- Financial therapy helps people understand the emotions driving their financial behaviors and develop a positive money mindset.
- Money touches every part of our lives, so it's not surprising that it can drive anxiety.
- Careful you don't confuse financial advisors with financial therapists.
Everyone has money concerns—even successful actresses like Zendaya.
In a profile for British Vogue, the Euphoria star opened up about her anxieties related to finances.
“My mother’s a saver, and so I try to keep that in mind,” she said. “Then my dad’s like, ‘You know, you can’t spend it when you’re dead’—kind of thing. I’m somewhere in between…. The hope is to have a career where you can be in a position, financially, to just do things you want to do because you enjoy the work and not have to worry about the other things…. But I’m always like, ‘I will always need to work.’ Because if I don’t work, then everything can be gone tomorrow.”
The fear of overspending or even underspending is not uncommon, according to Magdala Adeleke, a certified financial therapist and founder of Financial TheraPeace.
“Underspending is a problem because some people—we call them money vigilant—they’re about the numbers, but it stems from fear,” she explained. “It’s fear of not having enough, so they’re hoarding their money, and they're not spending it, and some people go to the extreme. And the problem is when you’re at one extreme, like overspending or underspending. You should kind of be in the middle. You spend when you need to and take control of it when you need to.”
Inside this article
What is financial therapy?
These are some of the behaviors that financial therapists like Adeleke tackle daily as part of their practice. Financial therapy is still relatively new but is becoming more prevalent as clients seek help to understand the emotions driving their financial behaviors and develop a positive money mindset. The Financial Therapy Association defines the discipline as “a process informed by both therapeutic and financial competencies that helps people think, feel, and behave differently with money to improve overall well-being through evidence-based practices and interventions.”
Our health and finances are connected. Studies have shown that financial difficulties are the leading cause of stress. A survey conducted by the American Psychological Association revealed that 72% of Americans admitted to stressing about money. A certified financial therapist helps clients navigate these complex emotions.
“Money touches every single part of our lives,” says Adeleke. “We can't do anything without it. It's personal, essential, and vital. It's how we shelter ourselves and take care of our family. So if we're having some issues with money, obviously, it's going to impact our lives.”
Who should seek financial therapy?
She notes that patients experience anxiety and fear related to many money matters. This includes:
Not being aware of their financial situation
Accumulating more debt after becoming debt-free
Hitting a plateau in their debt-free journey
An inability to increase their income
Feeling unworthy of financial success
Handling a sudden windfall of money from an inheritance
“So really anything that has to do with fear around money,” Adeleke says. “It's more than simply, ‘I just don't know how to budget.’ Or it could even be the fear part; fear of looking at money. A lot of people avoid it, and that is why they're in the financial situation back there. And so we also help you to unpack those fears and figure out ‘okay, why are you avoiding it?’”
Financial trauma should not be the only motivating factor for seeking financial therapy. Adeleke believes everyone could benefit from exploring their relationship with money.
You can go to a traditional financial planner or financial coach to sort out your situation and learn how to budget, save and plan.
"But what if you fall off the wagon?" Adeleke says. "You're still making the same decisions, and then you're beating yourself up. You have guilt, shame, and all this anxiety or negative emotions."
If you really want to understand why you behave the way you do, you can change from the inside out and find peace with my mind, she says. That's financial therapy.
How to find a financial therapist
The Financial Therapy Association curates a directory of therapists on their website with information on their background, professional specialty areas and the practitioner’s designations and qualifications. But be mindful that for a fee anyone can be included. Read carefully through the information provided to ensure you have selected a qualified practitioner.
Financial therapists and financial advisors are not interchangeable. While a financial therapist focuses on the emotional and psychological aspects of money management, financial advisors take a more practical approach by helping to create strategies to help achieve financial goals and build wealth. Financial advisors are typically accredited through organizations like the Certified Financial Planner Board or the Chartered Financial Analyst Institute.
“You have to decide which expertise is more important to you or you think would be more beneficial for your situation,” says Adeleke.
Does health insurance cover financial therapy?
Therapy is charged per session and can be pricey. Health insurance coverage varies significantly, so it is essential to contact your provider to determine whether mental health and financial therapy are included in your policy. You should also verify with the selected therapist whether they accept insurance.