Meet Christine Calhoun

[00:00:00] Christine: Potentially the conversation needs to start there, or the work needs to start there. I always kind of had a sense of it in terms of marketing and trying to get new clients, but I’m also starting to see that I’ve been using my hospital job as kind of like a buffer to prevent me from having to do this other hard work of maintaining my current clients.

[00:00:30] Linzy: Welcome to the Money Skills for Therapists podcast, where we answer this question. How can therapists and health practitioners go from money shame and confusion to feeling calm and confident about their finances and get money really working for them in both their private practice and their lives? I’m your host, Lindsay Bonham, therapist turned money coach and creator of the course Money Skills for Therapists.

[00:00:51] Hello and welcome back to the Money Skills for Therapists podcast. Today we have a coaching episode with listener Christine. We dig into this question that Christine has around leaving her full time job. How do you go about planning to leave a full time job that pays you well to move into private practice.

[00:01:09] Christine has a private practice on the side, but works full time, and today we get into the actual practical numbers of understanding what your private practice income is going to need to look like to replace your income. We dig into some parts that many of us have that come up, when it comes to thinking about building something new, parts that might not trust us to follow through or haven’t seen examples of successful entrepreneurship in our lives, so it’s hard to imagine that we could be living that.

[00:01:37] We also explore this piece of being basically overtaxed from your private practice when you do have this scenario of a full time job and private practice income about how you can end up paying really high taxes from your private practice that aren’t really about your private practice. They’re about your total income.

[00:01:53] So we spend some time digging into that, looking for ways to remove that pain and friction, not putting so much pressure on a private practice. So we cover a lot of ground today. There’s lots here, practically,

[00:02:04] And it is inevitable that I’m probably always going to ask, what part of you is that question? Just because the stories that we carry and the different parts of us internally that are there to keep us safe or that are carrying trauma, are inevitably part of these big decisions that seem like practical or professional decisions, but they’re really deeply personal decisions to make.

[00:02:23] Here is my coaching conversation with Christine.

[00:02:35] So, Christine, welcome to the podcast.

[00:02:37] Christine: Thanks so much for having me.

[00:02:39] Linzy: Yeah. Thank you for joining me. And we were talking a little bit off mic before we started recording that this question that you submitted, you actually submitted almost 11 months ago now. but it still is like a pertinent question, you know, coming into our conversation today, which to me also just tells me how long these things like hang out for us in our lives, these questions.

[00:02:58] So tell me about what you’re bringing into our coaching conversation today.

[00:03:02] Christine: Awesome. Thanks. Okay. So I have a full time job as a social worker in a hospital, and I have a small private practice that I’ve had for a couple of years, and I’ve been considering reducing my load at the hospital and picking up some more time in my private practice for increased flexibility, quality of life, all that stuff.

[00:03:24] Working in a medicine unit during COVID wasn’t easy. such a bolster for the mental health and quality of life in general. But I’m finding… I’m not really sure if I’m doing it right. Cause I’m not great with numbers, but I’m not really liking my experience with taxes.I’m just sort of unsure where to go from here, honestly.

[00:03:43] Linzy: Yeah. And when you say you’re not liking your experience with taxes, tell me what has been happening with taxes so far.

[00:03:48] Christine: Sure. So, in the past years of my private practice, I’ve always had enough money saved come tax time. and I’m in Ontario, Canada. So, I have to pay in installments now. And, I recognize that this is, like a very privileged position to be in, but I got taxed at a much higher tax bracket with my private practice income this past year.

[00:04:09] And now my installments are quite big. So it feels like I’m giving all of my private practice income to the CRA, Canadian IRS.

[00:04:18] So I’m just sort of wondering, I’m like, it doesn’t really seem to be like much advantage to carrying these two incomes, with my eventual goal to try to balance them out. I don’t know, maybe I’m just trying to do damage control for the tax man. I’m not sure.

[00:04:32] Linzy: Okay. And I will say that your installments are based on what you’ve made previously, right? So like, they’re projections, and they are just projections. So they’re guidelines from the CRA where they’re saying, okay, based on what you made last year, this is what we project you should owe us this year.

[00:04:49] But they can also be adjusted if your practice is looking different, right? So they should be in balance with what’s happening in your practice now. And if they’re not, you can always pay less, just to set that as the initial… That’s just the CRA giving you their best guess on what they think you’re going to owe them and breaking that into four pieces.

[00:05:06] I’m curious, how much are these quarterly tax installments?

[00:05:09] Christine: So last year they were like $1800 and the $900 respectively, but they’ll be forecasted to be, I think, $2550.

[00:05:20] Linzy: Okay. 2550 each time. So yeah. Okay. So 2550 times five is going to be 10, 200. And how much, as far as you know, are you bringing home from that private practice?

[00:05:39] Christine: That’s a good question. I would maybe say probably about that, maybe a little bit more.

[00:05:45] Linzy: Okay. So, from your experience with the numbers, it’s like you’re paying half of  what you’re making to taxes.

