Could a Financial Therapist Change Your Relationship with Money?
Learn how financial therapists can help you address the underlying fears and concerns that may be leading you to make poor money decisions.
Personal finance is often discussed in a rigid, math-focused manner — if you save X amount every month, you could have Y in the future. However, the emotional side of money can be just as important, if not more so, to improving your financial health. Financial therapists recognize this and can help people strengthen their relationship with money.
What is financial therapy?
Financial therapy is a relatively new and blossoming field. While money may be the focus, it's distinct from the type of guidance you receive when working with a financial advisor.
"Rather than solely focusing on budgeting, financial goals and retirement plans, financial therapists look at how people think, feel and behave with their money," says Lindsay Bryan-Podvin, a financial therapist based in Michigan and founder of Mind Money Balance. "[Financial therapists] help people understand the behavioral hurdles that make it difficult to make wise financial decisions."
The service and sessions may look similar to traditional psychotherapy. However, there's an emphasis on how you relate to money and how that can impact other aspects of your life. And conversely, how other parts of your life play into how you handle your money.
Financial therapists may also bring other specialties to their practice, such as experience working with couples, families, trauma or addiction.
How could financial therapy help you?
"There are lots of reasons someone might seek a financial therapist," says Bryan-Podvin. "Common complaints of my clients are experiencing perfectionism, procrastination or avoidance of financial behaviors." She shares a few examples of how these can play out:
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You spend so much time analyzing investments or account types that you put off making any decision at all.
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You prioritize working and making money over maintaining relationships.
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One, or both, partners in a relationship doesn't want to discuss money because they feel it might "rock the boat."
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You have a subconscious belief that money makes a person bad and self-sabotage your finances.
"Clients have come out of financial therapy with the ability to follow through on a financial plan, an increased sense of comfort and competence with money, an understanding of how their childhood impacted their relationship with money and more," says Bryan-Podvin.
Derek Hagen, a financial therapist based in Minnesota who runs Money Health Solutions, has had similar experiences with his clients. He says many of the people that come to him know what they're "supposed" to do, but they struggle with getting themselves to do it.
"Implementing financial knowledge is where interior finance comes in," says Hagen. In other words, your personal history, beliefs and motivations surrounding your finances — the aspects of personal finance you'll work on with a financial therapist. "Everyone is different," says Hagen. "But the common theme is that the fear, shame, anxiety and stress that they felt before working with me are replaced with confidence, hope and optimism."
How to find a financial therapist
While traditional therapists are licensed on the state level, the same isn't true of professionals who call themselves financial therapists. "In the United States, there is no regulatory board for financial therapy," says Bryan-Podvin. However, you can review providers' educational background, certifications and designations when looking for a financial therapist.
The Financial Therapy Association's Certified Financial Therapist-ITM (CFT-I) is one such certification that both Bryan-Podvin and Hagen hold. Others include certifications from the Center for Financial Social Work and the Financial Psychology Institute. The Financial Therapy Association also has an online directory you can search through to find certificate holders.
Bryan-Podvin suggests finding someone who is trained and licensed as a mental health professional if you're looking for a financial therapist. The designation can vary by state but include licensed professional counselors (LPCs), licensed clinical social workers (LCSWs) and licensed master workers (LCMSWs).
However, the CFT-I is open to financial professionals as well. For example, Hagen doesn't have a mental health background, but he is a Certified Financial PlannerTM and Chartered Financial Analyst with a graduate certification in financial psychology. As such, he doesn't offer psychotherapy, although he may use therapeutic techniques when working with clients.
In addition to the professional's designation and certification, you'll want to find someone you're comfortable working with, which may mean interviewing several financial therapists. Often, an initial consultation call will be free, which provides you and the therapist a chance to see if it will be a good fit. Don't be scared to ask lots of questions during this time.
If you decide to move forward, financial therapists can charge anywhere from $100 to over $200 per hour or session. It can be difficult to determine how long an engagement will last. In some cases, your health insurance may help cover the cost.
Consider your goals for the upcoming year
Many people set money-focused New Year's resolutions. Perhaps they want to save more money or improve their credit. However, following through with a resolution can be much harder if you don't address the underlying psychological factors that may have held you back in the past.
If you have a specific finance question, such as which type of retirement account, a financial advisor might be a better fit. However, if you're struggling with your relationship with money — or how you handle money is negatively impacting your relationship with others — a financial therapist may be able to help.
Louis DeNicola is a finance writer based in Oakland, California. He specializes in consumer credit, personal finance, and small business finance, and loves helping people find ways to save money. In addition to FICO, Louis works with a variety of financial services firms, credit bureaus, and educational websites, including LendingTree, Credit Karma, and Experian.