Growing a Practice

How to Overcome Financial Anxiety as a Therapist

March 10, 2024
November 6, 2022
Bryce Warnes
Content Writer

By opening your own therapy practice, you’ve become responsible not just for your personal income, but for the success of your business. 

Your clients’ needs, your reputation, and any funds you’ve invested in launching your practice are all tied up in the survival—and, hopefully, flourishing—of your private practice.

The good news is, the simplest steps you can take to relieve financial anxiety are also ones with the potential to improve how your private practice operates, and free up more time and energy for you to focus on your clients.

Here are eight steps you can take to tackle your financial anxiety head on.


1. Revisit your attitudes about money

As Lynn Grodzki notes in her book Building Your Ideal Private Practice, therapists who struggle with financial anxiety can be sorted into five categories, based on their attitudes about money.

Grodzki uses these categories to understand why therapists often undercharge for services, but they can apply to financial anxiety as a whole.

The attitudes are:

  • Shame
  • Anxiety
  • Obsession
  • Bewilderment
  • Fear

The boundaries between these categories aren’t always clear—some may overlap. But spend time now considering which one most applies to you, and take some notes.

Shame about money

You grew up in a household where no-one discussed money. If you asked your parents how much something cost, they might shush you or tell you it was rude to discuss. Explicitly or otherwise, money was considered a “dirty” topic. 

Today, you still feel ashamed to talk about money, whether that’s planning household expenses with a partner, splitting the bill at lunch, or discussing fees with clients. 

Anxiety about money

Growing up, your family was financially deprived—money was in short supply, and you were taught to be very careful with it. 

This may have instilled anxiety about every cent you spent, so that even today you worry about making minor purchases for your business. That makes it difficult to invest in your practice and your own wellbeing.

Obsession with money

When you were young, cash ruled everything around you. Not only were your family members comfortable openly discussing money, but it was the be-all and end-all; every activity was justified by its potential to earn or save money.

Today, you feel a powerful sense of reward when it comes to earning. You may be driven to work extra hours, pushing yourself beyond your mental, emotional, and physical limits in the pursuit of a bigger paycheck.

On the flip side, when you fail to earn, or when you don’t live up to your expectations as an earner, you may experience fear or shame.

Bewilderment about money

When they had money, your family spent it. When it was gone, everyone suffered. It was never made clear to you where money came from, or how someone might plan their spending and saving.

Even as an adult, money feels like a mystery to you. Sometimes there’s cash in your bank account, and you spend impulsively. Sometimes there isn’t, and you suffer as a result. When it comes to setting a budget or planning for the future, you don’t even know where to start.

Fear of money

Any time money was discussed when you were growing up, it was accompanied by family arguments, confusion, and worry about the future. Deep down, you still associate money with conflict and pain, and you do your best to avoid discussing it or even thinking about it.

Recognizing your deep-seated attitudes about money won’t magically disintegrate your mental blocks or lay your anxiety to rest. 

But, by simply seeing that the way you view money is subjective and (at least partly) shaped by forces in your past, you may find it easier to step back and more objectively view the obstacles and opportunities your business faces.

2. Embrace the abundance mindset

There are two ways to think of business expenses: with a scarcity mindset, and with an abundance mindset.

The scarcity mindset considers every expense your business pays a burden, and a potential catalyst for disaster. Money is a limited resource, this mindset says. The more you have to spend, the more vulnerable you become.

This attitude may be helpful if you’re trying to reign in reckless spending. But it takes its toll by making it easy to attach negative emotions to every cent you spend. As a result, you come to see your business as besieged by expenses, struggling to survive.

The abundance mindset sees every expense as an investment in your business. For instance, when the time comes to renew your business license for the year, you aren’t suffering a blow to your finances; you’re investing that money in staying open for business and continuing to grow. 

When you embrace the abundance mindset, you see the bigger picture, and may begin to associate more positive emotions with the day-to-day financial operations of your practice.


3. Set fair fees

When you set your fees too low, and pay yourself too little, you plant the seeds of resentment.

It becomes easy to resent your clients, the demands of your work, and every little obstacle that comes your way. Your struggle to make ends meet sets the tone for all your business dealings, and may make you feel undervalued, professionally and personally.

The solution is to set fees that allow you to feel you’re earning what you’re worth—that your time is valued—while ensuring your services remain accessible to clients. 

Check out our article on setting fees for your private practice for some useful tactics.

4. Make financial reports your friends

Businesses use three kinds of financial reports to track their money:

Profit and loss statements (P&Ls), which tell you how you spent money, how much you earned, and how much you kept as profit during a particular period. If you don’t receive quarterly and monthly P&Ls, there’s no way to tell how much profit you’re earning, or the factors (like expenses) that affect it. You’re always in the dark, wondering how much your next paycheck will be.