[00:05:51] Christine: Yeah, I think so. Now, I have to say, like, I’m pretty rudimentary with numbers. Math makes me squirrely. So, I’m not even actually sure. I’ve looked at my dashboard several times,

[00:06:01] Linzy: Yes. Because like that, I mean, first of all, I will say, if that was true, that like basically50 percent of everything you’re earning from the private practice you having to pay for taxes, that would suck. But I will tell you, based on knowing Ontario tax brackets, I don’t think that’s the case.

[00:06:17] So I think part of what we can start to look at here is like, how are your numbers actually working? What’s actually happening with your numbers? Why are these taxes feeling so high? You had mentioned that you have a spreadsheet that you can look at. So can you give me a sense of the numbers that you do know?

[00:06:33] Like what kind of numbers you have in front of you right now that we can dig into a little,

[00:06:36] Christine: Oh, I have so many numbers in front of me. My friend who’s an internal auditor made my spreadsheet.

[00:06:41] Linzy: Oh, that’s nice. Yes. Great.

[00:06:43] Christine: My accountant was the one who actually told me that I was taxed at 42 percent of my private practice income last year. So that’s kind of why I think half might be about right. And then my deductions hover , pretty traditionally over, but maybe between 11 and 13,000 per year.

[00:07:02] Linzy: Okay. Okay. 11 and 13,000. Your deductions being your…

[00:07:07] Christine: Like my expenses .

[00:07:08] Linzy: Oh, okay. Your operating expenses.

[00:07:10] Christine: Yeah. Sorry.

[00:07:11] Linzy: Yes. Okay. So 11,000 to 13,000 for your operating expenses. Okay. Okay. So what this tells me is that your private practice is moving you up into a higher tax bracket. So it’s not actually that your private practice money is being taxed at that higher rate, but because you’re being taxed at a lower rate than you should be from your paycheck, your regular salary, it’s set up in such a way that it’s being basically robbed from your private practice, right? Because you’re moving into a much higher tax bracket. Do you know which tax bracket you are in? Like, what is the range that you’re in? How much are you making at your hospital job?

[00:07:48] Christine: So last year I think I cleared just over a hundred thousand. So maybe like a hundred and three thousand.

[00:07:54] Linzy: Hundred and three thousand, let’s say. And then, with your private practice, how much are you, are you seeing coming home to you there? Like, before you pay taxes. I’m going to guess twenty thousand based on what you said earlier?

[00:08:06] Christine: Twenty two thousand. Yeah.

[00:08:08] Linzy: So what I’m hearing then is between your hospital income and your private practice income, your before tax income is $ 125,000, which is, to stop and pause for a second, pretty great.

[00:08:20] Like, what does that number mean to you when you think about making $125, 000 a year?

[00:08:25] Christine: It’s certainly more than I ever thought I would earn. I’m not a big person, wanting to achieve a certain number, but when I hear it, like considering my life, that’s a good amount of money. I also find this weird thing where I’m like, why don’t I have any then?

[00:08:41] Linzy: Right. Where’d it go?

[00:08:42] Christine: I know? Yeah.

[00:08:43] Linzy: Yes. Yes.

[00:08:44] Christine: Even though I do have some, I don’t know. I feel like I should be full of designer purses

[00:08:51] Linzy: Right. Yes. Which would have been true if you were earning 125, 000 a year in the 1980s. You’d be rich.

[00:08:59] Christine: Yeah.

[00:09:01] Linzy: But I mean, this is part of inflation, right? It’s like, I think these numbers, if I think about when I was a kid and I learned what my mom made, I was like, wow, my mom makes like a ton of money. which was again, kind of true in the nineties money, you know, our purchasing power goes down and down.

[00:09:15] So 125 is a great income, but it’s also not, it’s not designer purse income. Maybe one or two designer purses, but not all the designer purses.. So as we’re thinking then about your picture, like I’m curious, you’re talking about the hospital was not awesome for mental health going through COVID.

[00:09:34] I can’t imagine what that would have been like being in the hospital system during the pandemic. And, You’re thinking about starting to turn up your private practice. I’m hearing there’s this aversion because it feels like your private practice money just gets taxed like crazy. The first thing that I want to zoom out on is the fact that your overall money is getting taxed at a certain percentage. But because you’re not getting taxed at that percentage at the hospital, more has to be taken from your private practice. Right. , how would we say that’s more about how the money’s being arranged than actually that you’re being overtaxed.

[00:10:04] Christine: Right.

[00:10:05] Linzy: You’re allowed to have feelings about the amount of taxes you’re paying.

[00:10:07] That’s totally fair. but it’s not actually that you’re earning less than the private practice. It’s that you’re earning more overall and those taxes need to come from somewhere.

[00:10:14] Christine: Yeah.

[00:10:15] Linzy: And so one way of managing this that would make it feel a lot more even and would make it, in a way, more accurate is you can always ask to be taxed extra from your salary income, knowing like, okay, they’re taxing me at the 103,000 bracket, but I’m actually know I’m going to land at 125.

