If you want to learn more about Evon and their work, you can visit their website at https://optometrywealth.com/.
March 8, 2023
Transcription:
Read the Transcription
Evon Mendrin: If there as behavioral things, or like you talked about, like mindsets learned throughout their lives about how to handle their money, your 401k is not going to solve how one of your team members decides to spend their money at home. It’s just not going to solve the debt issues in their life. It’s not going to solve all these other things. So maybe these other benefits these other financial wellness benefits, actually we’ll get a little closer to helping them make decisions with some one on one conversations.
Dr.Bethany Fishbein: Welcome back to the Power Hour Optometry Podcast. I am Bethany Fishbein, the CEO of the Power Practice and host of this podcast and my guest is a repeat visitor on the podcast. I’m excited to be talking to Evon Mendrin. He’s a Certified Financial Planner and founder of Optometry Wealth Advisors. Evon, thank you for coming back.
Evon Mendrin: Thank you for inviting me back. Once again. I’m always excited to talk with you Bethany. So I’m excited to be here.
Dr.Bethany Fishbein: Well, so the topic is a little bit different, today. It’s not so much about optometrists managing their own money, but I wanted to talk about some of the situations that come up. When a practice owner staff is having issues or problems with money. Because we get these calls periodically of a staff member is asking for a loan, a staff member asking for an advance on their paycheck. Staff members in a really tight financial situation and I’m thinking about helping them out. And nobody really knows what to do with those. So I’m hoping we can just talk through some situations and hear your thoughts on a few things and have conversation that makes us both think as our conversations usually do.
Evon Mendrin: Yeah, I think this is a great topic, sort of a mix of financial planning decision making and HR and sort of blurring the lines of what’s appropriate between an employer and an employee and all these different areas of thought, sort of come together here and you and I were talking just before we started recording of why should practice owners think about the I guess we can call the financial wellness of an employee. Why should that be on the minds of the practice owners? And I think if we step back and sort of think about the real issue, and I think what we every business owner needs to keep in mind is that financial wellness is important from an employee’s perspective because of how financial stress could creep into the workplace. For an example, as an example, the American Psychological Association puts out this stress in America report I think every year and their research shows that money decisions and just financial stress has been one of the top two sources of stress in America for several years now, even through a pandemic and two presidential campaigns. Right. So, finances have been among the top one or two sources of stress, at least in America according to their research. And you can find all kinds of reports about how that financial stress gets into the workplace and how that impacts businesses. SHERM, which is the Society of Human Resource managers. They referenced this as a 2016 report. So it’s a little bit old, but they referenced a survey report that was done that said, four to five employers so I think it’s about 80% of employers. reported that financial stress is lowering their employees performance level. And they have sort of an estimates in there about how many dollars that’s costing the business. So on the one hand, there is just a human element like we want to see other humans around us, make good decisions and be well and not stressed but at a very minimum, every practice owner does want to keep in mind that I’m sure you’d want to see your employees come into your practice and work productively for your practice and to be fulfilled in the role. And so we have to sort of acknowledge so that your team is giving the best effort it can. For your practice, we do need to sort of acknowledged that financial wellness is important just like physical wellness or mental wellness. Financial wellness is an important part as well.
Dr.Bethany Fishbein: And I have to be honest, as you say that, that makes me feel a sense of relief. Not that it exists and not that this stress is out there. I’m not relieved about that. But I think when these things have come up for me and my own practice, it’s always personal. Am I a good enough boss? Am I good enough friend, could I do this for someone who I care about? Could do this for somebody I care about but just at a work level? And it’s always been the personal side. That’s in my mind when these questions come up. And I feel that when clients bring up but to acknowledge that it absolutely is a work productivity issue, and when we can help a work productivity issue, it’s in our benefit to do it makes me feel like okay, maybe it’s not just that I’m a wuss maybe I’ve been trying to improve productivity all this time. And that’s why we’re having these talks.
Evon Mendrin: Again, there is the human element like I’m sure you know, if you’re listening, you may be someone who just wants to see your team make good decisions, but even if you don’t feel like it’s your responsibility to step into that role and get involved in their lives. At a minimum as the owner of your practice, you do want to see that your team which is maybe the most valuable investment in your practice, is operating as best as it can and I know for me both as an employee in the past and now being self employed owning the business. Whenever I’ve been very stressed about something outside of work, it has impacted the way I’ve showed up to work each and every day and my focus at work so you have to keep that in mind regardless of what your motivation is for wondering about this and thinking about it. You have to keep that in mind because it can absolutely impact productivity in the workplace.
Dr.Bethany Fishbein: So Evon, you said before the word responsibility and what’s our responsibility to an employee as practice owners and I mean, just to make it clear from the get-go, really, our responsibility is to pay them the salary we agreed upon for hours worked. That’s it, right?
Evon Mendrin: I agree. And I do want to say like, I’m not an HR specialist, like there’s HR specialists and leadership specialists and you know, there’s a whole world of specialties that go into this that talk about, you know, what makes a good workplace, what makes a good culture? Where are the responsibilities of the employer start and end? I don’t have all the answers from that perspective, but just thinking about it. If I were to talk with a practice owner and just having a conversation with them about it, I don’t think you as a practice owner have the responsibility to step in and directly guide your employees what to do with their money. I think you should provide them a market-based wage for the work they do and a living wage based on their roles and provide a workplace of course a culture that is fulfilling to them and they can go into each and every day. But I don’t think you need to think about or feel the pressure of having this responsibility beyond that. I also don’t think you want to put yourself in a position where you’re giving financial advice to your employees. I just don’t think you want to put yourself in that position where you’re making money decisions for them or putting yourself in a spot where you’re responsible for decisions that they make. I just don’t think you want to put yourself in that position. But in the business, you can give them tools and resources so that they can make good decisions for themselves. And you can build in incentives and education to help them do that. And I think that’s really where your strengths as a business owner can really come in. It’s one thing if you see one of your employees getting taken advantage of clearly and maybe that’s where you might step in and just politely give your thoughts. I don’t really think you want to step into that role of directly advising someone on how they should handle their money. And that’s assuming they’re asking for it, And if they’re asking for it? I just don’t think someone will want advice unless they’re seeking it and or maybe they just don’t want to hear from me, but I think it’s about the tools that you can provide that help them make good decisions and then the incentives you could build in using those tools and it’s really those are the benefits you provide in the business.
Dr.Bethany Fishbein: So let’s talk about some of those. I mean, obviously, paying a salary is number one, and one of the things that we talk about when we talk about culture and creating positive culture is that once you set that salary and expectation, that’s really not something as a practice owner that you should mess with. Like if you have somebody making a certain wage expecting to work 40 hours a week. Sometimes we get questions like Well, I’m not going to be here that day. So I’m going to tell staff we’re closed that day. You can’t do I mean, you can but you shouldn’t do that. It’s not good culture to start changing around how many hours somebody is going to have from what they’ve been promised. But in addition to just paying them what are some of the other tools or things that you can give that set them up for some financial success.
