Disclosure: This post may contain affiliate links (including being a participant in the Amazon Services LLC program). This means that I may earn a small commission if you decide to make a purchase through the attached links. Please read my Disclaimer for more info.
These affiliate links help to keep my website running and are very appreciated.
My opinions are my own and are unaffected by being affiliated with the products being discussed.
Thank you so much for your support and understanding!
Anyone who’s argued with their spouse…….
over bills or spending habits knows that money and emotions are linked.
Yet, when most people talk about personal finances, they focus on the logical side and then wonder why people do not achieve success.
It’s because they are only looking at half the picture. Emotions, behaviors, and mindset play a HUGE role in your spending habits.
It’s like people who are overweight and know they need to improve their diet and start exercising yet don’t do it.
Why is that?
It’s because their emotions, behaviors, and mindset dictate their habits more than logic does.
To change your habits you need to conquer your behaviors.
Most financial planners focus of the logical part of the brain. They can help with setting a budget, developing plans, and strategic investing.
Unfortunately, they are not usually adept at the emotional aspects of investing and overcoming preconceived notions and behaviors about money that people have.
On the flip side, traditional therapists are great for conquering your emotional demons yet suck at providing financial advice.
What’s the solution?
Enter the financial therapist.
In today’s article, we will discuss what is a financial therapist and how they are different than a financial planner, the benefits, how to find the right one for you, and much more!
What is Financial Therapy?
Financial Therapy is a specialized field of psychology in which financial therapists help you think, communicate, and behave differently with money.
It combines the financial knowledge and expertise of a financial planner with the emotional support of a therapist.
Financial therapists’ goal is to improve your overall financial well-being through evidence-based practices and conventions.
Financial therapists can help you identify your attitudes and values around money. They can also help you understand how you came to be who you are and why you view money in a certain way.
It’s a great middle ground between working with a traditional therapist and a financial planner. The financial therapist combines an emotionally supportive, therapeutic approach with the expert knowledge of a financial professional.
Your relationship with money is often driven by how you were raised and the economic conditions you experienced.
Financial therapy can also help improve your overall relationship with money and help you develop a plan to improve your finances.
The end goal of the service is to not just educate clients but also help them make meaningful changes to their thoughts, feelings, and behaviors around money and finances.
Benefits Of Financial Therapy
Successful financial therapy has several benefits.
Financial therapy can:
- Improve communication with your loved ones
- Reduce anxiety or fears related to money
- Provide tools and strategies for coping with stressful financial events
- Improve a person’s relationship with money
- Reset a person’s financial values
- Alleviate an unhealthy financial mindset and replace it with positive money mindset
- Teach discipline to change previous self-sabotaging financial habits
Financial therapy does more than solve problem and impart knowledge.
It can help change a person’s unhealthy habits, core financial beliefs, and adjust their financial mindset.
The length of time needed to achieve results varies by individual and circumstance.
Lastly, want another great benefit… price! Since it is technically a therapy, depending upon your insurance provider, it might be covered by your medical insurance!
Trust me, financial advice can be expensive, and I talk about the cost of financial advisors in the articles below:
Why I Do Not Like Financial Advisors
8 Things To Look For In A Financial Advisor
How To Manage Your Portfolio Like A Pro
If your insurance can cover the cost and you get both help with your money relationship AND a financial plan to boot, I call that a win-win situation!
Worst case, you need to pay out of pocket. If that happens, make sure you find a fee-based therapist. It’s much cheaper in the long run.
Why is this approach needed?
Many of us believe, sometimes subconsciously, that money and happiness are interrelated and connected.
Because of this, our relationship with money is deeply rooted in our mindset, behaviors, and even deep-seated anxieties.
Your financial situation is not only influenced by how much you earn, but also how much you spend AND why you spend money on certain things.
Even your goals, attitudes, and values shape your money mindset and your relationship with money.
Only so much can be explained objectively using charts, graphs, and data.
To enact real change, you need to address the subjective side too.
It’s easy to complain about spending $200 a month on manicures instead of shoes for your kids. However, can traditional financial planning explain WHY you feel a need to act this way?…. enter the financial therapist.
