Managing Financial Behavior

Humans are not wired to work well with money, primarily because the behaviors that kept us alive during the Stone Age — acting on instinct and feelings — can destroy us financially when we (or family members) visit the mall. A lack of smart money habits is especially concerning for MDs given the reality of lower federal and state reimbursements for medical care, vanishing or lackluster pensions, and an under-funded Social Security system. Today, Americans save just 4.9% of their income per year1 — not nearly enough for long-term financial security.

One of the biggest challenges physicians face is adjusting their financial behavior (and often that of their spouses), so that they develop habits of wealth. Money decisions are emotional and the majority of financial habits are formed when we are children. The dopamine released by immediate gratification encourages impulse buying; thus leading to behavior that is more “McCoy” than “Spock.” Further, with the “spend more and feel better” message pumped into our heads 24/7, and a society where few use cash or checks anymore, impulse spending is rampant.

You cannot control the capital markets or your physiology. What you can control is your behavior; and, ultimately you will be held accountable for your money behavior. By understanding your personal money temperament, or how you feel about money, and then building a strategy around your unique disposition, you greatly increase the probability that you will enjoy financial security.

So, how does a doctor develop habits of wealth? First, list your five most powerful core values. Here are several suggestions: financial security, helping others, providing for family and gaining wisdom. Then list realistic goals that will help you realize these core values. Examples include: financial independence by 65, paying off the mortgage, funding your children’s college educations and volunteering two days a month to a cause of importance to you.

Second, benchmark your financial position by evaluating your net worth and cash flow. Also consider hiring a financial planner to help you with this exercise. Their expertise quickly makes up for your limited time; and recognize that your expertise in the operating room does not translate to technical knowledge with money. As an exercise, look at your bank statement for the last three months and notice where your money goes that may not support your core values — such as cars, jewelry, clothes and other luxuries. To quote Benjamin Franklin, “a small leak can sink a big ship.”

Third, develop actionable strategies, based on your financial position and goals. Ideas to consider may include automatically saving 20% of your income to retirement accounts, over-paying your mortgage by $500/month, or only eating out once a week. It is imperative to build such strategies around your money temperament so that you will follow through and implement the strategies.

Finally, monitor your progress and remind yourself of your five core values each day. Meet with your financial advisor every six months to ensure that you are staying on track. Taking a few hours out of your schedule twice a year for these meetings can have a tremendous impact on your long-term financial health.

Evan P. Welch, CFP,
of Antaeus Wealth Advisors, LLC, establishes enduring relationships with clients and their families. His clients include physicians, business owners, retirees, professionals, and those in transition. Based in Boxborough, MA, Antaeus brings peace of mind to clients by pro-actively solving their financial puzzles and helping them make informed choices with their money. Welch can be reached at or 978-264-9999, ext. 206.


1U.S. Department of Commerce, May 2011.