There is a growing field called financial therapy that is filled with dedicated professionals (including me) who want to help you have a peaceful and productive relationship with money. As with any new field of study or practice, it can be confusing to understand what a financial therapist does, how one can help you and how to select a professional that is qualified to do this work.
Financial Therapy Defined
Financial therapists have the skills, training and expertise to play a vital role in helping you handle financial stress, uncover emotional roadblocks to wealth accumulation and assist in estate planning and wealth transfers. To date, there is no official certification for financial therapists, though the newly-formed Financial Therapy Association is dedicated to examining this issue and conducting research to support the work being done in this field.
How a Financial Therapist Can Help
A financial therapist can help you in a variety of ways. Here are just a few examples:
Reduce your financial stress. Financial stress is at an all time high in the United States due to the current economic situation. Many people are worried and fearful about their financial security and that of their children. Financial therapy is a great way to learn more about how your current mindset impacts your emotional and financial well-being. By shifting this mindset, you can reduce stress, increase life satisfaction and learn to use money as a tool.
Increase your financial literacy and confidence. A financial therapist can provide you with basic training in money management and referrals to courses, books and resources that will improve your financial literacy and ultimately improve your financial confidence. It is true that knowledge is power. And when you know more about how money works, you will be able to feel more in control of your future and more confident about making wise financial decisions.
Improve your relationships with money. Everyone has a relationship with money that starts at a very early age. This relationship is often the most neglected one in your life. And when important relationships are not nurtured and cared for dysfunctional patterns emerge. Overspending, addiction to debt and money avoidance are just a few examples of how this relationship can go sour. A financial therapist can treat these issues and help you live an emotionally and financially conscious life, free of these money disorders.
Increase your money conversations skills. Talking about money and finances is often a taboo subject in many families and business environments. This silence can result in divorce or business partnerships going defunct. A financial therapist can teach you how to engage in effective financial conversations with loved ones, business partners, clients and other professionals. Believe it or not, talking about money openly reduces stress and brings loved ones and business partners closer.
Increase your income potential. One of the keys to earning more money is having a good working relationship with it. A financial therapist can help you look at your earnings history, examine your money thoughts and beliefs and how they impact your income and work with you to change your money mindset to create more wealth in your life.
How to Select a Financial Therapist
A variety of consultants work in the field of financial therapy. Some are credible and some offer get rich quick schemes that are ultimately aimed at making the consultant rich as opposed to help you with your money psychology. Buyer beware! It is important that you select a financial therapist carefully.
Below are some questions to ask when interviewing a potential financial therapist:
Are you licensed or credentialed in your professional discipline? Psychologists, social workers and counselors hold state licenses in their respective fields and sometime work as financial therapists. Money coaches or wealth coaches can get accredited from the International Coaching Federation based on experience level but they may not have a mental health degree. Being credentialed demonstrates a commitment to be highly trained in the profession and it is important that your consultant has a firm foundation in psychology and success as a behavioral change specialist.
What experience do you have working with in this field? Due to limited formal training available for financial therapists, most consultants learn about this field from working with financial advisors and clients through self-study and on-the-job training. Make sure you inquire about previous experience collaborating with wealth managers, finanical planners, and their clients around wealth issues. Also having a blend of financial knowledge and counseling skills is ideal. Look for something similar to my background – experience in retail banking and working as a commissioned FDIC bank examiner AND twenty years working as a counselor helping people make lasting behavioral change. One without the other means you will may be hiring someone without all the necessary skills to help you reach your goals.
Do you work as a member of a team? In order to best serve you, a financial therapist should work as a member of a team. By doing so, he or she can connect you with other financial services professionals to meet your many needs for education, service and support in this area. While I am a great coach, I am not a banker, a financial advisor or a accountant. Regularly, I connect my clients with high quality professionals in these disciplines. This becomes the clients “financial dream team” and one that allows him or her to reach financial goals and dreams more quickly.
Hiring a financial therapist is a great way to examine your relationship with money, to remove emotional road blocks that keep you from reaching your financial goals and to figure out how you can live a wealthier life.
What questions do you have about financial therapy? Do you get confused between the terms money coach, wealth coach (the term used at KBK Wealth Connection) and financial therapist? What else would you like to know about this growing field?
