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Financial Planning for Therapists: A Guide

Not sure where to begin when it comes to money?

You're in the right place. 👋

One of the biggest challenges in personal finance is simply not knowing where to begin. This Guide will help you answer the question of what to do and where to begin for yourself.

Oh by the way, I should introduce myself (unless we've already met...). I'm Dave. I'm a financial planner and founder of Turning Point. You can read more about me here! But enough about me - this Guide is all about you!

Before we get going, bookmark this page!

I add new information all the time, and things in the financial world have a tendency of frequently changing. Don't blame me, call your congressperson!

If you've shared your email with me, I'll occasionally let you know what important elements of this Guide have been updated. And If you haven't shared your email with me and want to stay in the loop, by all means: please subscribe to my newsletter.

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Table of Contents

This page has some important introductory and overview information below. And I know some of you will want to jump straight into the nitty gritty, so let's start with the table of contents. 

After looking at this list, you might be wondering where you should begin. You're in luck! Where to Begin is what I cover in the section immediately below 👇 the table of contents.

The Guide to Financial Planning for Therapists

Click on the orange section headings to Navigate

Yikes. Where to Begin?! 🤔

I know... all this money and finance stuff tends to be overwhelming. And me throwing a lengthy table of contents at you probably isn't helping matters. 

I've tried my best to make this guide user friendly and non-overwhelming. But... it may still get overwhelming at times. Finances get overwhelming for me, too sometimes! So don't worry about it. 🙂

Let's start with a few key things which will lay a strong foundation for the rest of your financial plan. 

What's most important for you might vary a bit from what's most important to the next person, of course. However, in general, most personal finance folks agree on a few foundational steps.

But hold on... before we get to that foundation, there's something important I'd like you to read:

Standard Not Advice Disclaimer

Just a friendly reminder that none of the information included anywhere in this Guide is financial, legal or accounting advice. I don't know the specific financial circumstances of your life (or your private practice), so there's no way I can make blanket statements about what's right for you.

What I offer in this Guide is a suggestion on how you might think things through and then decide (for yourself) what's right. 

For some topics, I've also included what I've learned works well for most people. But you're not most people, you're you. You might be in that minority where the general suggestions are the wrong approach. 

Take everything said here (and anywhere else online) with a grain of salt, and seek out professional advice if you suspect you need it. Of course, I'm always happy to have a no cost introductory conversation with you to see if I can help.

I know this sounds like a legal CYA (that's cover your ass) statement. And yah, it is that. AND it's also an extension of loving kindness to you, the reader.

The way I cover my ass here is by making sure I don't encourage you to do anything that ends up causing you harm. I don't want that for you, and you don't want that for you. Take your time, think things through, be deliberate and seek out professional advice if you suspect you need it.

Whew. Ok, thanks for bearing with me. Now, let's return to our regularly scheduled broadcast...

What a Strong Foundation Looks Like

A strong foundation is one of those things that sounds sensible, right? But what the heck does it actually mean?

A strong foundation means starting with the things that matter most - and those that will make the biggest difference. 

I think of everyone's financial plan as having three phases: establishing a foundation, refining that foundation and finally optimizing the overall plan. 

This section highlights what the foundational pieces are - and the four steps to put that foundation in place. Click on each heading below for additional detail.

Once you've got these foundational pieces in place, you can begin refining - and even optimizing - the plan you've built. Just navigate back up to that Table of Contents when you're ready.

First: Emergency Fund

The most important first thing to do is to establish an emergency fund. It's nothing fancy, it's just having some cash saved up. Why is that important? Because if your income suddenly disappears we don't want you to panic. You can read all about the details on the Personal Balance Sheet Page.

Second: Mission Critical Risk Management

This step is all about making sure you have the most important insurance policies in place. Chances are you already have health insurance, auto insurance and home owner's insurance (if you own your home). If you rent, you might consider renter's insurance - mostly for the liability protection (but also to insure your belongings).

Those are all great policies to have. And the one last one we really need to consider is life insurance. Not everyone needs life insurance, but if you have children (or anyone else who depends on your income) life insurance is pretty much a must-have. Don't stress - it's fairly cheap. See the Risk Management & Insurance Page for an overview of buying term life insurance to meet your needs.

