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Financial Process of Budgeting: Therapists, Counselors, and Private Practices

Financial Process of Budgeting for Therapists, Counselors, and Private Practices

Help! My Finances Are Giving Me Anxiety! I’m a licensed therapist with a small private practice. My goal has always been to help people manage their mental health, but recently, it feels like the only one needing help is… me! My finances are all over the place, and it’s causing me more anxiety than a patient running 30 minutes late for their session.

I barely have time to schedule patients, let alone sit down and figure out this “budgeting” thing everyone’s talking about. It sounds like some elusive magic trick, and I’m no Harry Potter! I know I should be managing my practice’s finances better, but I have no clue where to begin.

Can you break down this financial process of budgeting for a small practice owner like me? And please, keep it simple! Between my clients’ emotional rollercoasters and my chaotic bookkeeping, I don’t think I can handle any more stress.

Sincerely,


First off, take a deep breath! And I don’t mean a half-hearted sigh. I’m talking about a full-body, therapist-approved, deep-belly breath. In… and out. There, that’s better. Now, let’s talk money.

The financial process of budgeting, especially for therapists, counselors, and private practice owners, is one of the most crucial yet overlooked elements of running a successful practice. We’re taught about transference, countertransference, and CBT techniques, but budgeting? Not so much.

At its core, budgeting is simply understanding where your money is coming from and where it’s going. Think of it like a patient. They’ve got challenges (your expenses), strengths (your income), and long-term goals (financial freedom!). Your job, as both a therapist and a business owner, is to provide the tools (a budget) to manage these challenges effectively.

And don’t worry, you don’t need a fancy psychology degree for this part – just a little patience and some humor!

1. Start With Your Income – Don’t Be Afraid to Look at the Numbers!

I get it. The idea of looking at your income and expenses can feel like watching a horror movie – but I promise, it’s not that scary. First, take a peek at the income side of things.

  • What do you charge per session?
  • How many clients do you see in a week?
  • Are you getting paid consistently (hello, insurance claims)?

Once you’ve got a handle on what’s coming in, it’s time to look at what’s going out.

2. Expenses: Your Not-So-Silent Partner in Crime

Here’s where things can get a little trickier. Expenses for therapists can sneak up on you like an unresolved client trauma from childhood. There’s rent, utilities, software subscriptions, continuing education, and professional dues. Oh, and don’t forget about all the little things that add up, like snacks for the waiting room or that stress-relief candle collection you’ve been hoarding.

3. Plan for Recurring Expenses

Now, here’s a tip from your financial therapist (that’s me). Some expenses are predictable, like rent and payroll (if you have staff), and some are not. Those unexpected expenses, like repairing that leak in your office ceiling or having to replace a broken therapy chair, can throw off your budget in a big way. That’s why it’s essential to have a budget that takes both into account. And no, I’m not telling you to predict the future – I’m suggesting that you plan for the known while also leaving a little cushion for the unknown.

4. Cash Flow: Understanding What’s Coming In vs. What’s Going Out

Here’s where it gets real. Cash flow is the lifeblood of your business. It’s all about timing – ensuring that you have more money coming in than going out at any given time. If you’re bringing in a bunch of money from clients, but it’s not arriving until next month, and your rent is due next week, you’ve got a problem. This is where the magic word “budget” steps in to save the day.

When creating your budget, list out all your monthly recurring expenses and then figure out how much income you’ll need to cover them. If you’ve got surplus cash (yay, you!) that money should be allocated toward savings or, even better, paying down any debt you’ve got hanging around.

The financial process of budgeting helps you understand exactly what your financial situation looks like in black and white. When you’ve got a budget in place, you’re not flying blind anymore. You know exactly where your money is going and, more importantly, you can control it. No more guessing if you’ll have enough cash to pay for next month’s office rent or being surprised by a bill that you forgot was coming.

You got this…..I believe in you…

Sincerely,

An illustration of a plant growing out of a pot.


This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax and accounting situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. Healthy Bodies of Finance is an accounting firm that specializes in working with health and wellness providers. We provide monthly accounting & bookkeeping services and financial education. For more information on our specialized services for health and wellness providers please contact us at [email protected]