Evon Mendrin: The core benefits that you are going to hear a lot about are really where you’re going to start and this is the retirement benefits and something healthcare related to big stresses on everyone’s life is well do they earn enough money to pay their bills, but then it’s future retirement security, and it’s paying for health care expenses. So providing a retirement plan in the practice I think is important not only for the practice owner that’s a huge planning tool for the practice owner but for the team as well. And so you have your simple IRAs or the 401k. And you can build in incentives into these plans to encourage your employees to partake to get them to use the tool for their own benefit. For example, you can build in a match so that’s if the employee puts in X percent of their own income, you’re matching dollar for dollar up to a certain point, you’re incentivizing them to say hey, if you participate, we’re going to give you extra dollars like this is part of your compensation that you can earn by using the plan. You can also build in different things like different behavioral nudges. So for example, you can do things like auto-enrollment, which is as soon as an employee is eligible, they’ll be automatically enrolled in the plan. And they’ll have to make a decision to opt out of it, instead of them having to make a decision to opt into it and start using that they’re automatically enrolled in the plan. And so there’s these behavioral tools you can use to sort of nudge them and just use our natural inertia to get them into the plan and assuming that they can actually afford it from a cash flow perspective and you’ve got a good default investment option there. That can be a good way to do that. There’s also things like auto escalate, which is a feature in a 401k that will automatically increase their contributions each year. So there’s these tools and incentives you can build into the plan.
Dr.Bethany Fishbein: You’re talking about this and I’m writing this in my little notebook here because it’s one of those things that’s so stupidly brilliant. Like somebody says something and you’re like, oh yeah duh, it’s kind of one of those because we have a simple IRA in the practice. And every year we talk with the new team members who are eligible and we show them compound interest. And if you save this and you know if you put in $50 It’s like we give you $50 Like the match and it’s free money, and inevitably somebody doesn’t do it. And then the following year, wow, you never signed up last year. I meant to I just didn’t get around to it. And it’s like, Agh!, so I liked the idea, right? When you hit the threshold of eligibility, you will be automatically enrolled and can you say you’ll be automatically enrolled and 3% of your salary will be put in?
Evon Mendrin: There’s a certain that I have to review what it is now there’s a certain percentage at which you can auto-enroll them. You do want to have a good default investment. So something that makes sense so they’re not sitting in cash, and you do need to make sure they’re aware of it, but we’re often our own worst enemies, right? Our own behavior is often the thing that keeps us from doing things we need to do. Sometimes just the fact that you need to use an extra piece of paperwork to sign up for the simple IRA plan can keep someone from doing that for years. And you can keep saying oh, I meant to I meant to well, in the 401k you can build in some of these features to sort of nudge you to do that. And that inertia will just keep you in it because it’s more difficult to opt out of it than it is to just stay in it. And there’s a book I think it’s called nudge. Actually, I think it’s Richard Thaler is the author. I’ll have to confirm that. But the whole book is about behavioral nudges, how we create rules and incentives to sort of overcome our own behavioral deficiencies like how do we create rules against ourselves to do some of these things? And that sort of research is where these bells and whistles came from is, humans are going to use inertia for good or for bad and unless it’s really easy to make a decision. Sometimes we’ll keep doing something that’s not in our best interest. Simply because it’s easier.
Dr.Bethany Fishbein: Once that change is made. It doesn’t take long before you start to see this snowball of the positive results. Like we’ve had people that just they did the paper they signed up and months later they can’t believe that they have this money because they’re not accustomed to saving or they don’t have a plan to do that. And with the match their money is immediately doubled. So regardless of what happens with the investment, it’s it’s a lot. They put in 30 they have 60 The next payroll they put in 30 More they have 120 to them, they’ve only put in quote $30 They did it twice, but like 30 turned into 120 it feels like magic once it starts, but this is one where it come up actually I agree with what you said. You can take on the responsibility of making financial recommendations for your employees because you might follow stocks, you might be putting your own money into something but you don’t know. And you never want to be in a position where all of a sudden they have less money and it’s your fault, that can happen. So once they’re putting in is it typical? Like I think our plan has advisors or it has like age banded, we’ll put you in this and we’re happy to speak to you if you want to do something else is that traditionally how it’s done.
Evon Mendrin: I think if you want like a default option, that’s if someone’s going to be for example automatically opted in and you want something that they’re going to automatically be invested in that’s suitable for their needs. And so like you mentioned, there’s often these target date retirement funds like I said, like the look at what year specifically like what year you may retire, it’ll select a mix of different investments like stocks and bonds, maybe even some real estate that’s generally appropriate for that timeline between where you’re at now, and until that year you’ll retire. And then over time, it will get more and more conservative meaning it’ll own less and less stocks and it’ll own more and more bonds. So that can be really an employee doesn’t know what else to do and they need somewhere to start. That can be a place they can start because it’s going to do a lot of that work and thought for them. And as they learn more if they want to learn more or if they have guidance from a good advisor or rep on the plan, then they can start to make other decisions for themselves. But I think what you mentioned too is having a good partner like having a good rep on the plan or having a good advisor on the plan. A good third party administrator if you have a 401 K, like they’ll provide that at least annual education for the employees. They’ll should be available to answer questions like that’s valuable if it’s someone that’s good and can really articulate the value of that really well. That’s available to answer questions, even if it’s one on one or by email like that is a valuable part of using a plan as well.
Dr.Bethany Fishbein: There’s benefits to the staff person and having this set up and having that person comes they provide that education and they’re treating them as an investor because they are an investor and so it starts to change their perception a little bit. And then obviously there’s also great benefits the practice and practice owner of doing something like that. So that’s a good one. The other big thing that you mentioned or talk to is some providing health coverage. Talk more about that.
Evon Mendrin: Yeah, well, first I want to go back and say there was a recent law passed in December called the secure Act basically 2.0 and there are a whole bunch of changes, good enhancements to SIMPLE IRAs and 401k. So just talk with your people involved in your plan and say, Hey, am I taking advantage of all the tools I need to the bells and whistles? I need to take advantage of this plan. So that’s just a good invitation to do that. But yeah, healthcare, what do you do about healthcare and it depends on each practice what they want to do, especially with small businesses, you know, it depends on who’s actually going to want to be involved in a health care plan, versus who has coverage with their spouses. It gets a little tricky with smaller businesses to figure out what to do with healthcare because it can be really expensive, or you may have most your employees just wouldn’t participate because they have coverage elsewhere. I think what you should explore, depending on what your employees want is should you have a health care plan, a group health care plan and you can work with a good broker to figure that out and run the math there but you can also do things that are more reimbursement plans, healthcare reimbursement plans. It’s an arrangement where you don’t necessarily need to take on the full health care plan and the practice, you can allow your employees and yourself to have your own coverage, but you can reimburse them for health care expenses, premiums, out of pocket expenses, different things like that. One of them is called a QSEHRA. I think Google will be your friend there and tell you more about that. But that’s basically an arrangement where you are for your employees. This is not something the owner can take advantage of, I don’t believe but for your employees, you can reimburse them up to a certain dollar amount each and every year for individual or for a family. They have to have a certain level of health care coverage. But this is something that will allow you to and it’s not going to be taxable income to them. So this is something that will allow you to at least provide some sort of financial support with healthcare costs. And you don’t have to take on that full responsibility of doing the health care plan in the practice. There’s other options like that. I think you can get a little bit creative. Or you can just provide an extra stipend or extra bonus amount, but healthcare is important. I don’t know that there’s any easy solution for smaller businesses, just because of the cost. It’s so expensive, but there are other types of creative options out there that don’t really require a huge administrative responsibility on your part.
