Book lovers, don’t hate me … there is such a thing as having too many books.
By the time my son was 2 years old, he had amassed a collection of hundreds of them, many in plastic tubs or taped cardboard boxes.
Yard sales. Library clearance events. Flash sales at the local book store. There I was, cash in hand, looking for books I thought my son would love.
As embarrassing as it is to admit, my interest in purchasing books wasn’t really about my son. It was about mom guilt. You see, my son was born in China, and it wasn’t until a little over a year later when my husband and I moved back to the U.S. my fear about him being “behind” on his English language skills manifested into an almost obsession with alleviating my guilt by getting books so he could catch up.
Luckily, I’ve since curbed that obsession, but it doesn’t mean my mom guilt has gone away. And every time I have this burning desire to spend money or swoop in and help him (yes, he’s 4 years old, but there are many things he can do himself), I remind myself that my goal is to raise my son into an independent and confident adult.
Apparently, our desire to give our children the best in the world can have some dire financial consequences. When they become young adults, our children might not have the coping skills to strike out on their own. Their lack of financial savvy (or lack of independence) can then put our financial lives in jeopardy.
There’s nothing wrong with wanting the best for our children. However, for us to truly help them, we need to take a careful look at the consequences of our financial and parental behaviors.
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Having the best intentions
Let’s be clear. None of us is a bad parent. Even though my book shopping spree started out with the best of intentions, I knew that if I didn’t curb that behavior, my son could have used it for his own gain down the line.
Lindsay Bryan- Podvin, a social worker turned financial therapist based in Michigan, suggests that parents can start out wanting to provide generosity and stability to a child, but that can snowball into an unhealthy behavior loop.
“Parents have an instinct to protect their children from danger and failure,” Bryan-Podvin says. “The intention is genuine, by swooping in and paying for their child’s first month’s rent, for example, can mean the child learns to depend on you.”
My son is 4, so he’s not ready to leave the nest quite yet. However, I know that if I give in to my guilt and use money to show that I care, he’ll learn — even at a young age — how to get what he wants. Worse, he’ll never even leave the nest.
Dr. Alex Melkumian, a financial psychotherapist practicing in Los Angeles, recalls a client, who at 26 years old, doesn’t seem to have the coping skills to be a fully independent adult.
This client’s parents got divorced when he was young. The mom felt guilty for not giving him a stable father figure, so she tried to solve his challenges when she’d noticed he’d get anxious. It’s gotten to the point that she’s still financially supporting him now that he is an adult by letting him move in when he lost his job and allowing him to stay for months.
Melkumian adds that children are smart and can pick up on your emotional cues. When having a practical conversation about money — whether it’s about providing for their living expenses or buying the latest toy — your child can sense more than just the surface level conversation.
“Shame and guilt can come up in conversation, and your child is keen to tap into that,” he says. “It’s a survival tactic, so of course, the child will want to say whatever it is to get what they want.”
Working through guilt
Parental guilt and desire to be there for your children won’t go away. Yet, you’re concerned about raising a child that may be too dependent on you, emotionally or financially. What’s a parent to do?
The solution is simple but not easy: Work through your guilt and have a plan in place.
“When you start putting boundaries in place, you really need to think hard and understand whether what you’re doing is coming from a place of unconditional love or enabling,” Melkumian says. “It can be hard to distinguish both in the moment, so that’s why it’s important to have responses ready that you’ll anticipate from your child.”
For example, Melkumian suggests coming up with honest responses as to why you’re saying no. If you decide to stop purchasing items for your child, he or she knows that an answer such as, “I can’t afford it,” isn’t going to cut it. Or if your grown child is at home and you want him to thrive on his own, work on gradually taking away certain privileges so the child can practice being independent.
Showing you care without money
Money is merely a tool, and, in this case, it’s being used to show affection toward a child. However, there are plenty of ways to show that you care without money. That way, you as a parent can bring intimacy and love to deepen the relationship.
Simple actions such as scheduling a walk in the park with your kids can do wonders. Or even something as small as a secret handshake each time you say hello or goodbye will show your children you’re thinking of them.
