Many therapists struggle financially, whether they are in private practice or work as an employee. We may wish it were not the case, but money plays an important role in our lives. Few people are formally taught how to manage money. Those who take financial training are usually comfortable with the concept of money in the first place.
Transform your attitude toward money
The first step to improving your financial prospects is to transform your attitude toward money. 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. 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 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 about the supposed disparity in their wages versus the charged fee because they haven't factored in the business owner's costs 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 facilities cost.
Some therapists in private practice get defensive about their rates and make such statements as, "I'm worth that much!" 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.
Know where you stand financially
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. (See Issue 2's Online Resources at www.futureLMT.com for help constructing your 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 they spend it. 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.
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