[00:10:34] So I’m going to ask them to put aside an extra. 200 bucks every paycheck, or 300 bucks, so that it’s like that job is actually starting to be taxed more accurately, which means your private practice is not being overtaxed to make up for it. What do you notice like thinking about that, trying to zoom out and putting these two incomes into a more of a big picture perspective?

[00:10:53] Christine: Yeah. I think my money avoidance definitely comes up there. I’ve, I’ve thought about doing that, and my accountant suggested that as well. When I think about how I do my monthly budget, I’m trying to imagine let’s say four to 600 less coming in of my like predictable paycheck money. And I kind of balk at that. I’m like, “Nah, I’ll just wait until April, but it seems like maybe that might actually be the best call.”

[00:11:18] Linzy: Well, what that would do is it evens out your tax burden, right? Rather than being kind of hit with these larger quarterly payments or having to pay extra tax time if you didn’t put enough aside, it means that there’s a little bit less coming in those regular paychecks from the hospital, but also your quarter lease can come down a little bit because now you’re contributing more that way.

[00:11:38] So in the end, the cash will actually look the same. You’ll actually end up with the same amount of cash at home. It’s just a little less will come from the hospital, and a little more will come from the private practice. but it shouldn’t actually change your budget because you’re not actually paying more taxes.

[00:11:53] You’re just paying your taxes in a different way. Lets you see how much is coming. Actually coming from your private practice? yeah. ’cause right now your private practice is being kind of knee capped, I will say.

[00:12:03] Christine: Yeah, that’s a good word for it. And like, I’m a social worker. So like, I’m a happily taxpaying citizen. I know taxes are good, but I’m also just like, damn, when I see it on paper at the end of the year, I’m like, why?

[00:12:15] Linzy: Ow.

[00:12:16] Christine: Yes, because I’m working, I feel, I’m working really hard, like, and burnout is a real thing, and it’s creeping.

[00:12:22] So when I think about all the time that I put into my private practice on top of a full time job, and then I see at the end of the year, I’m like, wow, damn, I gave so much of that money to the government. Like, I guess it’s just the way that I’m rationalizing it in my mind. I just don’t like the look of it.

[00:12:39] Linzy: No, of course not. And if, if I think about it in terms of an analogy, if we think about these two parts of your earning life, you know, your hospital income and your private practice income, if I was going to make them people with ages, which there’s lots of arguments not to do this, but let’s just like do this cause it’s simple.

[00:12:53] It’s like your hospital job is like an adult. It’s an adult that, has all the benefits, is like, you know, got all of the status, and your private practice is more like. I don’t know, like a seven year old, right? But the way that your system is set up right now is kind of like this seven year old, these earnings of like 3, 000 a month are being asked to make up for all these taxes that are really about the two of them combined.

[00:13:18] It’s really asking a lot of your private practice to carry the tax burden of your total income. And it really, as we said, like kneecaps it. And I think also doesn’t let you actually realize the positive impact of the private practice. Because it just seems like this thing that’s costing you money. It seems like that’s what the relationship has been recently.

[00:13:35] Christine: That’s a good way of putting it. Yeah.

[00:13:37] Linzy: Yeah, so that’s my first idea, which I’m hearing your accountant also had, yay accountant, is to spread out that tax burden so you can actually see all of this money together is contributing to these taxes, right? It’s not actually up to your private practice to pay 43 percent taxes, that’s crazy. If you had a private practice where you were making, I don’t know, 800, 000 a year, sure, that makes sense. It’s too much to ask from the seven year old.

[00:14:01] So let’s think about that first, of evening those things out. Then if we do that, if we move into the space where it’s like this private practice is not actually costing you 43 percent taxes, it’s probably actually more like 25 percent taxes, or 28 percent taxes, just like your hospital job. They’re both being taxed the same.

[00:14:20] Tell me about what you actually want your working life to look like. I’m hearing, thinking about moving more into private practice, more flexibility. What are you noticing you’re needing more of that your private practice could be giving you?

[00:14:35] Christine: I feel this need to say, like, in terms of a hospital job, like, I have a very good one, and I love where I work, and I love the people, but I think, medicine and critical care and that type of work is supersympathetic activation, and I can feel the toll that it’s taking.

[00:14:56] So what would be so ideal would be to be part time at the hospital where I can continue to be in the work that I actually do like, like some part of my system does really like that work. But then to also be able to nurture more of the clinical side where, you know, you actually get to meet with people for longer periods of time, get to help them, you know, with their issues and really dig in.

[00:15:19] And then, on the days that I’m working on my private practice, those would be, days where I wouldn’t be up before the sun, and I wouldn’t be home at nine o’clock, which would give me a lot more time for resting, and being social, and doing sports. That kind of stuff.

[00:15:35] Linzy: Yes. Yeah. living a life that you enjoy.

[00:15:37] Christine: Mm hmm. Yeah, basically.

[00:15:39] Linzy: Yeah.

[00:15:40] Christine: So, if we think about your options, cause I’m not sure what it looks like in your hospital job. Is there a halftime option? Could you go down to three days a week? What’s available?

