You would probably never hear any of them tell you, but most physicians are awful at personal finances. We’re talking about the most basic aspects of day-to-day financial management – budgeting, bill paying, balancing the checkbook, staying organized and looking for ways to salt away some money for savings. It’s not rocket science, but it does take some time and a little knowledge, which physicians in particular have little to spare. Physicians aren’t alone in their poor personal finance habits; it’s prevalent throughout the country at all income levels; but, they may be in the best position to do something about it. Physicians can hire a money doctor, otherwise known as a daily money manager.
If you aren’t familiar with daily money managers (DMM), it’s probably because they don’t really market themselves except through client referrals. Chances are some of your colleagues already use one, but you’re not likely to hear about it from them because the relationship between a DMM and their clients is highly confidential. But they’re out there, plying their special skills and knowledge in the households of the financially strapped as well as the highly affluent. For physicians who are overwhelmed with the demands of daily finances, they can be a godsend.
What exactly does a Daily Money Manager do?
Essentially a DMM can step in to make sure your cash is flowing and that you stay out of financial disarray. They are especially adept at navigating the minutia of insurance plans, loan agreements, benefits programs and financial products.
A multi-faceted DMM can help overwhelmed physicians in a number of ways:
- Completely systematize your finances – set up files, establish online accounts, and consolidate finances on a personal financial software system.
- Create an automated bill pay system and/or take over bill-paying themselves.
- Analyze your cash flow and spending patterns to find ways you can save more or reduce debt.
- Generate daily or weekly reports and track progress on established benchmarks.
- Work with creditors to negotiate better credit terms or restructure your debt to reduce costs.
- hey’ll even sort your mail and communicate with your bank, financial advisor and insurance broker on timely issues.
How to Choose a Daily Money Manager
Unquestionably, a DMM can be a financial savior for over-worked physicians. At an hourly rate of $50 to $75 the return on investment in terms of improved cash flow, cost savings and overall peace-of-mind can be substantial; that is if you find the right one. Obviously you are entrusting a DMM with sensitive information and vital tasks, so selecting a qualified DMM should be done with thorough due diligence. DMMs are no regulated and certification is not mandatory, but they should at least belong to the American Association of Daily Money Managers which imposes a strict code of ethics. Members must be certified which requires they pass a proctored exam and clock 1500 hours of actual paid service.
While the AADMM would be the best place to start in your DMM search, you should have a set of criteria to follow in evaluating and selecting one:
- A complete resume that includes verifiable work experience, educational background and relevant education and certification in the personal finance field
- At least two personal and two business references
- Fully bonded and insured
- Complete background check including criminal and credit
When they can get into financial trouble for any number of reasons, physicians can hire a money doctor who can assess their situation and prescribe a remedy. They can be a financial handyman, fixing leaks; they can be a therapist of sorts working with married couples to resolve financial disagreements; they are a coach, holding their clients accountable based on game plan they agreed to follow. They can be an educator and trainer to empower you, or they can be a surrogate to free you of the daily burden of managing your finances.