Financial Therapy:
Financial Therapy is an emerging field at the intersection of psychology and finance. It focuses on the emotional, behavioral, and psychological aspects of money—how people think about, feel about, and interact with money—rather than just the numbers.
Here’s a detailed overview:
1. Definition
Financial therapy is a collaborative process that helps individuals and couples understand the connection between their financial decisions and their emotional and psychological well-being. It aims to address underlying emotional issues that influence financial behavior, such as anxiety, guilt, shame, or compulsive spending.
2. Goals of Financial Therapy
- Identify Emotional Triggers: Understanding the feelings that drive financial behaviors (e.g., stress leading to impulsive buying).
- Improve Financial Behaviors: Developing healthier habits around saving, spending, investing, and budgeting.
- Resolve Money Conflicts: Addressing money-related conflicts within couples or families.
- Enhance Financial Well-being: Building confidence and reducing stress related to money.
- Integrate Psychological and Financial Health: Creating a holistic approach to financial decision-making.
3. Who Can Benefit
- Individuals with money anxiety or stress
- People struggling with overspending, hoarding, or debt
- Couples experiencing money-related conflict
- People with financial trauma or past financial setbacks
- Anyone seeking a better relationship with money
4. Methods and Approaches
Financial therapists use a combination of psychological and financial tools:
- Cognitive Behavioral Techniques: To change unhealthy money beliefs and behaviors.
- Emotion-Focused Therapy: To process emotional responses related to finances.
- Couples Therapy Approaches: To manage shared financial decisions and conflicts.
- Psychoeducation: Teaching about money management, financial planning, and emotional awareness.
- Behavioral Interventions: Creating practical plans for budgeting, saving, and debt reduction.
5. Difference from Financial Advising
- Financial advisors focus on numbers, investments, and planning.
- Financial therapists focus on the emotional and behavioral side, though they may collaborate with financial advisors for a holistic approach.
6. Examples of Financial Therapy Work
- Helping a client understand why they overspend when stressed.
- Coaching a couple to navigate conflicting financial priorities.
- Assisting someone with financial trauma (e.g., loss of a home or job) to rebuild confidence.
- Addressing feelings of shame or guilt around debt.
Essentially, financial therapy treats money problems as human problems, not just numeric ones, helping people make conscious, aligned financial decisions without being driven solely by fear, habit, or emotion.
Shervan K Shahhian
LIBERTY PSYCHOLOGICAL ASSOCIATION 