[00:15:50] Yeah, unfortunately right now that’s not an option. And if it was I would take it.

[00:15:54] I should just say yeah right now that’s not an option, and I’m actually not sure if it’s ever going to be an option. So there is this part of me. That’s also sort of forecasting for the thought that I might actually have to one day resign if my, You know, my system needs me to,

[00:16:11] and what I want with my life changes enough that I feel like I have to, but then, you know, we’re in a different pool then.

[00:16:17] Linzy: Yes. Okay. Yes. Yes. So. I’m hearing right now there isn’t an easy transition you could start to make into a little more. You can’t dial it up and down at this moment. so it would be more like almost like an all or nothing of moving fully

[00:16:30] into private practice. Okay, is the possibility of a part time hospital job somewhere else something that would be good for your system?

[00:16:37] Or do you really think just moving fully into private practice would be the next logical move?

[00:16:42] Christine: There’s not a lot of like 0. 5 full time equivalents available in healthcare anymore. And also the type of unit you’re working on, like really does affect, you know, how much you enjoy the work. And so I don’t know that I would be super interested in a 0. 5 at a different hospital or in a different place. Yeah.

[00:16:59] Linzy: Okay. If we’re then thinking about full time private practice, it almost sounds to me like a part of you needs an escape plan just in case, like I’m hearing, allusions to burnout kind of creeping in, and noticing that. So for moving into private practice, what is feeling difficult or unclear right now about making a move like that?

[00:17:22] Christine: Well, thanks to my, EPIC spreadsheet, I can see how much money I would need to take home in full time private practice in order to, pay my expenses and then also match the, retirement savings and vacation with, that would match what the hospital provides. That really increases the amount of money one needs to take home per month.

[00:17:45] And there’s also this irrelevant, but not, not totally that my current living arrangement is remarkably affordable for the market and it is… I’m renting, right? So I may have to move and if I have to move, like we’re talking multiple thousands of dollars more a month.

[00:18:01] Linzy: Oh, I know. Yes.

[00:18:03] Linzy: I have seen that happen to people. Yes. Yes. Yeah. Okay.

[00:18:06] Christine: So I just, I guess I’m wondering like, do I need to save 50,000 before I can resign from my hospital job. That feels daunting. I’m not sure.

[00:18:16] Linzy: Yes. Yeah. And I think It is important to think about what you would need for a runway, right? There’s two pieces there. One is financially, what do you need for a runway, to make sure that you’re covered? And then the second thing is emotionally, what do you need for a runway?

[00:18:32] Right? Like how much money do you want to have on hand that will allow you to step out and not be totally wracked by anxiety, like up at night, not knowing if you’ve made a massive mistake, as you’re building a private practice. And what I’m hearing is you do have a practice already, so you have some clients. Do you find, is there more demand than you can accommodate right now in your private practice,

[00:18:53] or is it a pretty small, quiet private practice at this moment? What’s happening there?

[00:18:57] Christine: Yeah, I would say more, the second one. It ebbs and flows. I end up just booking people quite a ways out because physically I just don’t have a lot of appointments available in a week. it’s this tricky thing though where like physically I, and like practically and energetically I’m actually not really able to grow my practice much bigger than I currently have it.

 [00:19:16] And if I resign from the hospital, I would need to multiply it by so many.

[00:19:21] Linzy: Yes.

[00:19:22] Christine: Yeah, so I do feel sort of limited right now in terms of growth, marketing, actively pursuing clients, that might actually help me feel a little bit safer about potentially resigning.

[00:19:35] Linzy: Yes. Yeah. Cause it’s kind of like you, you can’t handle more clients right now, but you’re going to need a lot more clients. Yes. if you stepped out of this and, Okay, so let’s think about these two pieces then. The first is the runway. I’m calling it a runway, you know. It could also be an emergency fund, a buffer, you know, there’s lots of words that we could use for this.

[00:19:54] Do you have clarity? And I think you do. It sounds like you have some great spreadsheets there, on how much a month you need to live? Your living number, maybe not your thriving number, maybe not your going out a bunch number, but what is your minimum that you definitely need to have to pay your rent and pay for your life.

[00:20:09] Christine: Because of the way the world is, my spreadsheet just closed, but, so I would say, about 10, 000 would need to be available to me to spend, per month. but that is a little bit of a safety net in that if I had to move, so if my, so 10, 000 ish,

[00:20:31] Linzy: And that’s assuming a higher rent.

[00:20:33] Christine: Yes,

[00:20:34] Linzy: How much of that includes the assumed rent increase? Like, if you did stay where you were, what would be the number?

[00:20:40] Christine: So if I scroll down, one would be about seven. You said, if we didn’t include retirement, vacation, anything like that.

[00:20:52] Linzy: Just looking at it like: you’re out. You can breathe. You can put your energy into building something new.

[00:20:58] Christine: Okay. And if I stayed where I was, it would be probably about 8,000 a month.

