice owners can support their teams by offering financial education and benefits that promote financial stability, which are then often reciprocated with gratitude and productivity. Meanwhile, team members should take proactive steps to manage their personal finances, build emergency funds, and seek professional advice. Together, these practices can help dental teams navigate economic uncertainty with resilience and confidence, ensuring both personal and professional well-being.

Editor’s note: This article first appeared in Clinical Insights newsletter, a publication of the Endeavor Business Media Dental Group. Read more articles and subscribe.