Money and the Therapist

Many therapists struggle financially, whether they are in private practice or work as an employee. The first step to improving your financial prospects is to transform your attitude toward money. A lot of people do not have a healthy relationship with money. We may wish it were not the case, but money plays an important role in our lives. Some people innately handle money well while others find it difficult to balance their checkbooks. Few people are taught how to manage money. The only formal training people receive happens if they take economics, finance, or accounting courses. Incidentally, most people taking those courses are the ones who are comfortable with the concept of money in the first place.

Consider the often inaccurately cited biblical quote, “Money is the root of all evil.” The original quote is, “For the love of money is the root of all evil.” Money is simply a method of exchange for goods and services. Originally, people traded one thing for another. Money evolved as a method to simplify that exchange. Money is not a mysterious entity. Unfortunately, we imbue it with emotional significance and other qualities because most of us do not understand how to relate to the concept of money or how to manage money in a rational way—and that is where trouble brews.

Many people in the helping professions proudly wear the “poor but pure” badge. Besides contributing to financial insecurity, this attitude often leads to questionable business practices. Many practitioners have trouble charging appropriate fees for their services and many are uncomfortable charging anything at all.

On the flip side, employees often become resentful over the supposed disparity in their wages versus the charged fee because they haven’t factored in the true costs the business owner incurred in setting up and running the business. They only look at the $80 the spa charges per massage and the $30 they receive. They forget about the thousands or even millions of dollars the facility cost. Some therapists in private practice get defensive about their rates and make statements such as, “I’m worth that much!” The paradox is that most often the people saying that are struggling. The sooner you learn that your worth has very little to do with what you charge, the happier you will be. Your fees can only hold up to what the market will bear. And frankly, most of your work is priceless. Yet, the majority of people have budgets.

The next step to fiscal freedom is to know where you stand financially. It’s so easy to be in denial about your finances. One of my key phrases is “Do the math!” Take the time to do a personal budget. Forecast your daily, monthly and annual expenses and plan accordingly. If you intend to be self-employed then you need to do similar estimating and forecasting for your business.

One of the biggest pitfalls I see people encounter is that whenever they get “extra” money (such as having a better than usual client load for the week) they go out and spend the extra cash. Before doing that, check your cash flow forecast as you might have a large one-time expense coming up soon. I also recommend that you put at least half of the money into a savings account. The key to financial success, as well as life, is balance.