What is Financial Therapy?

Healing Your Relationship with Money

Have you ever avoided looking at bank or credit card statements because you feel anxious or overwhelmed?

Does thinking about your credit card or student loan debt bring up feelings of shame, guilt, or hopelessness?

Are you grappling with paralyzing indecisiveness about big financial decisions like buying a home or investing because you lack confidence in your decisions?

If any of these situations resonate with you, you might benefit from working with a financial therapist.

In this post, I’ll define what financial therapy is, why it is important, and discuss who can benefit from financial therapy.

What is Financial Therapy?

Financial therapy is a type of therapy that helps people improve their financial health by addressing the emotional and psychological factors that affect their financial behaviors. Much like other specialized areas of therapy such as eating disorder therapy or sex therapy, financial therapy is a specialized area of psychotherapy that focuses on helping people develop a healthy relationship with money. A financial therapist is trained specifically to help you identify and address the root causes behind your financial behaviors, so that you can make sustainable changes that allow you to pursue financial success.

While they may sound similar, a financial therapist is different from a financial advisor/planner. In fact, many people who choose to work with a financial therapist do so because they have tried working with a financial planner but have found themselves unable to stick to the plan that they develop. For example, many people have fear around saving and investing, and this fear keeps them from opening an investment account and putting money in it. A financial therapist can help you identify what might be the root cause of that fear – Is it a lack of self-worth, that you don’t believe that you deserve a financially secure future? Is it the fear of the unknown? Fear of making a mistake (perfectionism)? Or is it rooted in a distrust of government systems? A financial therapist will work with you in a judgment-free space, to help you identify the reasons behind your financial hangups and then equip you to be able to move forward in a way that aligns with your values.

Why is Financial Therapy Important?

Financial therapy is important because money is emotional.

Historically, the personal finance industry has focused on providing financial literacy and education, but it has largely ignored the psychological and emotional components of making good financial decisions. Although financial literacy is important, it is just one part of achieving financial wellbeing. Understanding your psychology and emotions around money is essential for you to make sustainable changes that can lead to financial success.

As mentioned above, money is inherently emotional. In fact, research shows that 90% of financial decisions are made in the emotional part of our brains. Although we’d like to think that our financial decisions are made in the logical portion of our brains, we typically use the logical part of our brain to justify the emotional decisions we make. For example, think back to the last time you signed a new lease or bought a new house. Did you make that decision purely based on logic? Probably not – which is a good thing! You likely factored in your feelings of safety, pleasure, and pride of ownership, among others.

Financial therapy helps you bridge the gap between your emotional wellbeing and your financial wellbeing. Addressing your psychology and emotions around money allows you to integrate healthy financial behaviors in a sustainable way that supports your overall wellbeing.

Who Can Benefit from Financial Therapy?

Financial therapy is for anyone whose mindset or emotions around money are preventing them from taking action to improve their financial situation. For most people, their relationship with money is one of the last areas of their lives that they have yet to explore. It is extremely common to struggle with feelings of depression, shame, anger, or anxiety around money. These feelings usually stem from internal beliefs we hold about money. Our families, communities, and society at large hand us a lot of default beliefs about money and success. A financial therapist can help you unpack your beliefs about money and help you identify if those beliefs are helpful or true.

Working with a financial therapist can help you identify and address the root causes behind your financial behaviors and help you build a positive relationship with money by using evidence-based therapeutic practices. A financial therapist will also help you define your personal beliefs and core values and help to ensure that your financial goals align with these values.

If you have been feeling as if you can’t quite break through old financial habits or behaviors, or consistently find yourself overwhelmed with emotions around your finances, financial therapy is likely the missing piece you’ve been looking for.

Want to work with a financial therapist who is passionate about helping people heal their relationship with money? If you are ready to work with Haylie of Castillo Financial Therapy, click here to learn more, or get started with a free consultation call.

*Haylie Castillo, LICSWA, CFT-1 is not a clincian at Green Coast Counseling and be reached thought her practice, Castillo Financial Therapy.

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