Dr.Bethany Fishbein: What about other insurances? I know we get solicited periodically by vendors of insurance companies that will provide a small life insurance coverage for funeral expenses. If you get cancer we’ll give you this amount of money like I don’t know what the name for that kind of coverage is, but they always want you to buy that for your employees or to talk to your employees. Let them buy that for themselves. Is that something people do?
Evon Mendrin: Yeah, it’s like this supplemental insurance coverage basically, it’s like Aflac. I mean, basically, it like fills in gaps of other insurance coverage, right. And were very specific cases. In general, it should be the among the lowest priority in terms of like what type of insurance coverages either you or a staff member should look at the big three I think are most important healthcare, a life insurance, and then Long Term Disability Insurance. Those are going to be the actual biggest risks in someone’s life. And I think that’s where insurance makes the most sense. There’s nothing necessarily wrong once you’ve gotten those covered as best as possible. There’s nothing necessarily wrong with purchasing these other policies, this supplemental type stuff, but I think a lot of times I would prefer some of that type of coverage to be dealt with savings like those are some risks or expenses that you can sort of plan for by just building an appropriate emergency fund and paying with that out of savings. And that’s the same with like, I sort of think about those in the same way think about like insuring your phone or extended warranties on a car like there’s these coverages that, yeah, maybe there’s nothing wrong with buying them. It may or may not make sense depending on what each thing is covering. Like you need to really look specifically at what’s being covered. Compare the potential cost versus the premium, but I think a lot of times with some of these things, it’s just you’re almost better off to saving the money yourself building an appropriate emergency fund, and then just allowing yourself to cover it when it comes up. Maybe if there’s no emergency fund maybe if there’s no cash available in someone’s life, maybe these things will sort of be like that bridge to get you there until you have that but I would rather see a lot of times savings sort of take over that risk.
Dr.Bethany Fishbein:
So it starts to get a little bit tricky though. And you and I have had several really interesting conversations around mindset and just how people think about things and you’re saying this and it makes perfect sense to me, right? Yeah. Okay, so the money that you would put into the insurance or the warranty, as long as only one person in our family of four loses or breaks their phone each year. If I just save that money we’ll come out ahead. But I think the mindset of a lot of our staff members is really quite different. Where a monthly expense makes sense, where a monthly savings of the same amount doesn’t make sense or is always going to get pulled into something else. So talk a little bit about how you start to teach somebody or educate somebody towards that savings mindset, assuming they’ve got a little bit of road to be able to do so. And I know that for many families, that’s not an assumption you can just make but for many families it is.
Evon Mendrin: Yeah, that’s a big assumption, right? Do you actually have the cash to put towards something else besides just covering expenses? That’s a tough topic because I don’t know that there is one answer to it, where a lot of my conversations start and I gotta say all of my conversations are with optometrists or other professionals that do have the extra cash flow, right. So a lot of times I’m not necessarily having conversations with staff members that have a totally different financial situation but a lot of the cashflow conversations start with just clarity of look,, okay, you know, where is your money actually going, but then talking through like what is actually important to you? What is valuable to you is providing for college costs for kids valuable to you is saving for your future valuable to you, whatever it is, what is actually valuable to you in your life? And then is where your money going line up with that? And if not, what can we do to change that? Can we give your dollars a job in order to sort of benchmark it or set it aside for very specific stuff. So I think a lot of it is just comes down to clarity around where your money’s going. A lot of people just don’t know. They don’t know what they’re spending they don’t know what they need to spend. They don’t know what is valuable to them or they want their money to go or do for them. And seeing okay is where your money going now does it align with that stuff? I think a hard part for all of us is to think about your future self. I think a lot of times we’re thinking about what’s directly in front of us and not really thinking about the future. And so a lot of our money decisions really are just about what do we want or need right now. That’s another challenge too is how do you start to think about this future self like yourself in the future as this person and you need to decide whether you’re going to support yourself now or yourself in the future? And there’s been some interesting studies on how to do that. You know, for example, people who look at pictures of their older selves. Or have some sort of physical reminder of themselves in the future, tend to make better financial decisions. So maybe tying something physically to your future self like sort of put some flesh and muscle around it like it’s a real person. But that’s the challenge is how do you start to look at your future self as something that needs planning for and then start to balance in my spend money for today? Do I put money towards things today, versus what does myself in the future need? And how do I plan for that? That’s another challenge too.
Dr.Bethany Fishbein: those seem like super appropriate conversations to be having as a financial advisor, and maybe also as a parent. As an employer. It’s a little bit less clear. It’s tough, right? You see people and sometimes they will ask for an opinion, or maybe they’re just venting, but it’s a small office and you’re there. So you’re hearing it’s four days still till payday, and I only have $5 and an empty gas tank or you’re hearing it and maybe you’ve done some of this work to figure out how to help yourself in that situation. I know you said you only work with optometrists, we only work with optometrist too but I’ve seen some that don’t know this and don’t have positive cash flow situation like they have to learn it depending on what attitudes towards money were raised with. So sometimes it comes up in conversation I don’t think I can ever see a situation where he’d say all right employee. Let’s sit down and talk about your spending habits. Like that feels really inappropriate. But not even so much like your older self but I want to be able to take in vacation next year. We asked staff about their personal goals. And okay, would you mind some suggestions on maybe how to do that? I don’t know. It’s hard to imagine it starts to tread closer to that line of what it feels like you probably shouldn’t be saying sometimes. I don’t know.
Evon Mendrin: I agree. I always lean towards how do you take that responsibility or onus off of the practice owner, but provide the tools so that they can do that? One other thing I’ve seen come up which I think is really cool is actual financial wellness benefits or companies and so what those companies do is they will provide for your employees, educational articles and videos and webinars and classes around a whole range of financial topics. But then they’ll also provide like one on one financial coaching around cash flow around debt management, things like that. And then some of them will even provide one on one conversations with CFP certified financial planners and talking about retirement planning and even give like really basic projections and have an open forum to talk about all sorts of stuff. So I think that’s a really cool way to provide education. Okay, you provide the tools you provide the 401k you provide these benefits. You provide some information about it, but it’s another thing to then provide someone one on one to be able to talk to them about it and provide some sort of accountability and sort of explain how all this stuff applies to their life specifically, so that you as a practice owner, don’t have to. There’s several companies out there that are sort of providing this, some of them are built for larger employers, some of them will scale down to whatever business size you’re in and sort of build something for you. So maybe that’s a way for a practice owner, if that’s really concerned to sort of provide that guidance or at least ability for them to talk with someone one on one. I even know some of my peers, other financial advisors who are adding that as a service in their own businesses. So so that’s something to think about as well. If you want to sort of go down this rabbit hole of how do we provide more and more financial tools for our employees. That’s something to look at too besides just the benefits themselves because the benefits of the tool but if they’re not sure how to use them, if there’s behavioral things or like you talked about, like mindsets learn throughout their lives about how to handle their money, your 401k is not going to solve how one of your team members decides to spend their money at home. It’s just not going to solve the debt issues in their life. It’s not gonna solve all these other things. So maybe these other benefits these other financial wellness benefits, actually, we’ll get a little closer to helping them make decisions with some one on one conversations.
