top of page
  • Writer's pictureAmy Kay Cole, PhD

Financial Therapy

Updated: Jun 18, 2023

Psychologists have been studying how people manage finances for years. Financial stress can lead to guilt, self-loathing, even depression and chronic anxiety. Most Americans are in a precarious financial position regardless of whether they have a good income. Even families who earn more than the average $55,000 per year can live paycheck to paycheck. According to researchers, most Americans can’t handle a $400 emergency without using a credit card. In a study by the American Psychological Association, 72% of Americans reported feeling stressed about money at some point within the last month. Student loans, heavy debt, children heading toward college, and the simple desire to have a vacation can make people feel hopeless. Saving for retirement can seem absolutely impossible when trying to meet the demands of daily life. Financial worries are very common in clients seeking counseling even when finances were not the reason for pursuing counseling.

Psychologists have studied why people get into financially vulnerable positions and it turns out there are many different roads to that stressful position. Retail therapy is the term often used for people who purchase items as a way to temporarily elevate their mood. People can get into dire financial situations by purchasing large items like boats and cars or numerous small items such as clothing or eating out regularly. I have come across underspenders who have so such anxiety about spending money they become virtual hoarders of money. While money problems differ, they all come from our psychological histories. Some people get into financial trouble by continuing to provide financial support for adult children. Many adults live beyond their means and deal with overexpenditure by using their credit card or getting bailouts from their parents. I have worked with many brilliant, successful people who put their head in the sand when it comes to money. Why? They feel powerless to change it. Our relationship with money begins in childhood and is influenced by our parents’ relationship with money as well as with our own early experiences. Financial therapy examines those early experiences to help clients understand what holds them back and limits their control of finances. That understanding is a necessary part of gaining control over your finances.

Financial therapy begins with an understanding of your early perceptions of money. The scarcity or excess of money in one’s childhood is examined. Some people are raised having anxiety about spending money while others are raised to never give money a thought. You have a psychological history with money, you just might not know exactly what it is. Once you understand that history, you can start taking control over your financial future. If you are unable to make those connections yourself, consider contacting a psychologist or counselor to put yourself on the road to financial success.Photo by Travis Essinger on Unsplash

Joplin psychologist

9 views0 comments

Bình luận

Bình luận đã bị tắt.
bottom of page