Do You Need a Financial Therapist?

7 minute read
Diane Harris is a journalist specializing in personal finance. She is the former editor-in-chief of Money magazine.

Maybe you feel like a failure because all your friends seem to have more money than you do. Or maybe you’re up to your eyeballs in credit card debt, and no matter how many times you manage to pay off your balances, you find yourself in the hole over and over again. Or you’re a saver but your partner’s a spender, and your constant fights about money are damaging your relationship. Or you’re just constantly anxious about your finances, and your work, sleep, and social life are starting to suffer.

It might be time to see a therapist—a financial therapist, that is. Yes, that’s a thing.

Since the pandemic, experts say, there has been a sharp increase in both the number of people seeking help with the emotions they’re feeling around money and the ranks of professionals trained to provide it. “COVID was the perfect storm because it created a lot of financial stress in people’s lives, and also made people more aware of how stress impacts their mental health,” says Aja Evans, a financial therapist in New York City and incoming president of the board of the Financial Therapy Association, a professional group with about 440 members nationwide. “Money and anxiety have become less of a taboo to talk about.”

That’s a welcome development, given that money is a leading cause of stress for most Americans. “Money has such a profound emotional impact on people’s lives, and those emotions in turn have a big impact on our financial decisions and behavior,” says Brad Klontz, a financial psychologist and certified financial planner who co-founded the Financial Psychology Institute. “Everyone is stewing in their own shame bubble about their relationship with money, so it’s important to recognize how normal those feelings are—and that there’s help out there to deal with them, if you need it.”

How to tell if you need a financial therapist

Not everyone who’s stressed out about money needs therapy, of course. If you’re primarily looking for practical, crunch-the-numbers advice—say, you want help dealing with the financial fallout of a divorce or a layoff or figuring out how to pay off debt—an empathetic financial adviser who can work with you to put together a solid action plan may be your best bet.

If, on the other hand, your anxiety about money has become debilitating, you’re so overwhelmed or frozen that you avoid dealing with your finances altogether, or you recognize a pattern of harmful financial behavior but feel powerless to stop it, then a financial therapist who specializes in money and mental health might the might be just the thing. 

“People come to see me when they feel out of control with their finances,” Evans says.

Overspending, particularly via credit cards, tends to be a big issue. Amanda Clayman, a financial therapist in Los Angeles and host of the podcast Emotional Inve$tment, has observed a common pattern among her clients: “As soon as I’m out of debt, I find myself splurging again, like money just runs through my fingers, so I’m in the exact situation all over again.”

Read More: Is Money Making You Sick?

Couples make up a third to half of Clayman’s practice. They often need help with reconciling different money management styles, tied to issues around judgment and control. Dealing with the lasting impact of how your family handled money when you were growing up is another common challenge.

Often, Clayman says, clients have already tried another form of help, maybe seeing a mental health professional for anxiety or a financial planner for investment or money-management advice, only to find themselves unable to execute the plan or quit their self-sabotaging behavior. “I am no one’s first stop,” she says.

How to find a great financial therapist

Financial therapy, which initially took off during the Great Recession of 2008, is still a young field. Training programs are even newer. That can make it challenging to find a practitioner with formal skills and experience. 

“Only a small fraction of mental health programs have even a single financial-related elective, despite financial stress being the number one stressor in American life,” says Megan McCoy, an assistant professor at Kansas State University’s Department of Personal Financial Planning, who teaches courses on financial therapy and is a certified financial therapist herself.

While many financial therapists are licensed mental-health professionals, the field also includes financial planners, so it’s important to consider which type best suits your needs. Though by no means exhaustive, you can find a list of practitioners at the websites of the Financial Therapy Association, the Financial Psychology Institute, and the Center for Financial Social Work. Among the certifications and training to look for: the Certified Financial Therapist designation, introduced by the Financial Therapy Association in 2019, and the Certified Financial Behavior Specialist designation, from the Financial Psychology Institute. Kansas State University, Creighton University, the University of Georgia, and Texas Tech University also offer programs in financial therapy, and alumni of those programs will have taken multiple relevant courses.

Meanwhile, the Certified Financial Planner Board has added a module on the psychology of financial planning to its curriculum and exam, ensuring that, as of 2022, any planner who earns the CFP designation has at least some grounding in the subject. 

Aim to interview at least three practitioners before deciding who to work with. Klontz suggests asking about their approach to treatment and whether they have experience in the specific problem you’re dealing with. Personal chemistry is also key. Says Clayman: “One recent study showed the most critical factor in somebody having an improvement in their mental health was a feeling of connection and warmth from their practitioner.”

Fees per session commonly range between $150 and $350 an hour, with many therapists offering a sliding scale to clients who can’t afford treatment otherwise. Don’t count on help with the tab: insurance may not cover this type of therapy, unless you’ve been formally diagnosed with a mental health disorder or a money-related disorder, such as a gambling addiction.

What to expect from financial therapy

Unlike traditional therapy, financial therapy tends to be targeted and of relatively short duration. You might need as few as three to six sessions or to work with a pro for six months or less, with periodic check-ins after that to make sure you’re feeling OK about where you are with your money.

Depending on the nature of the problem that prompted you to seek help, you might work on examining why you feel the way you feel about money, identifying patterns that undermine your financial goals or good intentions, reviewing your cash flow so you have a realistic idea of what you have to work with, and coming up with coping strategies and a plan to help you get unstuck from whatever financial behavior has been causing you distress.

Read More: The Best Financial Advice for Young Adults

What a financial therapist focused on mental health won’t do: advise you on how to invest, restructure your debt, or other specific financial steps to take. “The goal is to help you cope with the anxiety you feel about money, so that when you’re ready to take action, you’ll actually be able to follow through,” says Evans.

Simply lifting the taboo around the emotional side of your finances is helpful for many people, experts say. “Anytime you engage in these conversations around money, whether it’s with a helping professional or even just a friend or family,” McCoy says, “you’re taking a baby step in the right direction.”

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