Denise Norberg Johnson/ Pinterest | Financial therapy can help you determine and address behaviors affecting your finances

Where Personal Financial Meets Mental Health – All You Should Know About Financial Therapy

Advisor December 1, 2022

Denise Norberg Johnson/ Pinterest | Financial therapy can help you determine and address behaviors affecting your finances

You may notice that your money isn’t going as far as it used to, whether it’s at the grocery store, the gas station, or the cost of rent. This is especially true as rising inflation continues to erode the purchasing power of the dollar. As a result, there are numerous reasons to be concerned about your finances right now.

Financial stress is not limited to the ranks of the unemployed. It can also affect people who have enough money now but are concerned about the future. Money can be difficult to discuss, even in a regular therapy session, regardless of where you fall on the socioeconomic spectrum.

Louis DeNicola/ Unsplash | A financial therapist has psychology and finance training that they can use to help you understand and deal with financial issues

Financial worries can affect every aspect of your life. After all, money isn’t always just about money; it can also serve as a substitute for stress, anxiety, and trauma. That anxiety can manifest as fears about the end of life and mortality, such as running out of money in retirement or during an emergency.

What is financial therapy?

Financial therapy exists at the intersection of mental health and personal finance, examining how money manifests itself holistically in a person’s life. Financial therapists examine how individuals and couples think, feel, and behave with money rather than just budgets, financial goals, and retirement plans.

Financial therapists have received training in the psychology of money and the fundamentals of financial management. However, they are not a replacement for financial planners. Instead, they assist people in understanding the behavioral barriers that make prudent financial decisions difficult.

What does a financial therapist do?

Getty Images/ Sofi | Financial freedom is available to those who learn about it and work for it

Financial therapy aims to assist people in resolving financial issues and establishing a sense of financial security. Financial therapists use evidence-based practices and interventions to help people think, feel, and act differently about their money. Much of the misunderstanding about money stems from the belief that money is rational and transactional: work for a paycheck or other remuneration and money for goods and services.

Financial therapists teach their clients about the emotional and psychological aspects of money management and assist them in identifying the sources of problematic financial behaviors such as compulsive spending, hoarding, overworking, gambling, and withholding financial information from a partner. Resolving negative emotions and responses to money often necessitates the assistance of a professional trained in both mental health counseling and financial planning.

How to choose a financial therapist

Jacqueline DeMarco/ Getty Images | The financial crisis helped mental health professionals understand that money is an area of deep concern to clients

Hiring a financial therapist can be a big decision, so you want to choose the right one. You should look for some of the same things you would when seeking a behavioral therapist. That means finding someone who specializes in your problem area and who you feel comfortable being vulnerable with.

If you think a financial therapist is what you need and you’re ready to get started, you can search the Financial Therapy Association to find one.