The increasing number of people going through financial stress gave birth to financial therapy, the merging of finance with emotional support to help people cope with the stress. To help clients make logical monetary decisions and deal with various financial issues they might be facing, financial advisors must often provide this therapy.
One’s emotional health can be heavily damaged by the stress of managing money and dealing with financial pitfalls. Since money plays a large role in a person’s overall well-being, the stress that comes with it can sometimes become unavoidable. Other areas of a person’s life are ultimately affected by this emotional burden if left uncontrolled. Financial therapy provides support and advice geared specifically toward the financial realm and the stresses that come with it just like any other form of therapy that addresses other aspects of a person’s life.
The definition provided by The Financial Therapy Association to financial therapy is the “process informed by the therapeutic and financial competencies that helps people think, feel, and behave differently with money to improve overall well-being through evidence-based practices and interventions.”
A person seeking out financial therapy have a range of reasons. Unhealthy financial routines in many cases are adopted by a person because of behavioral issues including unhealthy spending habits, overworking oneself to hoard money, completely avoiding financial issues that need to be faced, or being secretive from a partner when it comes to the finances. Usually, bad saving, spending or working habits are signs of other bad habits related to mental or physical health.
A collaboration between a person’s financial advisor and a licensed therapist or specialist is involved in the most effective forms of financial therapy. There are unique qualifications that a financial advisor and therapist have and do not have. This is why complete financial support can be hard for one to provide and trying to do so may even lead the person in the wrong direction and ethical codes could be violated as well. However, informal therapy is often provided by financial advisors to clients and therapist would typically deal with emotional issues related to financial stress.
The one that stands in contrast to the traditional role of an advisor is the overall movement that needs to be considered when approaching finances in a more holistic light. You may find other financial experts who approach with tough love. All they talk about is paying off debt and investing without any compassion. Some people prefer to connect with someone who understands their emotions or at least help understand what they’re feeling at a given moment as well.
You may want to find a financial therapist who wants to know what you hope to achieve and what a healthy relationship with money looks like to you as a person. When looking to enlist the services of a financial therapist, it is best for you to likewise understand that this too, is a personal issue in a deeper level. You, therefore, need to interview them. Find out whether your personality match or do you feel any connection when having a conversation with the financial therapist.
One important thing you need to remember, however, is that there’s no point in going much further without addressing one of the most obvious issues and that is, money is also involved if you want to take care of your money. You need to carefully examine whether or not you can afford the services of a financial therapist. The accessibility of financial advising may have increased, but seeking the professional help of a financial therapist is pretty pointless if you’re in a situation where seeking out said help will put you in an even deeper financial trouble.
You don’t have to take that leap right away if you’re ready. You can try reading books or online resources related to financial therapy temporarily to help reduce the financial stress that you’re going through. You’re already one step ahead once you start doing your best to find these options.
Lastly, the real value can sometimes be understood through learning how to value yourself, your time, your energy, your gifts, and your skill sets. If you think you need help, learn to ask for it as soon as possible.
Flynn Financial Group Inc