As for me, I still use books to spend time with my child. The difference is that I’m not buying them each time I leave the house, nor does my son expect a new book each time he sees me. Instead, we head to the library each Saturday, where he picks out a book and shows me the letters he knows.
I’m very tempted to read the book for him or buy one if he finds one he really likes, but I keep my raging mom guilt in check. After all, it’s the routine of going to the library and spending time together we both cherish. I don’t want the act of buying an item to get in the way of it.
Sarah Li Cain is a freelance personal finance, credit and real estate writer who works with Fintech startups and Fortune 500 financial services companies to educate consumers through her writing. Her clients include LendingTree, Transferwise, Discover and Quicken Loans. She’s also the host of Beyond The Dollar, where she and her guests have deep and honest conversations on how money affects our well-being. Opinions are those of the author or the person interviewed.
Article published on Milk & Honey by Jackie Lam
When Bethany McCamish’s fiancé wanted to put a complete halt on going out on dates for the sole interest of saving money, she was not on board. In fact, her partner’s new agenda to ruthlessly save kind of stung.
“I’m all about having fun, connecting with people, and making memories,” says McCamish, a freelance designer and writer in her mid-20s. “When we go out, it supports our relationship.”
The reason for this savings shake-up? Her partner wanted to reach financial independence by age 40.
For the unaffiliated, FI/RE stands for “Financially Independent, Retire Early” and is when one reaches a point where they have enough saved never to work for money again.
In recent years, this movement has reached a fever pitch…and seems to only be growing. Early FI/RE heroes include Peter Adeney, endearingly known as Mr. Money Mustache. Adeney and his then-wife retired in 2005 at the age of 30 after working, saving for eight years, and building their net worth to $800,000.
To reach financial independence, you’ll need to hit “your number,” which is the amount you need in assets — think: savings, investments, retirement accounts, passive income from rental property, or a side business — to have the autonomy to stop working for the man.
The basic formula to reach financial independence is as follows: Many get a high-paying job, usually in tech. Live barebones — we’re talking about the basics — so you can live on as little of your take-home income as possible, and squirrel the rest in investments. Find ways to make extra money. Then retire as soon as possible.
In a relationship, however, the FI/RE bug might bite one partner…but not the other.
Hard Money Talks
When McCamish’s fiancé talked to her about the concept of FI/RE, she was not so keen on the idea.
“I thought it was so crazy,” says McCamish, whose partner, an electrical engineer, proclaimed he wanted to cut their Netflix, Hulu, and cable bills to save as much money possible. “I mean it sounds that way if you don’t know the math behind it,” says McCamish.
It can be hard for couples to get on the same page. It took McCamish and her partner a long time to talk about money. And to finally see things eye-to-eye, they had plenty of tough money conversations and fights.
“When it comes to money, partners within a couple often operate on subconscious programming that is based on emotional temperament, financial narratives and beliefs, and cultural dynamics that they’ve brought in to the relationship,” explains Alex Melkumian, a financial therapist based in Los Angeles and founder of the Financial Psychology Center. “So the idea of financial independence or early retirement can have very different meanings to each partner.”
McCamish’s partner, for instance, had a very plush background — his parents bought him everything he wanted, including a motorcycle when he was 14. She, on the other hand, grew up dirt poor in a trailer home.
“When you grow up poor, it can make you a spender,” says McCamish.
There were times when she simply didn’t feel understood. Because her partner earned a lot more than she did, he saw reaching financial independence as being really easy.
“He’s a tech bro, and I’m the underearner,” says McCamish, who is currently building her freelancing business. “He might not understand where I’m coming from, that I might be a little more tight when he comes to money.”
Suspicions that one’s partner is trying to control the money might come into play.
For instance, Terri Bennett turned into a FI/RE aspirant when she and her husband both started making significantly more money. “I realized I didn’t really know what to do with the extra money because I had never really had any,” says Bennett, who is in her early 40s and is an adjunct professor based in New York City.
When she brought up the concept of tracking every penny to her husband, Gabriel, who is in his late 30s, he found it to be more of a threat to his freedom than anything. He felt as if Bennett was trying to control his spending habits.
“I’m sure it sounded rather punitive to my partner,” says Bennett. “He was thinking, ‘Hey, I just worked my ass off to get this great job, and you want me to live like I’m broke? And on top of that, you also want to know how I spend every dollar coming in?’”