Dr.Bethany Fishbein: I really like that and had no idea that existed. So that’s good, thank you. So let’s get into the really murky waters here before I finished because I feel like it’s happened to a lot of practice owners who I know we talked in the beginning about lost productivity due to financial stress and it happens right you come into work, one of your staff members is crying What happened, something happened with their car and it’s going to need a repair and they can’t drive it until they get it and they don’t have the money to get it. They have a tooth that’s been hurting them and it’s really, really painful and the dentist tells them that they can have it fixed or they can have it extracted and they don’t have the money to have it fixed. Boss, is there anything you can do to help?
Evon Mendrin: Be careful here some of the things you had asked about? Do you adjust salary or wages for personal circumstances like this or do you do lend an employee money if they’re asking for it? I just think you gotta be really careful about that. I don’t think you should start applying these personal situations to setting a wage I think you let that be market wage based on their role and add whatever premium you want based on how much you value them to the practice or whether you just want to give above market wages. But as soon as you start adding in these very personal subjective factors into setting pay, the situation’s continue to come so do you continue to increase your wage for every situation? Do you do it for all your employees because now you’ve told your whole team while these subjective factors if something comes up in your life, you should ask for range? So it’s just a really slippery slope?
Dr.Bethany Fishbein: I’ll climb on that with you and say absolutely not like don’t do that. Even when somebody asks for a raise and has in their list of reasons. I moved further away and it’s a longer commute so I’m paying more in gas or now that we bought a house I need a higher salary. I will always say no, that’s not what salary is based on so I’m with you there. No raise. Do you loan money?
Evon Mendrin: I don’t think so. I sort of see this as like would you lend your family member or your friends money but worse, there’s a an employer and employee relationship that I don’t even know all of the sort of HR and employment law just everything else that goes into sort of this relationship. But if I’m just thinking about it, talking to a practice owner and I’m looking at it similarly to like, would you loan your family member or your friend of money? I think this is a step worse just because of that relationship between employer and employee and I think there’s a line that gets crossed as soon as you start lending them money. I think that’s a dangerous place to be unless there’s a family relationship outside of business, where that’s totally different, but I just don’t think you do that.
Dr.Bethany Fishbein: What about like a paycheck advance?
Evon Mendrin: I don’t know. That’s a good question. I don’t know that I have an answer to that. Are you willing to do that equally across the board for all employees every time this comes up? I don’t know, I have a hard time seeing that work over in the long term. I don’t know, what are your thoughts on that?
Dr.Bethany Fishbein: I don’t know that either that’s why we’re having this. I don’t know and its hard. I like your kind of barometer of are you willing to do this for everyone across the board because even having a question to stop and ask yourself? Is like, Ok? Am I willing to? I mean I don’t know, I don’t think we ever do pay check advances but if somebody needed a quarter of their paycheck to be automatically paid on the next check, would we do that? Ok, that doesn’t sound awful, right. Now all our employees are listening. Tomorrow I’m gonna get six emails but that sounds ok. It’s tricky right, I don’t know the right answer. I think it’s important to know. Number 1, you don’t have to so the answer can absolutely be no. I think when you equate it to lending to your friends and family. We’ve always said, if your lending to friends or family don’t lend anything you’re not willing to give up, like you lend it with the assumption that you won’t get it back. So, if you’re willing to do that, that barometer again is good, ‘cause I think alot of us are in situations where we have one employee where we would to that. They’ve worked with you a very long time, they have small children, you loaned them money once before and paid it back. And then you have employees you definitely wouldn’t do that. They just started two weeks ago, they started three months ago, they started two years ago but they’re not your favourite. You know? Who knows? So, yeah it’s a hard one but it comes up more than I think and I certainly know alot of practice owners who have made a personal loan to an employee with no expectation really of being paid back? They may or may not. And some of them feel great about that, and would do it again. And some of them regret that and would never do it. I don’t know that there’s a right answer. I was hoping you’d have one.
Evon Mendrin: I don’t have the right answer. Unfortunately, I’ve personally like I would be uncomfortable doing that. I feel like that’s the line that’s crossed in that relationship. That shouldn’t be but everyone’s different. That’s me personally, I don’t have the answer for that scenario. I think that’s a really tough place to be in as an employer plus the employee like if there’s a real need I mean, they have a financial need. There are ways to access 401k dollars. For example, one of the recent laws that passed that I just mentioned in 2024. They’re actually building in like an emergency fund feature in the 401K plan that allows them to get access to funds and you also can continue matching on those hours. So there’s additional ways now to get access to those dollars. That’s the first place I would direct them and say, Okay, here’s some ways you can access the funds available to you. That also assumes they’ve built up a balance to draw on. I don’t know, that’s a really tough one. I always think about what assumption are you setting now for the future for not only that team member, but also all the others? And can you do it equally across the board? And for some of these situations, like the pay raises and blending, how can you reasonably do it across the board equally? If you’re not just going to continue to say yes, I mean, are you really going to look at every situation in their life and sort of judge like, Is this a real need is not like that’s just a tough spot to put yourself in? A tough place to put that relationship between you and your team? So I don’t know. I don’t have an answer. It makes me uncomfortable. But I don’t know.
Dr.Bethany Fishbein: It’s absolutely an uncomfortable situation. I’ve been in this situation when it happens and it is uncomfortable all around. Like sometimes an employee’s asking for something that’s going to be a life-changing amount of money to them. That isn’t a life-changing amount of money to you as a practice owner. So it’s hard right when somebody you care about is suffering and you could relieve their stress. But as you said, there’s always another situation. And I think the other thing that it changes in the relationship is now once you’re at the point where you’re involved to that degree with somebody’s money, then you’re suddenly invested in their financial decisions, which as an employer, you shouldn’t be you pay them and what they do with it is up to them and you can think what you want about it, but it doesn’t affect you. If you are in a position you do end up loaning money to an employee and then the employee comes in bragging about having spent that money on something that you wouldn’t have chosen to spend it on. Like, look, I got a new tattoo, and you owe me $500 And you spend $200 on a tattoo. Like you can’t be involved with their day-to-day stuff to that level.
Evon Mendrin: It’s the same thing that happens if you’re lending money to a friend or family. Now you’re looking at their financial decision saying wait a minute, you’re talking about you can’t pay me the money back but I see how you’re spending your money here. What’s going on. So it really causes a weird strain on a relationship that unless you’re willing to let it go entirely in the you are gifting them in your mind gifting them dollars. It’s a weird spot that I just think can be avoided altogether.
Dr.Bethany Fishbein: I think that’s an appropriate ending sentence here, Evon so thank you so much for just sharing the conversation about what can really be an uncomfortable topic to think about and to be involved in and I asked you to do this because of your general comfort in uncomfortable money topics. So you’ve succeeded here. Thank you. Thank you so much. If a practice owner wants to reach you for some wisdom on how to acquire and maintain their own wealth, where do they find you?
Evon Mendrin: Yeah, you can check out my website www.optometrywealth.com. I’m on LinkedIn. If you’re on LinkedIn, you can listen to my podcast as well. The Optometry Money Podcast. Bethany, you’ve been a guest on my podcast a couple times now so you can find me at all those places.
Dr.Bethany Fishbein: Awesome. And for more information on power practice so that you have somebody to reach out to when you have these uncomfortable staff situations. You don’t know what to do it. You can find us at www.powerpractice.com Thank you so much for listening.