[00:21:04] Linzy: Okay, so $8,000 a month is your minimum to cover your life. We know that $10,000 is better, obviously. But we’ll say $8,000 is enough that you can live and breathe for a month at a time. So, as we think about this, like creating your runway, I’m curious how much a month then is coming in from your private practice.

[00:21:25] You said about 3,000 a month right now?

[00:21:28] Christine: Yeah, it varies. I would say usually between 25 to 3,

[00:21:34] Linzy: okay. Okay, 25, 000 and then business expenses come off of that, right? So if we, if we look at the average, I think you had said about 22, 000 a year is the average. So if I just take that average and I divide that by 12, then your average kind of take home is about 1, 800. it’s 1833, but I’ll just make it 1800 for easier math.

[00:21:56] So if we take that 8000, take off the 1800, there’s a difference there of 6200 to make up, right, to get you up to that 8000. So, what that tells us is you would need 6200 of savings as you get started with the private practice at the size that it currently is, because there will be some earnings from the private practice.

[00:22:17] Christine: Right.

[00:22:18] Linzy: Yeah. So if we think about that, how much of a runway, knowing yourself, would you want to have to give you the footing to, to make a big move like this? Like is it three months of breathing room? Is it six months of breathing room? Knowing that your practice will also be gradually growing because you will be putting your energy into marketing and networking and all those things.

[00:22:39] Christine: My first instinct was to say maybe three months, but I, I would like to conservatively say five.

[00:22:47] Linzy: Yeah, that number came into my head, too. Let’s find out, like, a nice middle. So if we do, you know, 5 times 6, 200, then we’re looking at just over 30, 000. 5 times 6, 200, it’s 31, 000, right?That’s even so conservative. Because what that, what we’re assuming there, Christine, just to like play it out, is we’re assuming that you would stop working in the hospital, you’d have no income coming in there, and you’re going to start your private practice, but your private practice is not going to grow at all for five months.

[00:23:17] For five months, you’re still going to have just the same amount of clients that you have now and no more, which is like a pretty dire projection, I would say.

[00:23:25] Christine: Mm hmm.

[00:23:25] Linzy: How realistic is it that you would start your private practice full time and have no growth? Yeah.

[00:23:30] Christine: I’m going to say it would be unrealistic, But I was, I’m still feeling this urge to plan for it.

[00:23:37] Linzy: Yeah. And tell me about that part of you that wants to plan for this unlikely, but kind of scary scenario.

[00:23:42] Christine: I knew you were going to ask me about my parts today. I was trying to move away and

[00:23:47] Linzy: but I would say there, I do have this part of me that doesn’t really trust myself that I can do it. 

[00:23:53] Christine: Or that I’ll work hard enough. So I suspect it’s that, maybe with a little imposter syndrome in there as well.

[00:24:01] So yeah, that part of me really wants me to be able to save significantly more than I actually need. And then there’s also this other realistic thing where like I’m a big spender. So, I want to say that if I resigned from a really good paying job that I would have some restraint, but I’m actually not sure if I would. So I know it’s bad. It’s not great.

[00:24:28] Linzy: It’s not great.

[00:24:28] Well, I mean, part of it is knowing yourself a little bit, you know, like some people would go into the opposite where they quit their jobs. So they’re like, nope, I’m only eating ramen for a month. And like, I’m not going anywhere and I’m not doing anything. Some people move on to almost like a punishment mode, right?

[00:24:42] Where it’s like, well, until I do X, Y, Z, I’m not allowed to be well or enjoy life. I’m hearing that’s not a part that you have, more on the like other side, the like, maybe like indulging spendy side of things. I am hearing, there’s definitely a part of you that doesn’t want to, does not want to turn down your lifestyle.

[00:24:57] Even if you leave the job, right, you wouldn’t want to go into a more restrictive mode, which is fair. And then there’s this other part that doesn’t trust you to actually follow through on building the practice. I’m curious from this part of you that doesn’t trust you. What is that part of you think you’re going to do if you start a private practice full time?

[00:25:17] Christine: Maybe just, like, not grow and just stay, underperforming and under-incoming. I don’t know what the word is for that. That I wouldn’t make enough money and that I would, rack up lots of debt and get stuck in a situation where I didn’t have enough money to get myself out of a bad

[00:25:36] Linzy: Mm hmm.

[00:25:38] Christine: Like, really doomsday thoughts.

[00:25:41] Linzy: And has that happened before?

[00:25:43] Christine: No.

[00:25:43] Linzy: Okay, so there’s not a, right, right, there’s not a precedent of that, that this part is calling on. It’s not like, you know, this is something that there’s been clear evidence for. But there is this concern. Do you know where that concern comes from, that you will underperform, that you won’t be able to figure it out?

[00:25:59] Christine: I’m not sure. I might kind of have a reasonable idea. I also grew up in a family, like my family lived below the poverty line for probably the bulk of my elementary school years, so my money stories are, fraught, so there could be some, like, anxiety around you leave the job with the pension, you leave the job with the benefits, there could be some of that in there as well. 

[00:26:24] Linzy: And did you have anybody in your family or any role models who were entrepreneurs?

