Every now and then, people are trying to build private practice. One thing that one needs to realize is that private practice is actually business and not a hobby. Therefore since it is a business, there are several things that are put into combination for it to flourish. A combination of effective marketing, proper mindset and the right attitude is required. In setting a private practice finances is a key factor. Financial literacy is one of the most essential factors to a successful practice. One needs to know how to manage money and have a healthy relationship with it. A lot of things that relate to money are there and they include adjusting thoughts and beliefs around money.
In accounting there is something referred to as a three piece pie accounting section. What is meant by this is that the income that one gets should be divided into three sections which should go into different bank accounts. The tax pie is the first and it requires that the income that is deposited here not be touched until it comes to the time of paying taxes. In a business one needs to pay bills and therefore the second section of the pie is for paying bills. In a private practice one will definitely need to pay bills which include water and electricity bills, services such as cleaning bills and of course salaries. The personal account is the third section of the pie. After paying taxes one can find that they have some of the money left and this money can be taken to the second section of the pie which is paying bills. If there are some finances left after the bills have been paid they can be taken to the personal account. The three piece pie section is very important because it ensures that a person does not lag behind in paying taxes or other bills. It also ensures that personal funds and professional funds do not mingle.
In money matters one should know when to save and when to invest as you are going to learn more from this page. There should always exist a balance between saving and spending because one can find themselves spending even what they are supposed to pay. There is a tendency by some people at times to cling so much on their money such that they even forget some of their needs and also limit their chances of growth. Some people always have the fear of not having enough. Healthy financial management will ensure that there is enough to spend and save in private practice. For the good management of the finances, the three piece pie accounting section can assure a person. Overspending or over-saving can be as a result of unhealthy money mindset.