There is trial every now and then by people to build private practice. One needs to realize 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. Effective marketing, proper mindset and the right attitude is a required combination. Finances is a key factor in setting a private practice. For a successful practice, financial literacy is one of the most essential factors. What one needs is a healthy relationship with money and know how to manage it. There a lot of things that relate to finances like adjusting beliefs and thoughts around money.
There is something referred to as the three piece pie accounting section in accounting. 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. There is the tax pie and this requires that the income deposited here should not be touched until it comes to the time to pay taxes. One needs to pay bills in a business and therefore the second section of the pie is for paying bills. Definitely in a private practice, one needs to pay bills which include water and electricity bills, services such as cleaning bills and of course salaries. The third section of the pie is for the personal account. 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. This three piece pie section is very important as it makes sure that one does not lag behind in paying taxes or other bills. It also ensures that personal funds and professional funds do not mingle.
One should know the time for investment and the time for saving in money matters. One should always have a balance between saving and spending because they can find themselves spending even what they are supposed to save. 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 fear that they might not have enough. Healthy financial management in a private practice will ensure that there is enough to spend and to save. The three piece pie accounting section ensures good management of the finances. One can be led to overspend or to over-save by having an unhealthy money mindset .