Financial therapy could help with money struggles

Money and financial issues can be a big source of stress. Problems with money can bring about overwhelming negative feelings and self-criticism from which it can be hard to bounce back. 

These troubles can also affect relationships and family life, causing tension or arguments. People experiencing any of these issues may benefit from meeting with a financial counsellor and talking things through with them. They will potentially be able to help them cope with the difficult feelings around money and offer ways to ease the stress, treat underlying mental health conditions and identify triggers that lead to troubling behaviour.

Types of financial problems
Money problems come in various forms, and what one person considers an issue, another may not even think about. How we relate to money has to do with our socialisation, so people develop unique beliefs around money. It’s made up of a mix of what we’ve learned from our parents and everything we have discovered in life so far, and is intrinsically tied to emotions whether we like it or not.

“If our parents were terrible at money, we may learn how to be terrible with money,” Australian financial therapist Jane Monica-Jones told Business Insider Australia.

“Or alternatively, we reject that, so we could decide to go our own way with our finances.”

Ms Monica-Jones went on to explain that money is not just numbers.

“We think that money is often just numbers but actually it is far deeper because it’s dealing with issues of survival,” she said.

“If we look at money as a tool for survival, in its basic form it’s a tool for you to put a roof over your head, food in your belly and clothes on your back. If you have issues with being able to manage that tool, then those things are at risk.”

There is no ‘right’ way to earn, spend or save money, so some financial situations that could cause stress include:

  • high levels of debt and insufficient funds to pay off the debt
  • an unexpected loss of income or assets
  • an increase in financial responsibilities
  • differences in spending habits or values between people who share income
  • compulsive spending or gambling
  • bankruptcy or foreclosure
  • poverty.

What is financial therapy?
Financial therapy is a relatively new term, first appearing in America in 2008. In 2015, it was decided that to be a financial counsellor in Australia, a person needed to hold a Diploma of Financial Counselling (or be studying for this qualification) plus a bachelor’s degree in a related field.

The field combines financial planning services and mental health treatment, and helps people reach their financial goals by tackling psychological, behavioural and personal challenges. During financial therapy, clients can start to process their underlying feelings about money while working out a plan for retirement, savings, investments and other goals.

There are two primary types of financial counsellor: those who come from a financial planning background and add counselling competencies, and those that come from a counselling background and add financial competencies.

Financial planners who enter into financial therapy understand that you can make the perfect plan on paper, but hang-ups, anxieties and fears around money can all make that plan fall apart.

Counsellors already have experience in tough areas such as trauma, addiction, abuse and self-esteem issues that could cause excessive spending. Entering into the financial therapy field allows them to gain the knowledge they need to be able to advise on financial topics that could be related to mental health issues.

Clients can ask to see the qualifications of prospective therapists and choose the best fit for them.

How to know if you need financial therapy
Think of a financial counsellor as a case manager for your debt, budget, retirement plan or other financial issues like chronic over or underspending. A counsellor is removed from the situation personally, so they can objectively see what the problem is and what needs to be done to fix the issue or change the behaviour.

Ms Monica-Jones shared some examples of when you might need it.

If you are overspending and can’t see a way to get it in control, or you’re living pay day to pay day and don’t understand where it goes, financial therapy may help. If you’re experiencing chronic under-earning, it may be down to your circumstance but, in some cases, it may be that you undervalue yourself and you stop striving for greater success.

Financial therapy can also help if you’re in ‘financial chaos’, which ranges from not knowing how much money you have and how much you need for the future, to consistently missing bills and accruing late fees and interest on credit cards.

“We know that mental health issues, of course, can be prohibitive to managing money,” Ms Monica-Jones said. “But also having issues with money can affect our mental health, so they’re symbiotic.”

This form of counselling can help people change the way they think and feel about money and, perhaps most importantly, change negative behaviours. It gets right to the heart of your financial attitudes.

Where to start
The first thing Ms Monica-Jones advises is to understand that we’re all human. “Most of us were not taught how to manage money and we are often not taught how our psychological socialisation and behavioural issues will affect our relationship with it,” she said. “So, give yourself a break.”

The next step is to become curious about how your situation can be handled, whether that is researching online, reaching out to friends and family, or making an appointment with a financial counsellor.

A lot of it comes down to having conversations that aren’t, unfortunately, that common in our culture. For example, why is it not yet normal for colleagues to discuss their pay?

There are currently 850 financial counsellors nationwide and the National Debt Hotline can help connect you to one.

Remember, financial anxiety isn’t reserved for the unemployed. It can easily plague those who have money at the moment but are worried about the future. And, regardless of where you fall on the socio-economic spectrum, money can be difficult to talk about – even in a regular therapy session.

Had you heard about financial counselling before? Do you think it could help in any aspects of your life?

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YourLifeChoices Writers
YourLifeChoices Writers
YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.
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