Read the Transcription
Evon Mendrin: If there as behavioral things, or like you talked about, like mindsets learned throughout their lives about how to handle their money, your 401k is not going to solve how one of your team members decides to spend their money at home. It’s just not going to solve the debt issues in their life. It’s not going to solve all these other things. So maybe these other benefits these other financial wellness benefits, actually we’ll get a little closer to helping them make decisions with some one on one conversations.
Dr.Bethany Fishbein: Welcome back to the Power Hour Optometry Podcast. I am Bethany Fishbein, the CEO of the Power Practice and host of this podcast and my guest is a repeat visitor on the podcast. I’m excited to be talking to Evon Mendrin. He’s a Certified Financial Planner and founder of Optometry Wealth Advisors. Evon, thank you for coming back.
Evon Mendrin: Thank you for inviting me back. Once again. I’m always excited to talk with you Bethany. So I’m excited to be here.
Dr.Bethany Fishbein: Well, so the topic is a little bit different, today. It’s not so much about optometrists managing their own money, but I wanted to talk about some of the situations that come up. When a practice owner staff is having issues or problems with money. Because we get these calls periodically of a staff member is asking for a loan, a staff member asking for an advance on their paycheck. Staff members in a really tight financial situation and I’m thinking about helping them out. And nobody really knows what to do with those. So I’m hoping we can just talk through some situations and hear your thoughts on a few things and have conversation that makes us both think as our conversations usually do.
Evon Mendrin: Yeah, I think this is a great topic, sort of a mix of financial planning decision making and HR and sort of blurring the lines of what’s appropriate between an employer and an employee and all these different areas of thought, sort of come together here and you and I were talking just before we started recording of why should practice owners think about the I guess we can call the financial wellness of an employee. Why should that be on the minds of the practice owners? And I think if we step back and sort of think about the real issue, and I think what we every business owner needs to keep in mind is that financial wellness is important from an employee’s perspective because of how financial stress could creep into the workplace. For an example, as an example, the American Psychological Association puts out this stress in America report I think every year and their research shows that money decisions and just financial stress has been one of the top two sources of stress in America for several years now, even through a pandemic and two presidential campaigns. Right. So, finances have been among the top one or two sources of stress, at least in America according to their research. And you can find all kinds of reports about how that financial stress gets into the workplace and how that impacts businesses. SHERM, which is the Society of Human Resource managers. They referenced this as a 2016 report. So it’s a little bit old, but they referenced a survey report that was done that said, four to five employers so I think it’s about 80% of employers. reported that financial stress is lowering their employees performance level. And they have sort of an estimates in there about how many dollars that’s costing the business. So on the one hand, there is just a human element like we want to see other humans around us, make good decisions and be well and not stressed but at a very minimum, every practice owner does want to keep in mind that I’m sure you’d want to see your employees come into your practice and work productively for your practice and to be fulfilled in the role. And so we have to sort of acknowledge so that your team is giving the best effort it can. For your practice, we do need to sort of acknowledged that financial wellness is important just like physical wellness or mental wellness. Financial wellness is an important part as well.
Dr.Bethany Fishbein: And I have to be honest, as you say that, that makes me feel a sense of relief. Not that it exists and not that this stress is out there. I’m not relieved about that. But I think when these things have come up for me and my own practice, it’s always personal. Am I a good enough boss? Am I good enough friend, could I do this for someone who I care about? Could do this for somebody I care about but just at a work level? And it’s always been the personal side. That’s in my mind when these questions come up. And I feel that when clients bring up but to acknowledge that it absolutely is a work productivity issue, and when we can help a work productivity issue, it’s in our benefit to do it makes me feel like okay, maybe it’s not just that I’m a wuss maybe I’ve been trying to improve productivity all this time. And that’s why we’re having these talks.
Evon Mendrin: Again, there is the human element like I’m sure you know, if you’re listening, you may be someone who just wants to see your team make good decisions, but even if you don’t feel like it’s your responsibility to step into that role and get involved in their lives. At a minimum as the owner of your practice, you do want to see that your team which is maybe the most valuable investment in your practice, is operating as best as it can and I know for me both as an employee in the past and now being self employed owning the business. Whenever I’ve been very stressed about something outside of work, it has impacted the way I’ve showed up to work each and every day and my focus at work so you have to keep that in mind regardless of what your motivation is for wondering about this and thinking about it. You have to keep that in mind because it can absolutely impact productivity in the workplace.
Dr.Bethany Fishbein: So Evon, you said before the word responsibility and what’s our responsibility to an employee as practice owners and I mean, just to make it clear from the get-go, really, our responsibility is to pay them the salary we agreed upon for hours worked. That’s it, right?
Evon Mendrin: I agree. And I do want to say like, I’m not an HR specialist, like there’s HR specialists and leadership specialists and you know, there’s a whole world of specialties that go into this that talk about, you know, what makes a good workplace, what makes a good culture? Where are the responsibilities of the employer start and end? I don’t have all the answers from that perspective, but just thinking about it. If I were to talk with a practice owner and just having a conversation with them about it, I don’t think you as a practice owner have the responsibility to step in and directly guide your employees what to do with their money. I think you should provide them a market-based wage for the work they do and a living wage based on their roles and provide a workplace of course a culture that is fulfilling to them and they can go into each and every day. But I don’t think you need to think about or feel the pressure of having this responsibility beyond that. I also don’t think you want to put yourself in a position where you’re giving financial advice to your employees. I just don’t think you want to put yourself in that position where you’re making money decisions for them or putting yourself in a spot where you’re responsible for decisions that they make. I just don’t think you want to put yourself in that position. But in the business, you can give them tools and resources so that they can make good decisions for themselves. And you can build in incentives and education to help them do that. And I think that’s really where your strengths as a business owner can really come in. It’s one thing if you see one of your employees getting taken advantage of clearly and maybe that’s where you might step in and just politely give your thoughts. I don’t really think you want to step into that role of directly advising someone on how they should handle their money. And that’s assuming they’re asking for it, And if they’re asking for it? I just don’t think someone will want advice unless they’re seeking it and or maybe they just don’t want to hear from me, but I think it’s about the tools that you can provide that help them make good decisions and then the incentives you could build in using those tools and it’s really those are the benefits you provide in the business.
Dr.Bethany Fishbein: So let’s talk about some of those. I mean, obviously, paying a salary is number one, and one of the things that we talk about when we talk about culture and creating positive culture is that once you set that salary and expectation, that’s really not something as a practice owner that you should mess with. Like if you have somebody making a certain wage expecting to work 40 hours a week. Sometimes we get questions like Well, I’m not going to be here that day. So I’m going to tell staff we’re closed that day. You can’t do I mean, you can but you shouldn’t do that. It’s not good culture to start changing around how many hours somebody is going to have from what they’ve been promised. But in addition to just paying them what are some of the other tools or things that you can give that set them up for some financial success.