The balance sheet, which tells you your assets, liabilities, and equity as of a particular date. When you don’t have an up-to-date balance sheet, you don’t know how much money your business has—either in the bank, or tied up in other assets—and you don’t know how much you’re owed. It’s impossible to make informed plans for the future; you’re always flying by the seat of your pants.

Cash flow statements, which tell you how many of your assets and liabilities are cash, as opposed to money owed or money owing, respectively. Without cash flow statements tying everything together, your P&L and balance sheets may give you false impressions of your practice’s financial health; you can never be sure how much cash you have on hand to work with.

If you’re new to bookkeeping, these financial statements may seem intimidating. But they don’t require any complicated math, and they’re fairly easy to read, once you’ve seen a few examples.

Your financial reports may be generated by accounting software (if you decide to do your own bookkeeping), or delivered by your bookkeeper (or else a service like Heard.)

5. Get the pros on your side

Maybe you’re struggling to keep up with basic day-to-day bookkeeping, and dread the approach of tax season and all the extra paperwork it will bring.

Or maybe you’ve been improvising your finances as you go, and haven’t set up a bookkeeping system at all. In that case, you may have very little insight into how your business is performing, and worry constantly about disaster striking.

In either case, getting help from a professional bookkeeper and a professional accountant, both of whom are experienced with therapy practices, could save you a lot of emotional turmoil—and a lot of money, too.

FYI, Heard handles both bookkeeping and accounting exclusively for therapy practices.

Many therapists try to DIY their finances early on, because they’re concerned about spending money unnecessarily. 

But doing your own financial back office work eats up time and energy that is better spent working with current clients, or bringing new ones onboard. 

Think about it this way: If you spend five hours per week wrestling with accounting software or struggling through tax form fine print, that’s five hours per week you could spend seeing clients—and billing them for your time.

Even if it seems like a major expense right now, hiring a bookkeeper and accountant may save you money in the long run. Learn about the difference between bookkeepers and accountants, and how they can help your practice succeed.


6. Learn to love budgeting 

When you create a budget, you’re planning exactly how much you’ll earn and how much you’ll spend in a particular period. You’re also planning how you’ll earn that money, and how it will be spent. 

That may sound stressful. After all, if you’re planning to earn exactly X next month, and you fall short, doesn’t that make you a failure?

A small business that relies on one earner for revenue—like your solo therapy practice—is rarely precisely on budget. The important thing is that your budget gives you targets to aim for, and creates a map for where your business is going in the future—even if it’s only one month in the future.

Also, you can change your budget as you go, fine-tuning it, so get a clearer and clearer picture of what you can expect. Budgeting removes a lot of unknowns from running a business, so you spend less time lying awake at night, wondering how you’re going to afloat.

Do yourself a favor, and get familiar with how to create a budget for your therapy practice. Your bank account will thank you.

7. Consider a line of credit

If you haven’t already, talk to your bank about opening a line of credit for your business. Even a relatively small line of credit gives you a pressure relief valve in case of cash flow problems. 

For instance, if your payment processor is slow paying you out, or an unexpected expense pops up, you may find yourself short of the cash you need to pay office rent at the beginning of the month.

Without a line of credit, you may be forced to dip into your personal savings, to use an expensive cash advance from your business credit card, or to negotiate a late rent payment with your landlord.

A line of credit clears up the problem by giving you access to cash at a (relatively) low interest rate. Provided you pay back the difference promptly, it won’t cost you much—and it will save you from overstepping financial boundaries (using personal money to cover business expenses), incurring big credit card fees, or having an awkward conversation with your landlord.

A line of credit won’t eliminate all your financial stressors, but it gives you some wiggle room in case of an emergency—and that can go a long way towards reducing financial anxiety.

8. Accept impostor syndrome

As Dr. Marie Fang explains, one of the most important decisions she made as she adapted to running her own practice (and popular therapist education resource) was accepting impostor syndrome.

As you take the reins of your finances—hopefully, with help from a bookkeeper and accountant—and put in hard work to help your practice to succeed, you may feel underqualified or completely out of your depth.

Rather than trying to ignore this feeling, or (alternatively) letting it drag you down, accept that you have it—and that, if your business is successful, it probably isn’t going anywhere.

Impostor syndrome is a common experience for those of us to take on new, difficult roles and aspirations—whether that’s accepting a promotion at work, becoming a parent, learning to play piano, or launching our own therapy practice.

The sooner you can come to accept impostor syndrome as a necessary—albeit, sometimes uncomfortable—side effect of ambition, success, and new horizons, the sooner you’ll be at peace with running your own therapy practice..

Looking for support from a financial pro? Learn how to hire an accountant for your therapy practice.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

Bryce Warnes is a West Coast writer specializing in small business finances.


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