[00:26:29] Christine: Yeah. So my mom is actually a social worker. She was a school social worker and then she also started a private practice right around the time that I went to university. And then my dad is like a lifelong business owner. Yes, some.

[00:26:43] Linzy: Some entrepreneurs. Have you seen examples of really successful entrepreneurship in your family?

[00:26:49] Christine: No.

[00:26:49] Linzy: So what are the words that you associate with entrepreneurship based on what you’ve seen in the people closest to you?

[00:26:56] Christine: Hard work for sure. I think about how my brother is also an entrepreneur and everybody in my family works really hard. So Yeah, I guess that’s the only, really the only thing. And the only other thing I guess would be like other people are successful entrepreneurs, I guess that doesn’t really feel like an identity that’s super familiar to me. Like, I can’t really resonate with that right now.

[00:27:18] Linzy: Yes. Yeah. Okay. So you, you’ve seen entrepreneurship done, but it’s like really hard work, but not really paying off. So that would make sense that for a part of you, it’s hard to imagine this could actually work. You could actually make good money. When you have played with these numbers and forecast it, because it sounds like you have done some forecasting around what this would look like, what would your private practice need to look like to give you the income that you need?

[00:27:42] Like how many clients a week would you need to be seeing? What would your fee need to be? Do you have some of those numbers yet?

[00:27:48] Christine: Yes, I do have them. My sweet spot would be 16 clients and my clinical supervisor tells me that this is too conservative, and I’ll surely end up taking more. But I have this idea in my mind that I need a little bit of rest, and that 16 clients a week would be the most I would want.

[00:28:07] Linzy: 16 a week. Yes. And I would say for me that actually just to put it in perspective, that was not my sweet spot. That was my maximum. That was my, like, I can do no more. Now I go home and die, and recharge for the weekend. So 16 clients a week. And what fee have you been looking at that would help to support you on 16 clients a week.

[00:28:26] Christine: I think my fee would have to be around 185 for that to mean what I needed to mean, you know?

[00:28:32] Linzy: Okay. So it’s like 185 per session, 16 sessions a week. And how many weeks of the year would you want to take off for vacation?

[00:28:43] Christine: Well, ideally I would take like six.

[00:28:45] Linzy: Of course. Okay. So 46, right. So that brings you to about one 36, one 60. If we tone that down a little bit for like client absences and whatnot, I’m going to like take 5 percent off that just to sober it a little bit, which makes it 129,352. And then your operating expenses. What would you see those being once you’re in full time?

[00:29:10] Like, would you have an office and additional expenses or pretty close to what you’re doing now?

[00:29:15] Christine: Yeah. They’d be about the same.

[00:29:17] Linzy: Okay. Okay. And remind me what that number was your monthly OPEX number.

[00:29:20] Christine: Let’s say $13,000.

[00:29:22] Linzy: Okay. For the year. So $13,000 for the year. I’m just rerunning numbers that I’m sure you also have in front of you, but just like working through this out loud.

[00:29:30] Christine: Yeah. It’s helpful.

[00:29:30] Linzy: Yeah. If we take off the $13,113, that leaves $116,352 to be your income, which is quite close to the 125 that you’re at now. So it’s like $9 000 less than you have now, but you’re seeing 16 clients a week.

[00:29:47] You’re not working six weeks a year. We’ve also toned it down a little to account for some normal client like absences or your own sick time. And you’re only making 9, 000 less than you are now. So this is a much more spacious version of your schedule. What do you notice thinking about those numbers?

[00:30:02] Christine: Yeah. It’s poignant knowing that would be. Over half my time reclaimed. Most. 

[00:30:11] Linzy: There is also this time money equation, which, it’s kind of hard to know it until you live it, but it’s in that more spacious version of your life, where maybe you can just get up and go for a run in the morning, and you have time to make meals that you enjoy, and there’s less need for convenience, and there’s less exhaustion, and less like, oh, I’m just going to treat myself, I’ve had such a hard week, how that affects your spending, right?

[00:30:33] Even for being spendier, when we slow down, we tend to spend less. Right, because we’re able to meet our needs in other ways. So I would gamble to say, I would guess, that this actually would not feel like less money because you’re going to regain so much time. So thinking about this scenario then, 185 per session.

[00:30:54] Is that what you’re charging now? Or is that a little more? What are you charging now?

[00:30:57] Christine: Half of my clients, I would say, are still at my old rate of 130 per session, and then my new clients, for the last, I think, two years, paid 160.

[00:31:06] Linzy: So, I mean, as we’re thinking about maybe flirting was full time private practice, what do you think about going towards this 185 rate with your current clients?

[00:31:18] Christine: It feels difficult right. 

[00:31:20] Linzy: yeah,yeah. What do you notice about it? What’s difficult?

[00:31:23] Christine: I mean, it’s all the same old stuff, you know? It’s all that, like, lean in, make bank, Tiffany.

[00:31:30] Linzy: Tiffany would be all over this. Yes.

[00:31:32] Christine: But you know, what it is.

