You started as a therapist because you wanted to help people, but now you find most of your day is spent stressing about money.
There’s no quick fix to money worries, but as a therapist, it’s important not to let financial concerns affect your quality of work.
The best method to avoid stressing about money as a therapist is to keep a clear budget, and make time in your schedule for financial management.
It might also be time to consider raising your rates, or picking up passive income.
How To Not Stress About Money As A Therapist
There’s no easy way to avoid money worries when you’re working as a therapist, especially if you’re just starting out in a private practice.
However, there are methods to reduce money troubles, and staying on top of your finances is crucial to avoiding unnecessary stress.
Track Your Expenses
There can be a lot of hidden expenses in running your own practice, resulting in unexpected stress at the end of the month.
Essential expenses when running a practice include:
- Rent
- Electricity
- Insurance
- Broadband, Wi-Fi, and telephone
- Taxes
- Other bills: gas, water, etc.
These are the obvious details for any business, but they’re only part of the costs.
Other expenses include:
- Website hosting
- Marketing
- EHR software
- Bank fees
- Licensing costs
- Continuing education
Before you can start fixing your finances, you need a clear idea of just how much you’re spending.
When you start going over your finances, you might be surprised at just how many monthly expenses you overlooked.
Create A Budget
If you want to avoid stressing about money, then you have to spend time thinking about money. This isn’t a problem that can be placed on the back burner.
If you’re a therapist, especially if you’re running a private practice, you need to have a budget. Begin by taking a detailed overview of your ingoing and outgoings.
It helps to divide this up into two categories: fixed expenses, and variable expenses.
Fixed expenses are those that stay the same every month. Rent is likely to be fixed, and some of your bills, such as internet, might be fixed. These are easier to track. Variable expenses are those that change from month to month.
These can be necessary expenses, such as electricity, but some of them are discretionary. Start with the easy items, add the necessary costs, and then build your budget.
For variable expenses, look to your past spending and work out the averages.
Structure Your Payments
You’re probably used to emphasizing the importance of structure in a clients’ life. Structure is also necessary when it comes to paying bills and tracking finances.
If you want to avoid stress, you need to have a system in place for checking your incomings, outgoings, and take home pay. Set time once a month to look over your spending, and assess your finances.
If you’re only just starting out on a budget, check frequently—once a week should keep you in line.
Set up alerts and reminders for paying bills. If there’s an issue, try and deal with it there and then. If that isn’t possible, schedule a time at a future date, and set up an alert.
Reassess Your Pricing Structure
If you’ve been running your practice for a while, you see a consistent number of clients, and you’re still stressing about money every month, you probably need to reassess your pricing.
When starting a private practice, it’s easy to underestimate how much you need to charge per session.
You want to attract clients, so you decide to keep prices low. However, these prices might not accurately reflect the level of service you’re providing. Even if you can cover the bills at the practice, you might find you’re left with little take home money.
Reassess how much you’re currently charging, and calculate a potential price increase that would better support your practice.
Per client, you might be surprised at how small this increase is! It’s often necessary to introduce yearly price increases. Raising your rates will reflect your level of experience, and allow you to keep up with inflation.
And by changing your prices in small increments, it’s easier for the client to adjust. It might sound strange, but if you’re worrying about money, the best solution might be to take on fewer clients, but raise your prices.
With the extra time in your schedule, you can better track and control your budget, and stay on top of your finances.
You’ll also have more time to dedicate to potentially lucrative side hustles.
Consider Side Hustles
“Passive” income streams allow you to make money without doing direct and consistent work. It takes effort to get passive income streams up and running, but once they’re established, they can earn you a lot of extra income.
As a therapist, one of the best options for earning passive income is through publishing.
Writing a book based on your experience can be a method for earning money, increasing your audience, and building your reputation. Self publishing allows you to enter the market more quickly.
Another method is to start your own blog, vlog, or podcast. As with publishing, these methods can earn a consistent income while expanding your reach.
Alternatively, try submitting articles to magazines and blogs. Other side hustles and passive income streams include public speaking, workshops, and retreats.
Think outside the box: what are alternative ways to put your skills to use?
Pursue Teletherapy
Teletherapy has grown massively in recent years, and it’s an exciting new avenue for many practices. Teletherapy can be a way to cut down costs while adding another income stream.
Teletherapy can also be a way to boost client numbers, particularly if you’re struggling to find “in person” clients in the area.
As you don’t need the office space, teletherapy allows you to cut down on outgoings. If you already have an office, you can potentially rent out the space on days when you’re working from home.
Don’t Neglect Your Own Mental Well Being
Worrying about money can have a noticeable effect on your quality of work, which can, in turn, negatively impact your finances.
Schedule time once a month to properly go through and assess your financial situation.
By making finances a part of your routine, you can avoid things getting on top of you.
Final Thoughts
There are many rewards to running your own practice, but keeping on top of finances is rarely considered one of them.
If money is causing you stress, you need to reassess your spending and build a working budget.
It might be necessary to raise your rates, or pursue passive income streams.