By understanding the emotions, motivations, and attitudes behind the behaviors, you can shape your mindset towards taking more rational financial actions.
This will lead to being better able to identify your true financial goals and shape your attitude to achieve the plan the financial therapist will help you create.
Want some examples when financial therapy might be for you?
Here are a few examples:
- Excessive fear or anxious thoughts about money
- Dangerous spending habits (excessive gambling, binge spending, money problem avoidance, etc.)
- Relationship problems with your spouse or partner centered around money
- Inability to change money relationship or money behaviors
- Poor money relationship due to upbringing
- Struggle with identifying your financial values
If you suffer from 1 or more of these examples, a financial therapist may be right for you.
2 Types Of Financial Therapists
There are basically 2 types of financial therapists:
- Those with a counseling background and added financial competency
- Those with a financial planning background and added a counseling competency
Given this, clients should pick a therapist that best fits their specific needs.
Because financial therapy incorporates two highly regulated professional services, a licensed practitioner agrees to follow the standards of care for both (i.e. the fiduciary duty of a financial planner and the doctor-patient confidentiality of a traditional therapist).
But how do you know when to hire a financial therapist and which type is best for you?
The main thing to consider when choosing the type to work with is your overall relationship with money.
For example, do you find it easy to create a plan yet suck at sticking to it? Do you have unhealthy behaviors about money and chronic financial issues like racking up debt, going over budget and prioritizing a $500 pair of shoes over saving for retirement?
Then maybe you want someone with more of a counseling background who has financial knowledge to get you back on track once your money relationship issues are resolved.
However, if you have a good relationship with money yet struggle with prioritizing, budgeting, and investing, you probably want a therapist with a more financial background who can provide some counseling as needed on your financial journey.
Whatever your reasons, I think a financial therapist has a lot of merits.
Now the next question, where do I find them?
How To Find A Financial Therapist
Since the world of financial therapy is very new, there are no official national certifications for financial therapy currently.
The best thing at this time is the Financial Therapy Association.
They offer an accreditation program in financial therapy. If I were you, I’d start here when searching for a financial therapist.
The Certified Financial Therapist (CFT) designation is needed to be considered for customers of FTA.
Applicants for CFT designation need to have a bachelor’s degree in either a finance-related field (accounting, finance, economics, etc.) or mental health-related field (psychology, social work, etc.).
Applicants must complete a series of educational training videos by FTA, pass a comprehensive exam, and demonstrate they have complete a minimum of 500 hours of necessary experience (half must be in direct client service and other half in teaching, financial plan creating, or peer-reviewed research) in the financial therapy field to earn a CFT designation.
Continuing education is also required once a certification is earned.
FTA also has a free Find A Therapist Tool that people can use to find financial therapists that fit your needs.
Bottom Line
Dealing with finances can be stressful. If you have anxiety issues towards money or a poor money relationship, you stress can magnify exponentially.
Financial therapists not only help clients develop a solid financial plan, but they teach tools to improve a client’s financial life.
Financial therapists work to lessen a client’s financial stress, help them have a more healthy, sustainable relationship with money, and develop a healthy money mindset.
Financial planning is a discipline like exercise that should be integrated into everyone’s daily life.
Sometimes achieving that healthy financial life is not an easy task and you might need a little help to achieve it.
There is some psychology behind finances so why not hire a professional who can help you with both the psychological and money aspects at the same time?
Food for thought……
Live The Life You Love, Want, And Deserve 😊
So, what do you think about today’s article? Think it can work for you? I’d love to hear your comments and reaction. Send me an email and let’s chat!
Want to join my newsletter? Click here and go to the bottom of the page to sign up.
Are you looking to learn more about finances? M1 Finance has a ton of articles and videos that can help you on your journey.
Come follow me on Pinterest to review my latest articles and so much more!
Looking to save money on your insurance? Check out Policygenius.
So, what do you think about today’s article? Think it can work for you? I’d love to hear your comments and reaction. Send me an email and let’s chat!
Do you have ideas for future blog posts? I’d love to hear your comments.