[00:31:34] Linzy: Yes. I do know what it is. Yes. Yeah. What I’m thinking is there’s a part of you that needs to see that this could work, right? There’s a part of you that is having a really hard time right now imagining that you could actually have a private practice that’s not exhausting you, making the money that you still want to make and need to make.

[00:31:54] And part of what I’m thinking is, can you show this part of yourself that you can do hard things, and make moves in the direction of where you ultimately want to go. What would that be like if that part of you could see you make this kind of move, which is a move in the direction of the numbers you need, and actually stick to it, and implement, and have those hard conversations and have that be your new fee?

[00:32:20] Christine: Yeah, I think it would be expansive. I think I would start to feel like there was more than one pathway out.

[00:32:28] Linzy: Yes. Yeah. It’s funny. I just recorded a feelings and finances podcast before we got on our call about this question of like being in a full time job and like, when do you step out? And I was saying how there’s two ways to do it. There’s the toe dip method, which is what you’re already doing, right?

[00:32:43] It’s like a little practice on the side. And then there’s the jump off a cliff method. I’m more of a jump off the cliff kind of girl myself. That’s not for everybody. And you do need to have that runway to make that work. but what’s nice about the toe dip is you can practice on a smaller scale, the kinds of skills and conversations you need to have on a larger scale to get to where you want to be.

[00:33:03] And you can do that in like these little-r ways and let yourself experience either that your clients don’t care at all, or that they’re happy to pay your new fee, like you get to actually have that experience without having everything on the line, right? You still have your hospital income. You know, you still have that 103, 000 a year coming in, but you also get to build the kind of resilience and the nerve to go for what you really need and want in your private practice.

[00:33:28] How does that land with you, thinking about this as almost like a practice zone for you?

[00:33:34] Christine: Yeah, like I sort of want to vomit thinking about it. But I also, I think I also know you to be correct. That feels right.

[00:33:43] Linzy: Yes. Because, 185, in Ontario is not a crazy fee. Right?

[00:33:48] And especially,no. And especially where you’re drawing from, like what city are you located in or where do your clients tend to be?

[00:33:55] Christine: Kind of around the London area.

[00:33:56] Linzy: Okay. There’s a university there. There’s lots of folks there who make lots of money, depending on your client population, obviously.

[00:34:02] But that’s a big enough city that you’re going to have a range of folks and there’s going to be lots of folks for whom 185 is a non issue, right? And I’ll say when I wrapped up my own private practice, which was a few years ago now, I stopped at 175. That’s where I was when I wrapped up and I definitely could have been charging more.

[00:34:21] My clients legit did not care what my fee was. When I raised my fee actually from, I can’t remember what it was before, I want to say I only raised it 165 to 175, whatever it was, they couldn’t even remember what the raise was because it was so insignificant to them financially that I had clients who were like, what’s it going to be again?

[00:34:35] 185? And I was like, Oh no, 175. Damn it. Should have been 185. So just to put that in like the context of, you know, the general area that we live, that is, I would say in, Ontario, not even really a premium fee for what tends to be out there at this point, especially if you look towards like Toronto, you know, and what folks are charging in those areas.

[00:34:56] Christine: Yeah. There’s a lot of therapists in this area charging 185, 175.

[00:35:01] Linzy: Absolutely. Yes. What do you think about being one of them?

[00:35:05] Christine: I guess that could be okay.

[00:35:09] Linzy: Because what I’m thinking is, your numbers work, right? These numbers work. 16 sessions a week at 185 with six weeks off, and the expenses that you already have, right? So like, it’s not like we’re totally making up these expenses. These are based on you already having a private practice. You already know what it takes to run it.

[00:35:28] All of these numbers work. So then the question is, how do you make this real in your life? Like, what is the first step to allow you to see that you could actually live this? These could be the numbers that you’re living.

[00:35:39] Christine: Right. Yeah. I suppose you’re right that it, potentially the conversation needs to start there or the work needs to start there. I always kind of had a sense of it in terms of marketing and trying to get new clients, but I’m also starting to see that I’ve been using my hospital job as kind of like a buffer to prevent me from having to do this other hard work of maintaining my current clients.

[00:36:05] Linzy: Totally. And I remember a bookkeeper that I knew years ago, kind of through networking, you know, in Guelph, Ontario, which is where I’m based. She talked about how she raised client fees, but she was like, I did it the chicken way. I only raised fees for new clients. I didn’t raise fees for my current clients.

[00:36:19] So I think about that. It’s like, often we’re scared to raise fees with the folks who are working with us. But those are the folks who already love what you do. Like they’re the folks who already know that you’re the person that they need. And if you raise your fee and they decide, I was willing to pay Christine one 50, you said it was.

[00:36:37] Christine: it’s. Yeah, 160

[00:36:39] Linzy: Okay, but I’m not willing to pay her 25 more. That probably actually tells you more about where they’re at clinically and how important this work is to them at this point than about an actual financial issue. Because the difference between 160 and 185 is actually a very small increase, right? If we think about somebody’s monthly budget, right?

