Budgeting for Anxious Humans

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    Budgeting for the Costs of Starting Your Private Practice

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    Implement YNAB into your Private Practice with this easy to use checklist.

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      Starting a private practice and are terrified of how to budget for the costs? There are so many decisions to make: what EHR? Which Therapy profile? How do I manage my money? I recommend using YNAB for your private practice, and all of the templates I show you are within the application. Regardless, where do you start with figuring all the costs and making sure you have enough money?

      Figure out the Costs of Starting Your Private Practice

      To budget for the costs of starting a private practice, it’s best to figure at as many of the costs as possible. This is certainly tough to come up with on your own. There are hundreds of resources available to you. Start by finding the many people who sell courses on how to start a practice. They will probably have a free list of things to consider and tasks to complete

      Off the top of my head, here are the monthly costs & non-monthly costs that I’ve come across at least. a lot of these can be made into yearly costs as well by picking annual subscriptions

      Monthly Costs

      • Electronic Health Record/documentation & Scheduling Program
      • Rent/office
      • Therapy profiles/advertising

      Non-Monthly Costs

      • Legal Entity Start Up & Annual Filings
      • Taxes
      • Phone Number
      • Website
      • Malpractice Insurance
      • Licensed & Credentials
      • Continuing Education
      • MailBox (if you don’t have a physical address you can use that’s not your home)

      Pick Your Budgeting Method

      Budgeting for the costs of starting your private practice hinges on managing your money. So having a method that you can use to be confident in your spending is huge. There are many budgeting methods out there. Of them all, I highly recommend using a zero-based budget.

      Zero-based budgets only use the money you have in your bank account. If you don’t have one dedicated for your business, I also seriously suggest this too.

      a sample version of a YNAB Budget for private practices, sorting between monthly expenses and non-monthly expense.
      What YNAB (a zero-based budget) looks like

      Follow your Budgeting Method for your Private Practice

      With a zero-based budget, every time you earn money you put it into categories. If it helps, you can think of these categories as envelopes. As you spend, you use the money from the category that the transaction makes sense in. If you don’t have money in a category, then you either need to find it and take it from another category or not spend the money at all.

      This is the most effective way of budgeting for the costs and starting of private practice. Before you go out and make a big purchase, check your budget. Is there enough money? The answer helps you make a choice on the spending objectively.

      This is only the beginning for you, and I wish you the best! If you want to give a budgeting tool a try, check out my free guide to starting YNAB in your private practice, located in the sidebar. Or ask me a question by clicking on the “ask a question” in the menu.

      Picture of Tim Kelly, LCSW

      Tim Kelly, LCSW

      Tim is a private practice owner and passionate YNAB user who helps private practices spend confidently and pay themselves consistently using YNAB. You can schedule a free consultation to learn more or work together with him to change how you do money.