What Exactly Is Financial Therapy And Do You Need It?

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Money isn’t everything, but, it can feel like it is when you’re having money problems. A lack of assets, insufficient income, high debt, poor money management skills and lack of financial education were the top issues contributing to financial stress. It is difficult to enjoy a fulfilling, happy life along with good mental and emotional health when you have major financial issues looming over you. It can feel like a weight pressing on your chest at all times.

The truth is that most people will face some financial stress at some point due to things beyond their control. According to the Global Financial Literacy Excellence Center, 60 percent of American adults feel anxiety surrounding their finances. There will always be factors that you cannot influence like your company spontaneously laying off 100 employees or the stock market taking a turn. Financial wellness is about learning what you can control and getting a handle on that. For some people, that isn’t as simple as understanding money – it’s also about understanding their emotional relationship with finances. That’s where a financial therapist comes in. Here’s what to know about financial therapy.

Financial Therapists Are Certified

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In a world of self-proclaimed “counselors” and “coaches,” you can’t take your chances when it comes to your money. Financial therapists are certified by the Financial Therapy Association (FTA). According to their website, the FTA is an “organization comprised of professionals dedicated to the integration of cognitive, emotional, behavioral, relational, and financial aspects of well-being.”

Most financial therapists have a background in financial advising or therapy, and bring that expertise to their work as financial therapists, rounding out their knowledge base to be educated in both areas. In fact, the FTA usually requires applicants to have a bachelor’s degree in either a finance or mental health related field.

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What Is The Goal Of Financial Therapy?

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The goal of financial therapy falls into two pillars: to help you understand your underlying beliefs around money and your emotional relationship with money, and come up with a practical plan to having better money habits.

Poor financial habits are often the symptom of an underlying issue – one of which you may or may not be cognizant of. That is why so many people deal with life-long financial problems. They don’t get to the root of the issue. So they might pay off one credit card bill, only to rack up another huge debt. If the root of the issue isn’t addressed, the cycle perpetuates itself. Financial therapy isn’t only about helping you with a logistical plan to make more money, manage debt, or invest properly – it’s also about finding out what beliefs and emotions cause you to make poor money decisions.

Financial therapy might also explore any financial trauma you could have gone through. If you experienced a financial event that upended your life – either in childhood or as an adult – it might have set off a psychological response that triggered unhealthy money habits. This is one way financial therapy is very similar to regular therapy, in that it does search for trauma that might be the cause of the issue.

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Who Needs Financial Therapy?

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There is no definitive answer to who needs financial therapy. Some could argue that every adult would benefit from a few sessions of financial therapy, even if they aren’t facing money problems. However, these are some behaviors that could indicate a need for financial therapy:

Gambling addiction
Spending addiction
Emotional/uninformed high-risk investments
Financial infidelity in a marriage
Emotional spending

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Why Use A Financial Therapist?

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If you already have a regular therapist and a financial advisor, you might wonder why a financial therapist is necessary. Each of these professionals can only address one-half of financial issues. A financial advisor can give you informed money management advice, but because they do not have a therapeutic background, they cannot address the underlying emotional and psychological causes of poor financial habits. A therapist can help you explore the emotional and psychological reasons of poor money habits, but they cannot provide you with expert advice on making better money decisions.

A financial therapist exists at the intersection of the therapeutic and financial fields. So you can work with one person on two areas of your life. This allows for a more holistic, connected approach to managing emotional and financial health.

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