Financial Therapy, the merging of personal finance and psychology, is a neglected variable in discussions about financial health. Over the last year, I’ve dove into a niche area of financial psychology to learn how to help clients navigate those feelings while encouraging better money practices.
Financial therapy is a gray area. Mental health practitioners and financial planning professionals engage in a game of tug of war over who gets what slice of the pie. Organizations like the Financial Therapy Association (FTA), Financial Planning Association (FPA), and the Association for Financial Counseling and Planning Education (AFCPE) give guidance and guardrails in this space. I had the opportunity to attend the 2022 FTA conference as a speaker and the 2022 AFCPE symposium as a guest and was blown away by how normalized conversations about the impact of our thoughts and emotions affect our behaviors with money. This validated my work as a coach and educator in the space and gave me a greater community with like-minded views and approaches to total financial wellness to tap into.
The Need for Financial Therapy
Financial therapy provides a more in-depth approach to money than your status quo financial education because it takes into account the various feelings, personal experiences, and cultural backgrounds that influence your money behaviors. There’s quite a runway of issues to address; from things that affect you internally, like financial anxiety or money shame, to things that may impact your relationships, like financial infidelity. Financial trauma, the area I specifically focus on, can surface and impact anyone regardless of background or income level. It can come from taking financial advice from an unqualified source and that backfiring, or it can come from an eviction, layoff, foreclosure, or repossession. Those money traumas can in turn influence how you view or interact with money in the future regardless of how much or how little you make. It can result in things like money hoarding or overspending. These are all areas a professional in financial therapy can help to identify and address.
Who can call themselves a financial therapist and what qualifies them as such is an area that has carried a bit of contention. There are those who have financial training as their foundation with additional training in mental health. Then there are those who have a mental health background with additional financial training. Since financial therapy is an unregulated environment, much like financial coaching, technically anyone can call themselves a financial therapist. This may make it difficult to identify qualified professionals for your specific needs. Many people believe that mental health professionals’ clinical methods are crucial for successful therapy. However, others argue that practitioners’ personal experiences in overcoming similar challenges can also be valuable. In the context of financial therapy, it’s important to consider both perspectives instead of favoring one over the other.
Why Financial Therapy is Beneficial
The clarity and peace of mind that might come from a structured financial coaching progression can feel therapeutic as you gain more control over your economic life. Working with a financial counselor or therapist can help you come to terms with limiting beliefs, shame, or guilt around financial outcomes related to the restructuring of debt, building credit, or strategies to increase income with a clinical methodology that classifies as therapy.
As a child, I remember wanting to be a psychiatrist to help people work through complex issues with a form of psychotherapy. Having been in the financial industry for over a decade, stumbling into financial therapy is a call back to my childhood dreams and ambitions. Financial therapy is a logical progression in the advancement of financial wellness that incorporates a holistic approach to money.
About Rahkim Sabree
Rahkim Sabree, CFEI is an author/columnist, speaker, and financial coach focusing on the pathways between financial literacy and financial empowerment. Rahkim is the author of the bestselling book “Financially Irresponsible” and has been published in Business Insider, The Grio, Black Enterprise, Entrepreneur, CEO World Magazine, and more. He can be reached via his website at www.RahkimSabree.com.