5 Money Mistakes Therapists Make (and How to Fix Them)

Being a therapist means you spend your days helping others untangle their thoughts, heal old wounds, and find healthier ways to move forward. But when it comes to managing money, even the most insightful therapists can end up making some costly mistakes in their own practices.

The good news? Once you spot the traps, you can fix them—without needing a Ph.D. in finance. Let’s walk through the five most common money mistakes therapists make (and the smart ways to avoid them).

1. Mixing Personal and Business Finances

The mistake:
You use the same bank account for groceries and client payments, or you’re swiping your business debit card for that Target run.

Why it matters:
It makes bookkeeping messy, taxes confusing, and can put you at risk if the IRS comes knocking.

The fix:
Open a dedicated business bank account and credit card. Keep all practice income and expenses separate. This way, you can see exactly what your practice earns, what it costs to run, and what’s left over for you to pay yourself.

2. Undervaluing Your Services

The mistake:
Setting fees too low because you’re worried clients won’t pay—or worse, you feel guilty charging what you’re worth.

Why it matters:
Low rates lead to burnout, financial stress, and resentment toward your work. And if you’re undercharging, you might be signaling to clients that your expertise isn’t valuable (when it absolutely is).

The fix:
Do a market analysis of other therapists in your area and set your fees accordingly. Build in regular fee reviews—annually at a minimum. Remember: fair pricing is not just about you making ends meet—it’s about sustainability so you can continue helping others.

3. Ignoring Taxes Until April

The mistake:
You wait until tax season to deal with your numbers, then panic when you see how much you owe.

Why it matters:
Therapists are typically self-employed, which means no employer is withholding taxes for you. That tax bill adds up—fast.

The fix:
Start setting aside 25–30% of your income into a separate “tax savings” account every time you get paid. Pay estimated quarterly taxes to the IRS. And don’t wait until April to figure it all out—schedule regular check-ins with your accountant to avoid surprises.

4. Not Tracking Expenses (and Missing Deductions)

The mistake:
You shove receipts into a drawer, forget about them, and then miss deductions like professional memberships, office supplies, continuing education, or even part of your phone bill.

Why it matters:
Every missed deduction means you’re paying more in taxes than you should.

The fix:
Use bookkeeping software (like QuickBooks or Wave) or hire a bookkeeper to track expenses monthly. Get into the habit of snapping pictures of receipts on the spot and categorizing them. Come tax time, you’ll thank yourself.

5. Skipping Retirement Planning

The mistake:
You’re focused on today’s clients and bills, but forget to plan for future-you.

Why it matters:
Without a retirement plan, you’ll always feel pressure to keep working—even when you want to slow down.

The fix:
Explore retirement options for self-employed therapists, like a SEP IRA, Solo 401(k), or SIMPLE IRA. Even small, consistent contributions will add up over time. And here’s the bonus: contributions often reduce your taxable income today.

Final Thoughts

Therapists spend so much time caring for others that their own financial health sometimes takes a backseat. But managing money wisely isn’t about greed—it’s about freedom. The freedom to run your practice without stress, to serve clients without burnout, and to build the future you deserve.

Start with one fix at a time, and before you know it, you’ll feel more confident in both your practice and your finances.