What Is Financial Therapy?

What is financial therapy - and is it something you can benefit from?

A new buzz term is making it’s way around: “financial therapy”. But what is financial therapy and is it something you can benefit from?

Financial therapy is a new field that focuses on the intersection of financial health and traditional therapy. We know that there is a real connection between emotions and money, but currently, support for the two worlds are separate.  We talk with a financial advisor about retirement goals an  with a therapist about relationships. Financial therapy brings those two things together in one conversation.  

Some financial therapists come to this form of work from a financial planning background. Some come from a counselling background. There is an association and some training programs to equip financial therapists with the relevant skills. With that said, it still isn’t easy to find a practitioner.  


What would you go to see a financial therapist for?

Take the example of a married couple, where the wife expects a certain lavish lifestyle. The husband is dealing with a $2 million tax lien, and the couple are unable to continue this lifestyle. This is a complex issue that includes both relationship dynamics and financial pressures. Financial therapists aim to unravel these complexities and help you understand what your relationship with money is, rather than just how money works.

Clients do a lot of homework to help them untangle their emotions with money.  We feel something with every transaction we make, and understanding that can be very empowering both emotionally and fiscally. If you’re the type of person who agonizes over spending an extra 2 dollars on a fancy coffee, you know what we mean. 


What is SWAN?

SWAN, standing for “sleep well at night” is a very simple concept: how do you need your financial life to go so that you can sleep well at night? Everyone’s criteria for this is different, which is why i’s important to get a personalized approach. For some people, an emergency fund of three months of mortgage helps them feel at ease. For others, this runway may need to be three years. Figuring out what your SWAN is can be super important.

There is also a focus on healing.  Say you had a tough childhood and money was always an issue.  Some people want to ensure that they never have those feelings again, so they are constantly spending money to outrun them.  Other people, with the same upbringing, would never spend a cent.  It is about healing the issues from childhood and then the client can look at spending or saving in a new light.


How can financial therapy help those who are not neurotypical?

There are people who are “neurotypical” and people who are not. One example is people with ADHD – Attention Deficit and Hyperactivity Disorder. The stereotype of ADHD is that of a hyperactive boy, which is inaccurate and harmful. Girls can have ADHD, it can manifest as inattention, not hyperactivity, and it is present in adults too. ADHD can result in impulsive behaviour, trouble focusing or what’s called “emotional dysregulation” where you get upset more easily than other people.

If you’re an adult with ADHD, and experience impulsive behaviour, you might find yourself overspending online.  If you have trouble focusing, getting your taxes done can be debilitating.  The advice isn’t “Do your taxes”.  The advice is to get support for your ADHD. That could look like therapy, medication or accommodation, which would entail someone else taking care of your taxes.


How do other mental health issues tie in?

We are in a time in which anxiety and depression are more pronounced than ever before. There are no easy fixes for crushing these emotions in such unprecedented times, particularly for those who are dealing with an underlying condition.  In fact, trying to apply an easy fix can just make it worse.

This is huge, and people need to take care of their mental health as a part of taking care of their financial health.


Financial therapists can’t just be found online, so how do people take steps towards taking care of their mental and fiscal health?

The most important thing is to advocate for yourself. If you have trouble following through on monetary or saving commitments, flag that to a financial advisor. With a traditional therapist, it might be worth saying “I think some of my angst is connected to my relationship with money”. It may seem difficult, but it is totally possible to take responsibility for your financial life without taking blame, shame, guilt or credit for your financial actions.

Hopefully, this article helped open your eyes to the link between finances and mental wellbeing, and that you feel more empowered to take control of your fiscal life.