Money Mistakes Therapists Make & How to Cope
Today's blog post is a guest post from financial therapist, podcast host, speaker and author Lindsay Bryan-Podvin. Be sure and read to the end 👇 to learn more about Lindsay and what's she's putting out into the world!
As a therapist in private practice, you wear a lot of hats outside of clinician: biller, administrative associate, and marketer. You also are the CFO. A role that, as a financial therapist who works with clinicians in private practice, I see too many therapists avoid because engaging with money feels uncomfortable. In this post, I'll share common money mistakes for therapists in private practice, offer some insight on financial self-care, and share tips for coping with real or perceived money mistakes.
Common Money Mistakes for Therapists in Private Practice:
- DIYing. Tricking themselves into thinking they've saved money by DIYing things like billing, scheduling, and appointment reminders. I'll use myself as an example. When I started in private practice, I told myself I was "saving" money by billing manually and not upgrading my practice software to the version that included billing, something like $40 a month. It took me anywhere from 2-4 hours per week to do my billing manually. While I thought I was "saving" money, I was at best losing 8-16 hours a month to take care of myself, and at worse, losing 8-16 potential client sessions and income. At that time, I would have been losing between $1,080-$2,160 a month in lost client hours to "save" $40 a month.
- Undercharging. Setting a fee based on what others charge, based on what "feels" right, or based on what insurances reimburse is a recipe for undercharging. By creating a fee based on looking to others', clinicians miss out on charging a fee that makes their practice sustainable and prevents clinician burnout.
- Not taking care of their future selves. Neglecting to get things in place for their future such as not contributing to retirement, paying down debt, getting a will and trust in place, or avoiding improving their credit score.
Financial self-care is the act of including money as a core tenant in your self-care routine. Financial self-care affords us the ability to take care of our emotional, mental, and spiritual wellbeing. Practicing financial self-care can look like creating a practice of cultivating financial wellness. Financial wellness, to me, is feeling comfortable and confident understanding the ins and outs of your money. Like many other domains of our lives, how we think about money impacts how we feel about money and the actions or behaviors we take with our money. Benefits of practicing financial wellness include regularly engaging with your money, honoring how you feel when you earn, save, spend, or donate money, and decreased anxiety and tension around money.
Coping With Money Mistakes
Money mistakes happen to all of us. Learning how to cope with money mistakes--real or perceived--can help you cultivate financial resilience. First, acknowledge the mistake with compassion and humility. Second, make meaning of the mistake by acknowledging what you'll do differently. To use my billing example again, I would say, "It makes sense I thought it was better to DIY my billing to cut costs starting in my private practice. Now that I've looked at my finances, I can move forward with paying for the billing integration." Below, I've shared some tips on avoiding the three most common money mistakes therapists make in private practice.
- DIYing. Review how much money you are actually saving on DIYing. A virtual assistant can be an invaluable investment if you have administrative chores like an overflowing inbox or full voicemail. Bringing someone in for a few hours a week will give you back hours for yourself and your clients. Invest in software that will save you time or money in the long run. As I laid out before, spending a nominal fee for software that takes care of your billing and scheduling frees up your time to see more clients in a day, or better yet, to engage in downtime and hobbies so you can take care of yourself.
- Undercharging. Find a sustainable fee based on your unique financial needs and values. Take a look at how much money you need to be earning monthly and annually to cover your business and personal expenses, including things like healthcare, student loan payments, and retirement, and reverse-engineer your way to a sustainable fee. Charging a sustainable fee can provide you with the income you need to practice financial self-care. A sustainable fee can prevent you from the potential resentment of working with insurance companies that don't value you or working longer hours to try and make ends meet and burning out in the process.
- Not taking care of their future selves. Take time to sit down with your finances and practice financial life planning. Financial life planning (like the services provided at Turning Point Financial) helps you define essential elements required to lead a meaningful and fulfilled life. Creating a financial life plan ensures you dedicate financial resources to establishing a life aligned with your unique values. During financial life planning, you'll need to look at whether you have enough financial protection in the forms of substantial retirement contributions, life insurance coverage, and debt paydown. Sustainable life planning also includes making sure you have the time to engage in hobbies, downtime and donate or volunteer to causes important to you.
There you have it! A summary of common financial mistakes therapists make, an overview of financial self-care, and things to consider to help you avoid or course-correct for financial errors in private practice.
Lindsay Bryan-Podvin (she/her) is a biracial financial therapist, podcast host, speaker, and author of the book "The Financial Anxiety Solution." Her therapy practice, Mind Money Balance, uses shame-free financial therapy to help people get their minds and money in balance. She's expanded her services to help private practice therapists with their money mindset, sustainable pricing, and authentic marketing so they can include financial self-care in their work. She lives with her partner and their dog on the traditional land of the Fox, Peoria, Potawatomi, and Anishinabewaki peoples also known as Michigan. You can learn more about Lindsay on her website or by following her on Instagram @MindMoneyBalance.