Oh, and one more thing for you parents out there. Take a quick skim of the Incapacity & Estate Planning Page. In the unlikely event you can't be there for your kids, let's get a basic incapacity & estate plan in place. It's not as overwhelming as it might sound. Just get the basics in place - even a very incomplete plan in this area is SO much better than no plan at all.

Third: Cash Flow

Next up is to understand your cash flow a bit better. This isn't about being super judgy about how you spend money or creating a suffocating budget. Instead, it's simply about bringing a bit more clarity to how money flows in and out of your life. 

If you're having trouble establishing an emergency fund (or paying for insurance), this is an even more important step. 

On the other hand, doing a bit of cash flow work might just reveal that you don't have much work to do in this area. And that you can confidently move on to other parts of your financial plan. 

You can learn about all the details and different ways you can approach cash flow work on the Personal Cash Flow Page

Fourth: Investing

The final foundational step is to begin investing the money you've saved. Investing doesn't need to be complicated. In fact, I believe strongly that it shouldn't be. It should be as simple as possible. 

And yet it is confusing. The Investing Page of this Guide will walk you through what type of investments you might consider. And the Personal Balance Sheet Page will help you decide where to house those investments (IRAs, 401(k)'s, ordinary taxable brokerage accounts, Roth accounts, 529 plans, HSA's...whew, there are a lot of options... but don't worry I'll break it down in an understandable way). 

The Balance Sheet Page will also help you consider where other assets might fit in your plan (for example buying a home).

How to Use this Guide

Hint: Don't try and get through it all in one sitting.

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Unless you've got a wicked case of insomnia. Then by all means, read away. 🥱

Even for me (a finance guy who LOVES learning about this stuff), I find most personal finance books hard to get through. It's just all too much and, honestly, too dry. I've tried to make this guide as entertaining as possible, but I suspect there are some areas where I've failed miserably. 🙈 Sorry about that. 

In any event, here are my suggestions for how to use this Guide. 

First, read about establishing a solid foundation above. Maybe you're already done that. If so, great! If you're raring to go, you can immediately start putting that foundation in place.

But if you're looking to do a bit more learning first, no worries. That's probably how I'd approach it as well. I like to really understand things before jumping into action. And sometimes that slows me down, but I digress...

To keep learning, I would briefly review each section outlined on the Table of Contents above. Don't dive into all the detail, just read some of the summary information. Understand just a bit of what's addressed in each section. 

From there, I'd suggest focusing on one topic at a time and then leaving the rest for later. (Have you bookmarked this page yet? You have? Ok, good.)

Over time as you learn more, and are ready to start implementing, focus on making balanced progress in each area, just a little bit at a time. And read the additional detail when you need it: when you're making a decision, when you're hunting for more information or when you're implementing a certain aspect of your plan.

Why Did I Create this Guide?

There is certainly no lack of personal financial advice out there. So why did I choose to add to the body of work?

Well, I have some problems with a lot of the personal finance content out there. First, lots of it is frankly terrible. And trying to determine what's good advice and what's garbage is difficult. Understanding financial advice is difficult enough as it is. You shouldn't have to first figure out if the advice is even worth understanding in the first place.

Second, the overwhelming amount of information out there is poorly organized and really not at all prioritized. It's all too easy to get into the weeds of the estate tax unlimited marital deduction before you know if that's something you even need to worry about. (Hint: unless you're a multi-millionaire, it isn't.)

And third, I haven't found much of any personal finance advice geared specifically toward therapists in private practice. What a glaring omission! The nerve of some people. 😤

The goal of this guide is to provide you financial guidance that will enable you to make your life better. I really believe all the education and guidance in these pages is thoughtful and solid. And I've done my best to prioritize and organize it in a way that isn't overwhelming... or at least is as non-overwhelming as I could make it. 

Whose opinions are these anyway?

I've included a lot of my own thoughts, and I've also included links to resources put out by other experts, including other financial planners. There is a lot of poor financial guidance out there, AND there are also a lot of wonderful people offering really great advice. I want to introduce you to as many of the quality folks out there as I can. 

Work In Progress 🚧

In other words, what did I miss?!

I’ve tried to be thoughtful about including answers to the most important financial questions on the minds of therapists. And yet this guide is certainly incomplete. I already have several topics I'd like to write about in further detail. 

I'll be adding additional content over time, which is why you should bookmark this page and come back every now and again. (You have booked marked the page, right?) And if you've been kind enough to share your email address with me, I'll let you know when there are updates. (And if you want to sign up for updates, please do!)