[00:36:57] And how much they’re paying you for therapy on a monthly basis. So starting to bring this all together, we’ve covered a lot of ground.

[00:37:03] Christine: We have.

[00:37:04] Linzy: What do you see as your next step coming out of this conversation, what needs to happen to start to make some more movement around this? Yes. Yes.

[00:37:13] Christine: I definitely think I need to start having those difficult conversations or start having the conversation about balancing fees for my clients and then, I also need to follow up with my HR team to see if they can tax me some more. 

[00:37:28] Linzy: Let’s stop kneecapping your private practice. It’s not fair. That’s not fair. You’re not letting it shine and show you its potential, when it’s having to carry all those taxes. So I like that just as a practical solution to let you see your private practice does not suck. And it could actually be your full time income, you know, once you start to make these moves.

[00:37:47] So what are you taking away from our conversation today?

[00:37:50] Christine: I think that it will be, I’m going to have to simmer in this a little bit to see what resonates. But I’m definitely feeling some good pressure, I’m definitely feeling some pressure. It feels right. Like what you said affirmed a lot of the things that I suspected, you might say. and so I guess I’m feeling like a little bit more clarity

[00:38:12] Linzy: Yes. Yes. Wonderful. Well, I’m excited for you. I think you are on the precipice of something really cool. yeah. And whether you walk into that slowly or whether you eventually build your runway and jump off the cliff,I think there’s a lot of potential here that could make your life a lot easier than it has been.

[00:38:29] Christine: I hope so. Thank you. 

[00:38:30] Linzy: Yes, you’re welcome. Thank you so much for joining me on the podcast today, Christine.

[00:38:34] Christine: Take care.

[00:38:47] Linzy: I really appreciated all the different pieces that Christine brought to this conversation today and a part that really sticks out for me is about this fear of trusting ourselves. This need, that we can have to build up so much stability and so much security and so many savings, because in Christine’s case, as she shared, there’s a part of her that doesn’t trust herself, sometimes it’s that we don’t trust ourself to follow through, sometimes it’s that we don’t trust the world,there’s different reasons that inform this, and when I notice this kind of thinking come up in myself, where I feel the desire to kind of hoard or set really high standards for when I can step out and take a risk,

[00:39:29] I try to think about: what would the scenario actually look like realistically where I would literally accomplish nothing in six months, and it’s pretty hard to imagine. So that’s a piece that I would offer to everybody listening. If you do find yourself, having parts of you that doubt that you’ll be able to figure something out or that think that, maybe you’ll never get clients in your private practice.

[00:39:49] You shouldn’t start one because how would you ever grow your private practice? If you think about yourself and you think about if you actually have the time to dedicate to this project, if this was actually your full time project, how many things would you have to not do, and how many things would have to go wrong for you to make literally no traction in this area?

[00:40:07] It would mean that all of your networking would have to fail. Nobody would be able to understand what you do and refer clients to you when you’re connecting with colleagues. It means that nobody will call you from your psychology today or that everybody that calls you wouldn’t book through.

[00:40:20] You have to think through almost that, what’s the worst that can happen? Because it’s so unrealistic because therapists are very competent people. Therapists and health practitioners, like we know how to figure things out and if you’re really committing your resources to making something happen in your private practice, you are going to have time to solve problems and to figure things out, and to try things, until something starts to make an impact.

[00:40:45] So that’s something that I always find helpful to remind myself is that I’ve solved lots of problems before; I will solve lots of problems again in the future. And it’s something that I know to be true of the folks who listen to this podcast as well. We have the ability to figure things out. So there’s always going to be this balance of taking care of parts of us and giving us enough security and enough of a runway in life to be able to make moves without being overrun with anxiety,

[00:41:09] but also, we are people who can solve problems. So we need to also temper that as we’re thinking about what we need to be able to step out and do what we really want in our careers. And in this case to start a private practice full time. So thank you so much to Christine for coming on the podcast today.

[00:41:26] You can follow me on Instagram at Money Nuts and Bolts, and if you are enjoying the podcast, if you’re curious about working with me, the best way to learn about what I do and to learn about my course, Money Skills for Therapists, which is my course for solo practitioners, is to check out my masterclass.

[00:41:42] We’ll put the link in the show notes. The masterclass covers the biggest three mistakes that therapists tend to make with money. It teaches you my four step framework to getting your private practice finances totally in order, which, is part of my course, Money Skills for Therapists that has helped hundreds of therapists to turn around their relationship with money,

[00:41:59] and it just gives you more of a sense for me and what I teach and what’s included in money skills for therapists. So if you are curious about working with me, and you are a solo practice owner, that is the route to take.

[00:42:09] If you are a group practice owner, then you’re going to want to get on the waitlist for Money Skills for Group Practice Owners, which I run a couple times a year. So we’ll put both of those links in the show notes, for the masterclass, which gets you, your invite to Money Skills for Therapists, and the waitlist link for Money Skills for Group Practice Owners for those of you who own group practices.

[00:42:25] Thank you so much for joining me today.