Evon Mendrin: The core benefits that you are going to hear a lot about are really where you’re going to start and this is the retirement benefits and something healthcare related to big stresses on everyone’s life is well do they earn enough money to pay their bills, but then it’s future retirement security, and it’s paying for health care expenses. So providing a retirement plan in the practice I think is important not only for the practice owner that’s a huge planning tool for the practice owner but for the team as well. And so you have your simple IRAs or the 401k. And you can build in incentives into these plans to encourage your employees to partake to get them to use the tool for their own benefit. For example, you can build in a match so that’s if the employee puts in X percent of their own income, you’re matching dollar for dollar up to a certain point, you’re incentivizing them to say hey, if you participate, we’re going to give you extra dollars like this is part of your compensation that you can earn by using the plan. You can also build in different things like different behavioral nudges. So for example, you can do things like auto-enrollment, which is as soon as an employee is eligible, they’ll be automatically enrolled in the plan. And they’ll have to make a decision to opt out of it, instead of them having to make a decision to opt into it and start using that they’re automatically enrolled in the plan. And so there’s these behavioral tools you can use to sort of nudge them and just use our natural inertia to get them into the plan and assuming that they can actually afford it from a cash flow perspective and you’ve got a good default investment option there. That can be a good way to do that. There’s also things like auto escalate, which is a feature in a 401k that will automatically increase their contributions each year. So there’s these tools and incentives you can build into the plan.
Dr.Bethany Fishbein: You’re talking about this and I’m writing this in my little notebook here because it’s one of those things that’s so stupidly brilliant. Like somebody says something and you’re like, oh yeah duh, it’s kind of one of those because we have a simple IRA in the practice. And every year we talk with the new team members who are eligible and we show them compound interest. And if you save this and you know if you put in $50 It’s like we give you $50 Like the match and it’s free money, and inevitably somebody doesn’t do it. And then the following year, wow, you never signed up last year. I meant to I just didn’t get around to it. And it’s like, Agh!, so I liked the idea, right? When you hit the threshold of eligibility, you will be automatically enrolled and can you say you’ll be automatically enrolled and 3% of your salary will be put in?
Evon Mendrin: There’s a certain that I have to review what it is now there’s a certain percentage at which you can auto-enroll them. You do want to have a good default investment. So something that makes sense so they’re not sitting in cash, and you do need to make sure they’re aware of it, but we’re often our own worst enemies, right? Our own behavior is often the thing that keeps us from doing things we need to do. Sometimes just the fact that you need to use an extra piece of paperwork to sign up for the simple IRA plan can keep someone from doing that for years. And you can keep saying oh, I meant to I meant to well, in the 401k you can build in some of these features to sort of nudge you to do that. And that inertia will just keep you in it because it’s more difficult to opt out of it than it is to just stay in it. And there’s a book I think it’s called nudge. Actually, I think it’s Richard Thaler is the author. I’ll have to confirm that. But the whole book is about behavioral nudges, how we create rules and incentives to sort of overcome our own behavioral deficiencies like how do we create rules against ourselves to do some of these things? And that sort of research is where these bells and whistles came from is, humans are going to use inertia for good or for bad and unless it’s really easy to make a decision. Sometimes we’ll keep doing something that’s not in our best interest. Simply because it’s easier.
Dr.Bethany Fishbein: Once that change is made. It doesn’t take long before you start to see this snowball of the positive results. Like we’ve had people that just they did the paper they signed up and months later they can’t believe that they have this money because they’re not accustomed to saving or they don’t have a plan to do that. And with the match their money is immediately doubled. So regardless of what happens with the investment, it’s it’s a lot. They put in 30 they have 60 The next payroll they put in 30 More they have 120 to them, they’ve only put in quote $30 They did it twice, but like 30 turned into 120 it feels like magic once it starts, but this is one where it come up actually I agree with what you said. You can take on the responsibility of making financial recommendations for your employees because you might follow stocks, you might be putting your own money into something but you don’t know. And you never want to be in a position where all of a sudden they have less money and it’s your fault, that can happen. So once they’re putting in is it typical? Like I think our plan has advisors or it has like age banded, we’ll put you in this and we’re happy to speak to you if you want to do something else is that traditionally how it’s done.
Evon Mendrin: I think if you want like a default option, that’s if someone’s going to be for example automatically opted in and you want something that they’re going to automatically be invested in that’s suitable for their needs. And so like you mentioned, there’s often these target date retirement funds like I said, like the look at what year specifically like what year you may retire, it’ll select a mix of different investments like stocks and bonds, maybe even some real estate that’s generally appropriate for that timeline between where you’re at now, and until that year you’ll retire. And then over time, it will get more and more conservative meaning it’ll own less and less stocks and it’ll own more and more bonds. So that can be really an employee doesn’t know what else to do and they need somewhere to start. That can be a place they can start because it’s going to do a lot of that work and thought for them. And as they learn more if they want to learn more or if they have guidance from a good advisor or rep on the plan, then they can start to make other decisions for themselves. But I think what you mentioned too is having a good partner like having a good rep on the plan or having a good advisor on the plan. A good third party administrator if you have a 401 K, like they’ll provide that at least annual education for the employees. They’ll should be available to answer questions like that’s valuable if it’s someone that’s good and can really articulate the value of that really well. That’s available to answer questions, even if it’s one on one or by email like that is a valuable part of using a plan as well.
Dr.Bethany Fishbein: There’s benefits to the staff person and having this set up and having that person comes they provide that education and they’re treating them as an investor because they are an investor and so it starts to change their perception a little bit. And then obviously there’s also great benefits the practice and practice owner of doing something like that. So that’s a good one. The other big thing that you mentioned or talk to is some providing health coverage. Talk more about that.
Evon Mendrin: Yeah, well, first I want to go back and say there was a recent law passed in December called the secure Act basically 2.0 and there are a whole bunch of changes, good enhancements to SIMPLE IRAs and 401k. So just talk with your people involved in your plan and say, Hey, am I taking advantage of all the tools I need to the bells and whistles? I need to take advantage of this plan. So that’s just a good invitation to do that. But yeah, healthcare, what do you do about healthcare and it depends on each practice what they want to do, especially with small businesses, you know, it depends on who’s actually going to want to be involved in a health care plan, versus who has coverage with their spouses. It gets a little tricky with smaller businesses to figure out what to do with healthcare because it can be really expensive, or you may have most your employees just wouldn’t participate because they have coverage elsewhere. I think what you should explore, depending on what your employees want is should you have a health care plan, a group health care plan and you can work with a good broker to figure that out and run the math there but you can also do things that are more reimbursement plans, healthcare reimbursement plans. It’s an arrangement where you don’t necessarily need to take on the full health care plan and the practice, you can allow your employees and yourself to have your own coverage, but you can reimburse them for health care expenses, premiums, out of pocket expenses, different things like that. One of them is called a QSEHRA. I think Google will be your friend there and tell you more about that. But that’s basically an arrangement where you are for your employees. This is not something the owner can take advantage of, I don’t believe but for your employees, you can reimburse them up to a certain dollar amount each and every year for individual or for a family. They have to have a certain level of health care coverage. But this is something that will allow you to and it’s not going to be taxable income to them. So this is something that will allow you to at least provide some sort of financial support with healthcare costs. And you don’t have to take on that full responsibility of doing the health care plan in the practice. There’s other options like that. I think you can get a little bit creative. Or you can just provide an extra stipend or extra bonus amount, but healthcare is important. I don’t know that there’s any easy solution for smaller businesses, just because of the cost. It’s so expensive, but there are other types of creative options out there that don’t really require a huge administrative responsibility on your part.