If you read something here and it leaves you wanting, let me know how I can make it better! And if there is something entirely absent and you'd like to learn about it, please let me know that as well! You can give me a shout here.

Always for fun and for free

As is always the case on my website, none of the links in this Guide are affiliate links. I've taken a fiduciary oath which means I never make money by selling you products or services. 

The only way I make money is through the money my clients choose to pay me. None of the resources here make me any money. I've listed them here because I truly believe they can be of use to you.

"That's cute, but what's the catch?" 🤨

Well, I do legit want to help the mental health community (because it's a community that's helped me so much). And offering this guide is one way for me to do that. 

AND I want to get the word out that I exist. 😬This Guide is part of my marketing plan. And I believe marketing is all about spreading hope! If no one knows about me and how I can help... well, I'm not creating much hope, am I?

You probably had to give me your email address to gain access to this page. (If you didn't that's totally fine too, you're more than welcome to poke around.) That exchange of email address for content makes this guide a lead magnet.

Huh? You, my friend, are a potential lead for me. You may become a client and wouldn't that be cool?! Or you may never become a client and that's ok, too. And I offered you something of value (e.g. this Guide) in exchange for a way for me to stay in contact with you (e.g. your precious email address). You might even consider using a lead magnet on your website; check out this article from Create My Therapist Website.

This is a rather over-the-top lead magnet. 🧲

At the risk of sounding slightly immodest, I believe most lead magnets don't contain nearly as much information as this one does. 

Why did I put so much work into it? Well, for one because I think it will truly help you. And for two, this content is a rough draft for online coursework I'm developing. Could I have kept this course-in-development hidden away? I mean, sure, but I figure why not share it? And lucky you for getting here early when everything was still free! Just imagine the stories you'll be able to tell your grandchildren! 👵

Let’s have some fun here!

I’m sure Dave Ramsey and Suze Orman are nice people deep down... but wow can they be a drag! So serious all the time... kinda shouty 🙉 ... not to mention all the shame and judgment. Major buzz kill.

No shame or judgment here tho! Well, ok, you are welcome to bring any shame or self-judgment you might be holding. But I won’t bring any judgment and will do my best not to add any shame.

And I will add that your shame and all the rest of your emotions are welcome! My role as a financial planner is not to resolve those emotional items head on (that’s the work of financial therapists). But I do make space for and normalize that these emotions show up when working with money! And why wouldn’t they? Money touches every aspect of our life, so emotions are bound to turn up sooner or later!

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Sharing is Caring! 🥰

If you find this Guide useful, I'd be super grateful if you shared it with colleagues in the mental health community (or anyone else for that matter). 

Just copy the link to this page and shoot off an email - or post it on social. You could even use carrier pigeon - I'm not picky. 🕊

And if you DON'T find this Guide useful, I'd love to hear why and make it better. Contact me here!

Finding a Financial Partner to Help Guide You

WHEW! If you've made it to the bottom of this page, congrats! We've covered a lot of ground. 

As you're digesting the information in this Guide, you might contemplate finding a partner to help guide you. If so, this section is for you.

If you're looking for a financial advisor, I strongly encourage you to interview at least three different candidates. I'd be honored to be one of them, but I can't be three different people. (I tried once; didn't go great.) 

You might be surprised to hear me suggest you interview multiple financial planners and not just me. People often are. And, yah, it's possible you might go find an advisor you like more than me. But that's ok. In fact, it's not just ok - it's the entire point.

Hiring a financial planner is a lot like hiring a therapist: one of the most important things (if not THE most important thing) is the fit and the relationship. Yes, your advisor must be smart, informed and qualified. An advisor needs those things to even be considered. But once those conditions are met, it's all about fit. The better you click with your advisor, the more progress you'll make. (And the more fun you'll have doing so.)

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With all that in mind, here are some resources to help you decide how to find a financial professional who's the right fit for you.

Real Personal Finance Podcast: What Questions Should I Ask When Hiring a Financial Planner?

Real Personal Finance Podcast: What to Look For When Selecting a Financial Advisor

The Certified Financial Planner Board of Standards has also developed 10 Questions to Ask Your Financial Advisor.

Click here to get started interviewing me! 🥳

Stay in the know!

If you aren't already getting emails from me, subscribe to receive word when I update this Guide. (Which I do on the regular!)

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