Widespread job cuts, loss of income, bankruptcies and looming financial uncertainty have had a cataclysmic effect on people’s mental health. The coronavirus pandemic has amplified the stress many already felt about money, with the lockdown and spiralling debt further fuelled financial strain and insecurities.
Irrespective of the level of affluence, money can be a source of debilitating stress. Studies show financial anxiety blights people across the wealth spectrum. Now might be an opportune time for people to confront their fears about money. Fortunately, professional assistance is now available in the form of ‘Financial Therapy’ that helps people deal with money problems. A relatively new practice, financial therapy is growing in popularity as more people are addressing their money-related insecurities.
What Is It?
As per the Financial Therapy Association (FTA), financial therapy combines therapeutic and financial proficiencies where specialists help people improve their relationship with money.
“Financial therapy is where our bank account, money and savings come together with our money feelings, personal history and relationships with the goal of improving overall as well as financial well-being,” says Meghaan Lurtz, a lecturer of financial psychology at Columbia University and the former president of the FTA.
Financial therapy works on the confluence of financial advice and psychotherapy, “creating a collaborative and safe relationship where the client can openly and honestly talk about their financial realities,” says Ed Coambs, a certified financial planner in North Carolina who specialises in financial therapy.
Practitioners are trained to ask the right questions to help their clients gain insights to help ease their anxieties, says Megan McCoy, director of the Personal Financial Planning Masters Program at Kansas State University. “It could be engaging in conversations about your financial stress, your financial anxiety, money fights in your relationships, financial enabling, overspending, underspending, financial infidelity and much more,” says McCoy, a financial therapy specialist and co-author of a study titled Narrative Financial Therapy: Integrating a Financial Planning Approach with Therapeutic Theory.
How Does It Work?
Just as there are varied financial services, there is a range in therapy services. It depends on how the client and the financial therapist work together. “Combine random mixes of all of those different services and there is some sort of financial therapist for every type of financial situation. Sometimes this is more coaching and focused on just financial behaviours and questions, other times the work may be deeply therapeutic, which involves working with trauma and how that can impact your current financial situation,” says Lurtz.
It begins with an exploration of an individual’s relationship with money right now and what they wish that relationship could look like. “This could be individually focused (for example, I wish I spent less or stressed less about money) or relationship focused (I wish I fought with my partner less about money or my adult children were more financially self-sufficient),” says McCoy.
It could also resemble couples’ therapy where the provider works with a spouse or another family member on financial issues. “Many financial therapists will look for root experiences around money that are related to current money struggles,” says Coambs, who specializes in couples counselling. “If mom and dad fought a lot about money, is that being now replayed in your current relationship?” he asks.
Financial therapists do not typically see themselves as solution providers, but rather as facilitators, argues Coambs, who co-authored a financial therapy study about the impact of financial trauma on decision making. “Financial therapists will typically help clients learn how to evaluate their thoughts, emotions, behaviours and relationship dynamics and the ways that they are creating financial anxiety,” he says.
Financial Therapy Versus Mental Health Counselling
Money is as much a deep emotional phenomenon as it is about bank accounts and savings. “[Psycho]therapists, generally, are not trained on money, and from research it even shows that many therapists are uncomfortable with money,” argues Lurtz. “Working with a financial therapist who knows both money stuff and the emotional stuff can be really beneficial.”
McCoy stresses “hardly any of the [psychotherapy] programs even touch on money even though it’s the number one source of stress.”
A financial therapist, by definition, has a reasonable understanding of overall financial wealth management, which helps them assist in areas that fall outside the purview of a conventional counsellor.
What Sparks Money Anxiety?
In the context of the ongoing pandemic, the uncertainty brought on by the COVID-19 crisis is nearly crippling, says Lurtz. “There is stress and anxiety about losing one’s job, being able to pay one’s bills, or take care of one’s family,” she says, adding that the current non-stop coronavirus media exposure doesn’t help.
There are a range of triggers that can cause and exacerbate financial trauma. Early childhood experiences around money could be a major source of adult distress, says Coambs, adding that theft of money, being cut out financially, negative labels like selfish or bad with money could be other underlying causes of money stress. She adds that financial traumas are seldom traumatic just because of the money, but also because of the meaning that is given to the experience at the conscious and unconscious level.
Don’t Suffer in Silence
“If you are having a rough time right now or just feeling uneasy or confused about what this all means – reach out,” urges Lurtz. “There is no need to struggle alone when financial therapists are there and want to be with you during this time.”
“By bringing out into the open fears, anxieties, disappointments, shame and guilt, clients are able to gain new and fresh perspectives on their financial lives,” says Coambs.