Dr.Bethany Fishbein: What about other insurances? I know we get solicited periodically by vendors of insurance companies that will provide a small life insurance coverage for funeral expenses. If you get cancer we’ll give you this amount of money like I don’t know what the name for that kind of coverage is, but they always want you to buy that for your employees or to talk to your employees. Let them buy that for themselves. Is that something people do?
Evon Mendrin: Yeah, it’s like this supplemental insurance coverage basically, it’s like Aflac. I mean, basically, it like fills in gaps of other insurance coverage, right. And were very specific cases. In general, it should be the among the lowest priority in terms of like what type of insurance coverages either you or a staff member should look at the big three I think are most important healthcare, a life insurance, and then Long Term Disability Insurance. Those are going to be the actual biggest risks in someone’s life. And I think that’s where insurance makes the most sense. There’s nothing necessarily wrong once you’ve gotten those covered as best as possible. There’s nothing necessarily wrong with purchasing these other policies, this supplemental type stuff, but I think a lot of times I would prefer some of that type of coverage to be dealt with savings like those are some risks or expenses that you can sort of plan for by just building an appropriate emergency fund and paying with that out of savings. And that’s the same with like, I sort of think about those in the same way think about like insuring your phone or extended warranties on a car like there’s these coverages that, yeah, maybe there’s nothing wrong with buying them. It may or may not make sense depending on what each thing is covering. Like you need to really look specifically at what’s being covered. Compare the potential cost versus the premium, but I think a lot of times with some of these things, it’s just you’re almost better off to saving the money yourself building an appropriate emergency fund, and then just allowing yourself to cover it when it comes up. Maybe if there’s no emergency fund maybe if there’s no cash available in someone’s life, maybe these things will sort of be like that bridge to get you there until you have that but I would rather see a lot of times savings sort of take over that risk.
Dr.Bethany Fishbein:
So it starts to get a little bit tricky though. And you and I have had several really interesting conversations around mindset and just how people think about things and you’re saying this and it makes perfect sense to me, right? Yeah. Okay, so the money that you would put into the insurance or the warranty, as long as only one person in our family of four loses or breaks their phone each year. If I just save that money we’ll come out ahead. But I think the mindset of a lot of our staff members is really quite different. Where a monthly expense makes sense, where a monthly savings of the same amount doesn’t make sense or is always going to get pulled into something else. So talk a little bit about how you start to teach somebody or educate somebody towards that savings mindset, assuming they’ve got a little bit of road to be able to do so. And I know that for many families, that’s not an assumption you can just make but for many families it is.
Evon Mendrin: Yeah, that’s a big assumption, right? Do you actually have the cash to put towards something else besides just covering expenses? That’s a tough topic because I don’t know that there is one answer to it, where a lot of my conversations start and I gotta say all of my conversations are with optometrists or other professionals that do have the extra cash flow, right. So a lot of times I’m not necessarily having conversations with staff members that have a totally different financial situation but a lot of the cashflow conversations start with just clarity of look,, okay, you know, where is your money actually going, but then talking through like what is actually important to you? What is valuable to you is providing for college costs for kids valuable to you is saving for your future valuable to you, whatever it is, what is actually valuable to you in your life? And then is where your money going line up with that? And if not, what can we do to change that? Can we give your dollars a job in order to sort of benchmark it or set it aside for very specific stuff. So I think a lot of it is just comes down to clarity around where your money’s going. A lot of people just don’t know. They don’t know what they’re spending they don’t know what they need to spend. They don’t know what is valuable to them or they want their money to go or do for them. And seeing okay is where your money going now does it align with that stuff? I think a hard part for all of us is to think about your future self. I think a lot of times we’re thinking about what’s directly in front of us and not really thinking about the future. And so a lot of our money decisions really are just about what do we want or need right now. That’s another challenge too is how do you start to think about this future self like yourself in the future as this person and you need to decide whether you’re going to support yourself now or yourself in the future? And there’s been some interesting studies on how to do that. You know, for example, people who look at pictures of their older selves. Or have some sort of physical reminder of themselves in the future, tend to make better financial decisions. So maybe tying something physically to your future self like sort of put some flesh and muscle around it like it’s a real person. But that’s the challenge is how do you start to look at your future self as something that needs planning for and then start to balance in my spend money for today? Do I put money towards things today, versus what does myself in the future need? And how do I plan for that? That’s another challenge too.
Dr.Bethany Fishbein: those seem like super appropriate conversations to be having as a financial advisor, and maybe also as a parent. As an employer. It’s a little bit less clear. It’s tough, right? You see people and sometimes they will ask for an opinion, or maybe they’re just venting, but it’s a small office and you’re there. So you’re hearing it’s four days still till payday, and I only have $5 and an empty gas tank or you’re hearing it and maybe you’ve done some of this work to figure out how to help yourself in that situation. I know you said you only work with optometrists, we only work with optometrist too but I’ve seen some that don’t know this and don’t have positive cash flow situation like they have to learn it depending on what attitudes towards money were raised with. So sometimes it comes up in conversation I don’t think I can ever see a situation where he’d say all right employee. Let’s sit down and talk about your spending habits. Like that feels really inappropriate. But not even so much like your older self but I want to be able to take in vacation next year. We asked staff about their personal goals. And okay, would you mind some suggestions on maybe how to do that? I don’t know. It’s hard to imagine it starts to tread closer to that line of what it feels like you probably shouldn’t be saying sometimes. I don’t know.
Evon Mendrin: I agree. I always lean towards how do you take that responsibility or onus off of the practice owner, but provide the tools so that they can do that? One other thing I’ve seen come up which I think is really cool is actual financial wellness benefits or companies and so what those companies do is they will provide for your employees, educational articles and videos and webinars and classes around a whole range of financial topics. But then they’ll also provide like one on one financial coaching around cash flow around debt management, things like that. And then some of them will even provide one on one conversations with CFP certified financial planners and talking about retirement planning and even give like really basic projections and have an open forum to talk about all sorts of stuff. So I think that’s a really cool way to provide education. Okay, you provide the tools you provide the 401k you provide these benefits. You provide some information about it, but it’s another thing to then provide someone one on one to be able to talk to them about it and provide some sort of accountability and sort of explain how all this stuff applies to their life specifically, so that you as a practice owner, don’t have to. There’s several companies out there that are sort of providing this, some of them are built for larger employers, some of them will scale down to whatever business size you’re in and sort of build something for you. So maybe that’s a way for a practice owner, if that’s really concerned to sort of provide that guidance or at least ability for them to talk with someone one on one. I even know some of my peers, other financial advisors who are adding that as a service in their own businesses. So so that’s something to think about as well. If you want to sort of go down this rabbit hole of how do we provide more and more financial tools for our employees. That’s something to look at too besides just the benefits themselves because the benefits of the tool but if they’re not sure how to use them, if there’s behavioral things or like you talked about, like mindsets learn throughout their lives about how to handle their money, your 401k is not going to solve how one of your team members decides to spend their money at home. It’s just not going to solve the debt issues in their life. It’s not gonna solve all these other things. So maybe these other benefits these other financial wellness benefits, actually, we’ll get a little closer to helping them make decisions with some one on one conversations.
