Unless you’re a member of that fortunate 1% you probably find yourself stressed out over money issues at least periodically. But for some people financial issues go way beyond this and become an essential psychological problem. And this is what financial therapists can help with.
A new field
As you might guess, this is a comparatively new field. According to the APA (American Psychological Association) money is the number one cause of stress in people’s lives. Given this, it’s relatively surprising that the Financial Therapy Association didn’t come into existence until 2010. It currently has 250 members while there are 1100 accredited financial counselors.
What’s the difference between therapists and counselors?
The biggest difference between a financial counselor and a therapist is that the therapist focuses entirely on money. And while financial counselors are accredited financial therapists aren’t.
Why financial therapists?
People generally tend to seek out a counselor when they are having a financial emergency such as bankruptcy or a serious dispute between partners or spouses. In comparison, financial therapists are trained to help people – whether they are big spenders or thrift obsessive – develop financial well-being through an understanding of the cognitive, behavioral and emotional aspects of their financial problems.
In some cases, a financial therapist and counselor will work together in tandem to give a client a more holistic approach.
We know it but we don’t do
You already know you should be saving more money and spending less. However, the odds are that you aren’t. What financial therapists say is that reading more information about how you should spend your money is not going to help and that what needs to be addressed are the emotional issues underlying your problem.
Common money disorders
Financial therapists have identified five common money disorders. They are frugality, enabling, denial, dependency and rejection. How could you know if you’re suffering from one or more of these disorders? Here are the major red flags that say you might benefit from working with a financial therapist.
1. You’re avoiding your financial problems
There are times when we all feel reluctant about opening a bill. However, if you let your bills just pile up on your desk or a table this could mean you’re suffering from financial denial. Almost all of us have a low level of anxiety over money but for “deniers” the anxiety is so overwhelming that they just basically check out.
Here are the warning signs that you might be a denier.
- You borrow money constantly or are always getting new credit cards
- You have no idea how much you’re in debt
- You either can’t open your bills or just check out the minimum payments.
- You continue to hold onto the idea that somehow things will just work out.
- You either avoid talking about money with your spouse or partner or just tell her or him that everything is okay.
2. You’re obsessed with the idea of being frugal?
Of course, it’s good to be careful about how you spend your money but frugality can get out of hand. If you are chronically “underspending” and neglecting your needs it might be because it’s just too hard for you to part with the money. People who are severe underspenders tend to neglect basic taking care of themselves. For example, they won’t go to a doctor or dentist because they simply don’t want to spend the money. The warning signs that you may be frugal excessive are:
- You just can’t bring yourself to pay for basic necessities like home repairs or the dentist
- You have a healthy savings account and a minimal amount of debt but are still constantly worried about money
- You avoid going to the doctor so that you won’t have to make small co-pay
- You refuse to invest any of your money even in a low-risk option such as a CD.
- You’re willing to take advantage of other people if it means you would be getting something free or saving money.
3. You enable an adult child
If you are a financial enabler you’re sharing your money in a way that keeps your child from taking responsibility or becoming independent. Financial therapists see this most often with the parents of adult children. And yes, it’s okay to provide some assistance to an adult child but too much can create problems for both the giver and the receiver. If this is true of you, you might think you’re being altruistic and helping your child but what you’re really doing is satisfying your own needs. Here are the red flags that you may be a financial enabler.
- You give your child money even though you can’t really afford it
- You have provided so much financial assistance to your child that he or she has stopped trying to be independent
- You find yourself struggling with your finances but then watch your adult child go on a shopping spree – on your money
- You feel resentful when your child asks for money but you just can’t imagine saying “no.”
4. Do you totally rely on someone else to handle your finances?
You could be a stay-at-home mom that lets your spouse or partner handle all of the family’s finances. However, there are situations where people become too dependent on that partner or spouse and much of this probably has to do with gender role problems. One therapist has reported that people who totally rely on someone else to handle their finances often have issues with drugs and alcohol or end up in abusive relationships. When a person has everything given to him or her and another person is managing the money, that person can end up with no self-esteem or a sense of self-worth. Here are the danger signs that you have become too dependent on your spouse or partner.
- You’ve never supported yourself on your own
- You resent the feeling that the money you’re given comes with strings attached
- You have no basic financial knowledge
- While your relationship is an unhappy one you’re scared of the idea of leaving and having to support yourself
- You have little or no self-esteem
- You have absolutely no idea as to how much debt or how much money you have
5. You are uncomfortable with the idea of accumulating money
If you have a serious aversion to the idea of accumulating wealth this can signal a serious disorder called financial rejection. This sometimes happens to people who’ve won a lottery or received a lot of money due from a settlement. Some people actually feel that earning big money is a sign that you’re either a bad person or exploiting others. The warning signs of this are:
- You don’t feel entitled to money so you give it away
- You turn down opportunities to increase your financial security or to get a promotion
- You earn less money than you should given your skills and education
- You either under charge for your services or work free
- You feel virtuous about not having much money.