Three Different Ways To Set Your Fee (spoiler, do all three!)

Deal with your mindset stuff

We’ve all got stories around money and self worth. My old story, one which I’m constantly recovering from, is that nice things aren’t for me. I don’t really need much at all. Other people get by on much less. So when it comes to my work I’ve learned to keep my eye out for an impulsive habit to undervalue my time, energy, and effort. 

Ask yourself:

What is your story around money, value, worth, and having? 

Where does this story come from? 

What are your beliefs about money, stability? 

What do you want even if a part of you thinks it’s silly?

When I was a kid, we’d go to the store to buy clothes. My mom didn’t make a lot of money so we always headed straight to the sale section, never pausing to look at anything else. I’d pick out some things I liked but if we stayed there long enough, I’d put everything back. I had a black shirt already. I didn’t really need another one.

So, what does this have to do with setting my fee in my private practice? 

Well, I don’t need to pay off student loans that fast. I mean I could carry that debt for years. Right? Plenty of people do. Who do I think I am to want that? Why should I pay off that debt faster than anyone else? My clients need their money too! 

Something I’ve wanted for a while is a new desk. I have a desk, it’s fine. It does its job and it seems wasteful to get a new one. But it would be nice to have a more expensive one. 

When you think about getting to have, wanting, and worth, what memories come up? Get to know these stories and beliefs so you can see when they are influencing how you are making decisions now. This is a process that will likely unfold throughout your life. You have your whole life to learn what these stories are and get free from them.

There is nothing wrong with living a life of asceticism. Some people choose to do this- to live simply and in service to others. And I am grateful to those that do. But let’s be clear and make conscious choices about what we are up to. You have a masters degree which likely cost you a large sum of money. A sum of money that you have yet to pay back. You have rent or house payments to make. Food to buy. And maybe a vacation or two? Are these decisions about your fee coming from a fully informed place, having looked at your financial circumstances, considering the implications of your decisions for yourself and your family? Is this an intentional spiritual choice? Or are these very old stories run amuck telling you that you don’t get to have nice things because it’s not for people like you? Or you just shouldn’t want so much. 

Here’s the thing, I don’t care what you decide for you, as long as you do it with your eyes open and it comes from a place of freedom not slavery to old stories.

Furthermore you don’t have to choose between having a spiritual and social justice aligned business and being broke or making a lot of money and having a heartless practice. You can make a lot of money and run a business that is aligned with your values. More on that in another post.

So get to know your stories. Mine your memories so you can see them coming. When you know they’re there, then you have an incredible opportunity. You can make choices.

Look at the numbers

Money is emotional and psychological and it is an actual, tangible reality. I know money is a construct but for our purposes here today, we’re going to speak of it as a real thing. Because you better believe that your bills are real. One way to think about how to set your fee is to look at your costs. You’re looking at the cost to run your business like insurance, Psychology Today subscriptions, office rent, record keeping software, an accountant. And because you’re running your own business, you’re also taking into account your personal expenses because your revenue has to cover that too. 

I had a sliding scale for a long time. I had one because I felt like it. It seemed like what I was supposed to do, plus I didn’t think people would pay me that much (old story alert!) After some time, I sat down and figured out how much I wanted to make. Not just to meet my expenses but to enjoy my life. Then I took a look at my caseload and the fees each person was paying. I crunched the numbers and discovered that I wasn’t even close. Now instead of my fee being based on a feeling, it was based on numbers. I discovered that I actually couldn’t afford to have a sliding scale anymore. My sliding scale was closed and my fee was going up. That changed how my initial calls with clients went. Now when someone asked me if I had a sliding scale, I was no longer ridden with guilt or ambivalence. The answer was a clear “No, I do not.”

One of the best ways to get more comfortable with this whole thing is to start looking at your bank account every day. And if you don’t have a business bank account already, get one. I have five because I use a system called Profit First which I love and has completely changed my relationship with money. Let me know if you want to hear more about that!

You can start by deciding how much you want to make and working backwards from there. You can also go in the other direction by plugging in your costs and your desired budget for things like sick pay and vacation. Tiffany McLain already has an amazing tool for doing this so I’m not going to reinvent the wheel. Head over to her site to use her fee calculator.

Get into the feels of it

Okay so I know I just told you not to set your fee based on feeling but imagine you are having an intake call with a potential client and they want to pay you a low fee, a fee that is so low that you’re actually insulted. What’s that number? This is a fee that is so low that you don’t even hesitate to thank the person for their time and offer them a referral to someone else. Now take that number and keep bumping the fee up until you find the place that you are no longer insulted. Okay, got it?

Now imagine you’re on a call with a client and say a fee that feels really comfortable to you. It’s middle of the road, nothing edgy about it. What’s that number? Now keep bumping that number up till it feels really good. Like when you imagine getting paid that amount you feel light and joyful. Got that?

We’re going to keep going a bit. Start to bring that number up till you hit a point where it begins to feel uncomfortable. Find the number that feels ridiculous. Like you couldn’t even say it out loud. Now ease off that number just a bit. You’ll arrive at something that feels like you’re getting paid incredibly well.This is a number that pushes your edges around having and self worth. 

A lot of us have set our fees so low that if we were to pull the curtain back we would notice we actually feel some degree of resentment toward our clients. You’ve given someone a sliding scale spot only to find out that they are saving for a house when you are still thousands of dollars in debt. If you do this practice you might spare yourself some pain and keep resentment out of the clinical relationship. It’s good for you. It’s good for your clients.

If you combine all three of these approaches, then you will be in great shape.