Dr.Bethany Fishbein: I really like that and had no idea that existed. So that’s good, thank you. So let’s get into the really murky waters here before I finished because I feel like it’s happened to a lot of practice owners who I know we talked in the beginning about lost productivity due to financial stress and it happens right you come into work, one of your staff members is crying What happened, something happened with their car and it’s going to need a repair and they can’t drive it until they get it and they don’t have the money to get it. They have a tooth that’s been hurting them and it’s really, really painful and the dentist tells them that they can have it fixed or they can have it extracted and they don’t have the money to have it fixed. Boss, is there anything you can do to help?
Evon Mendrin: Be careful here some of the things you had asked about? Do you adjust salary or wages for personal circumstances like this or do you do lend an employee money if they’re asking for it? I just think you gotta be really careful about that. I don’t think you should start applying these personal situations to setting a wage I think you let that be market wage based on their role and add whatever premium you want based on how much you value them to the practice or whether you just want to give above market wages. But as soon as you start adding in these very personal subjective factors into setting pay, the situation’s continue to come so do you continue to increase your wage for every situation? Do you do it for all your employees because now you’ve told your whole team while these subjective factors if something comes up in your life, you should ask for range? So it’s just a really slippery slope?
Dr.Bethany Fishbein: I’ll climb on that with you and say absolutely not like don’t do that. Even when somebody asks for a raise and has in their list of reasons. I moved further away and it’s a longer commute so I’m paying more in gas or now that we bought a house I need a higher salary. I will always say no, that’s not what salary is based on so I’m with you there. No raise. Do you loan money?
Evon Mendrin: I don’t think so. I sort of see this as like would you lend your family member or your friends money but worse, there’s a an employer and employee relationship that I don’t even know all of the sort of HR and employment law just everything else that goes into sort of this relationship. But if I’m just thinking about it, talking to a practice owner and I’m looking at it similarly to like, would you loan your family member or your friend of money? I think this is a step worse just because of that relationship between employer and employee and I think there’s a line that gets crossed as soon as you start lending them money. I think that’s a dangerous place to be unless there’s a family relationship outside of business, where that’s totally different, but I just don’t think you do that.
Dr.Bethany Fishbein: What about like a paycheck advance?
Evon Mendrin: I don’t know. That’s a good question. I don’t know that I have an answer to that. Are you willing to do that equally across the board for all employees every time this comes up? I don’t know, I have a hard time seeing that work over in the long term. I don’t know, what are your thoughts on that?
Dr.Bethany Fishbein: I don’t know that either that’s why we’re having this. I don’t know and its hard. I like your kind of barometer of are you willing to do this for everyone across the board because even having a question to stop and ask yourself? Is like, Ok? Am I willing to? I mean I don’t know, I don’t think we ever do pay check advances but if somebody needed a quarter of their paycheck to be automatically paid on the next check, would we do that? Ok, that doesn’t sound awful, right. Now all our employees are listening. Tomorrow I’m gonna get six emails but that sounds ok. It’s tricky right, I don’t know the right answer. I think it’s important to know. Number 1, you don’t have to so the answer can absolutely be no. I think when you equate it to lending to your friends and family. We’ve always said, if your lending to friends or family don’t lend anything you’re not willing to give up, like you lend it with the assumption that you won’t get it back. So, if you’re willing to do that, that barometer again is good, ‘cause I think alot of us are in situations where we have one employee where we would to that. They’ve worked with you a very long time, they have small children, you loaned them money once before and paid it back. And then you have employees you definitely wouldn’t do that. They just started two weeks ago, they started three months ago, they started two years ago but they’re not your favourite. You know? Who knows? So, yeah it’s a hard one but it comes up more than I think and I certainly know alot of practice owners who have made a personal loan to an employee with no expectation really of being paid back? They may or may not. And some of them feel great about that, and would do it again. And some of them regret that and would never do it. I don’t know that there’s a right answer. I was hoping you’d have one.
Evon Mendrin: I don’t have the right answer. Unfortunately, I’ve personally like I would be uncomfortable doing that. I feel like that’s the line that’s crossed in that relationship. That shouldn’t be but everyone’s different. That’s me personally, I don’t have the answer for that scenario. I think that’s a really tough place to be in as an employer plus the employee like if there’s a real need I mean, they have a financial need. There are ways to access 401k dollars. For example, one of the recent laws that passed that I just mentioned in 2024. They’re actually building in like an emergency fund feature in the 401K plan that allows them to get access to funds and you also can continue matching on those hours. So there’s additional ways now to get access to those dollars. That’s the first place I would direct them and say, Okay, here’s some ways you can access the funds available to you. That also assumes they’ve built up a balance to draw on. I don’t know, that’s a really tough one. I always think about what assumption are you setting now for the future for not only that team member, but also all the others? And can you do it equally across the board? And for some of these situations, like the pay raises and blending, how can you reasonably do it across the board equally? If you’re not just going to continue to say yes, I mean, are you really going to look at every situation in their life and sort of judge like, Is this a real need is not like that’s just a tough spot to put yourself in? A tough place to put that relationship between you and your team? So I don’t know. I don’t have an answer. It makes me uncomfortable. But I don’t know.
Dr.Bethany Fishbein: It’s absolutely an uncomfortable situation. I’ve been in this situation when it happens and it is uncomfortable all around. Like sometimes an employee’s asking for something that’s going to be a life-changing amount of money to them. That isn’t a life-changing amount of money to you as a practice owner. So it’s hard right when somebody you care about is suffering and you could relieve their stress. But as you said, there’s always another situation. And I think the other thing that it changes in the relationship is now once you’re at the point where you’re involved to that degree with somebody’s money, then you’re suddenly invested in their financial decisions, which as an employer, you shouldn’t be you pay them and what they do with it is up to them and you can think what you want about it, but it doesn’t affect you. If you are in a position you do end up loaning money to an employee and then the employee comes in bragging about having spent that money on something that you wouldn’t have chosen to spend it on. Like, look, I got a new tattoo, and you owe me $500 And you spend $200 on a tattoo. Like you can’t be involved with their day-to-day stuff to that level.
Evon Mendrin: It’s the same thing that happens if you’re lending money to a friend or family. Now you’re looking at their financial decision saying wait a minute, you’re talking about you can’t pay me the money back but I see how you’re spending your money here. What’s going on. So it really causes a weird strain on a relationship that unless you’re willing to let it go entirely in the you are gifting them in your mind gifting them dollars. It’s a weird spot that I just think can be avoided altogether.
Dr.Bethany Fishbein: I think that’s an appropriate ending sentence here, Evon so thank you so much for just sharing the conversation about what can really be an uncomfortable topic to think about and to be involved in and I asked you to do this because of your general comfort in uncomfortable money topics. So you’ve succeeded here. Thank you. Thank you so much. If a practice owner wants to reach you for some wisdom on how to acquire and maintain their own wealth, where do they find you?
Evon Mendrin: Yeah, you can check out my website www.optometrywealth.com. I’m on LinkedIn. If you’re on LinkedIn, you can listen to my podcast as well. The Optometry Money Podcast. Bethany, you’ve been a guest on my podcast a couple times now so you can find me at all those places.
Dr.Bethany Fishbein: Awesome. And for more information on power practice so that you have somebody to reach out to when you have these uncomfortable staff situations. You don’t know what to do it. You can find us at www.powerpractice.com Thank you so much for listening.