Are you holding tons of cash but too terrified to invest? Racking up debt to keep up with the Joneses like your parents did? Betting every cent on Bitcoin? Or constantly arguing about money with your spouse?
If so, you may be having relationship problems ¡ª with money. And it could be time for financial therapy.
Money and emotions are intertwined. Don’t let the problem fester. You can’t divorce your checking account or 401(k).
Go talk to someone. You might need a sounding board. Maybe it’s time to figure out why the unhealthy way you think and feel about money is holding you back financially and emotionally.
But we’re not talking about a visit to a traditional advisor who maps out a plan to help you reach your financial goals. This advisor doesn’t tout stocks to buy or extol the benefits of dollar-cost averaging.
What’s Financial Therapy?
We’re talking about a certified financial therapist. These therapists specialize in the psychology of money. They use a blend of behavioral therapy like mental health treatment and financial counseling to help you confront your money anxieties. And, hopefully, they can help you patch up your problems with money.
A financial therapist delves into the root causes of money-related fears. Past financial traumas, subconscious beliefs or irrational feelings about investing can act as roadblocks to financial security.
“Financial therapy helps individuals, couples and families communicate and behave differently with money,” said Megan Ford, a financial therapist at Stackin, a financial wellness and money coaching app. “It empowers you to overcome negative or limiting beliefs or thought patterns about money.”
Money Isn’t Just A Number
Fixing money-related problems often has little to do with numbers, says Ford, who holds a Ph.D. in financial planning and a master’s degree in marriage and family therapy.
Instead, it’s more about exploring the causes of your negative feelings about money and then changing your behavior to lessen your money-related angst. It’s also about creating a more healthy mindset about the role money plays in your life.
“A financial therapist will explore more deeply the emotional and feeling side of money, and maybe even dig back into the past to learn more about where some of the values and beliefs about money come from,” Ford said. “It can unpack some of the reasons why you’re experiencing this high level of anxiety around finances. Financial therapy can help people start to address unhealthy habits that could be holding them back.”
New Way To Get Help With Money
Financial therapy is a new and evolving field. The Financial Therapy Association, which offers education needed to earn a Certified Financial Therapist (CFT-ITM) designation, has only been around since 2010.
The association’s members come from many disciplines. They include psychologists, marriage counselors, social workers, financial planners, accountants, coaches and academics. If you’re considering a financial therapist, the Financial Therapy Association has a directory on its website.
More people than ever are looking into financial therapy. Web searches for “financial therapy” rose 60% in the 12 months ended in November 2022, says Stackin research.
The rise is due to heightened financial anxiety driven by the pandemic, volatile financial markets, and the cash-flow squeeze caused by rising prices and inflation, says Ford.
“The financial distress of the last several years has taken its toll,” Ford said. “People are starting to connect the dots and realizing they’re having emotional experiences around money that’s affecting them mentally.”
Is Financial Therapy Right For You?
If money issues are affecting you emotionally, sparking turmoil with your spouse or causing a decline in your health, seeing a financial therapist could help alleviate stress.
Signs of distress include feeling overwhelmed by money troubles. Or the inability to save despite a sizable income. Or taking outsize investment risks with huge potential downside.
“If you’re taking a lot of unnecessary risk that puts you in a place of financial vulnerability,” that could be signaling a problem that needs to be addressed, Ford said.
If you’re overly stressed about your IRA balance, for example, a financial therapist can identify the root cause of your anxiety and suggest ways to de-stress.
Money Shouldn’t Be Taboo
A financial therapist can also help you deal with depression or negative personal feelings after a job loss, bankruptcy or other major setback.
If you’re a serial credit-card overspender, therapists can help you pinpoint your spending triggers. They can also help you and your spouse get on the same page when it comes to money and minimize fights over finances.
“Money is one of the last taboos,” Ford said. “Research shows that many couples would rather talk about their sex lives than their financial lives. Financial therapy really provides a super-important opportunity for us to start having more honest money conversations. Rather than shaming or blaming ourselves when we make financial mistakes, it creates an opportunity to see how we can do things differently next time.”
Often, having knowledge about budgeting, credit cards, loans and investing isn’t enough to make smart money decisions.
“Certified financial therapists go a step further to help uncover some of the beliefs, emotions and behavioral patterns that make implementing financial advice difficult,” says Nathan Astle, a certified financial therapist and former board member at Financial Therapy Association. “The goal of financial therapy is financial health, but also to increase overall well-being.”