Bennett wasn’t trying to control the finances in the relationship; she wanted that money to achieve other goals, such as early retirement. For instance, she stopped spending a lot of money drinking out.
“So, if a colleague asked me to go to happy hour and I declined, I put $20 right away into my savings,” says Bennett. “Or, if I suggested having a few beers at my apartment instead of the bar, I would text myself the $14 difference of drinking at home.”
When Bennett’s husband Gabriel could see that the changes his wife was making was paying off, he could see that she really wasn’t denying herself at all, just that she was being more intentional.
Time Will Only Tell
It could take years until you and your partner see eye-to-eye about your savings goals.
“Being on the same financial page as your partner takes clarity, willingness, and most importantly, compromise,” says Melkumian.
It was a random night during the week when Bennet and her husband didn’t have any food in the fridge and went to a nice-but-overpriced meal.
“It was decent food, but not memorable, necessary, or gratifying,” says Bennett. “I remember saying something like, ‘See — I’m not all about never enjoying ourselves or never splurging or never having nice things, but I think if we were conscious of all the money we spend on mediocre experiences, it would add up to funding things that were much more interesting or consequential.’ And I think of that meal as a turning point because when he was paying the bill he was feeling the same way.”
For McCamish and her partner, they found a happy medium. They go out on dates that are free or low cost, such as hiking, camping, and going to the movies or concerts only if they are free. The couple also go on weekly money dates to talk about their money goals and make sure they’re on track.
“FI/RE was actually the best thing my partner could have stumbled onto,” says McCamish. “Not because of the promise of being able to retire early, but because it really was the driving force that helped us have full money conversations.”
MarketWatch Article by Leslie Albrecht
Financial therapy cuts straight to the emotional core of our bad money habits
When Sheri Reid Grant inherited millions of dollars from her parents, she went into a downward spiral. Six years later, she still gets teary talking about it.
“Everybody thinks money is the answer, and here I had all this money, and all I could think about was not getting it right,” she said.
Grant, 53, was a middle-school teacher in Michigan when she inherited the money.
Paralyzed with fear, she became convinced that any move she made would not only destroy her father’s legacy but ruin her children’s and grandchildren’s future. She suffered through stomach pains, couldn’t get herself out of bed and lost interest in daily activities. The money weighed on her every thought.
Help finally came, not from a financial adviser or a psychologist, but a combination of the two: a financial therapist. The treatment helped her uncover the root of her turmoil: Her father had raised her to believe she didn’t know how to handle money, so the inheritance felt like a trap, something she would never be able to manage.
“If I didn’t have a financial therapist to help me manage the inner chaos and stress, I would have imploded,” Grant said.
And though her circumstances are unusual — few Americans attain her wealth — Grant believes financial therapy can help anyone. Because it isn’t just about how much you have; it’s about your beliefs and feelings toward money. And, boy, do we have a lot of them. Money is, after all, the thing that stresses out Americans more than anything else, according to a 2018 survey — as it has been every year since the American Psychological Association started posing the question in 2007.
‘Only about 20% of financial planning clients respond to logic and education.’
In Grant’s case, financial therapy helped her overcome her paralysis and escape self-defeating behaviors such as refusing to look at credit-card statements or avoiding asking her bookkeeper to pay bills.
“Financial therapy helps me with the emotional and the behavioral side of making decisions around money,” she said.
What is financial therapy?
Financial therapy sits at the intersection of financial advice and psychoanalysis. It’s therapy that helps people uncover the source of emotions guiding their money decisions and, in the process, end self-destructive behaviors related to money.
“A person can benefit from financial therapy when their behaviors are not in line with their values,” said Rick Kahler, a Rapid City, S.D.–based financial adviser whose firm, Kahler Financial Group, has employed for the past eight years a financial therapist who is both a certified financial planner (CFP) and a clinical mental-health counselor. “Another way to say that is when someone is stuck or when someone knows I should be doing this — I should be saving, I should be spending less, I should be paying attention to my retirement — but it doesn’t happen.”
Kahler considers a team that includes both therapists and financial planners to be the gold standard for financial-advisory services.
Though it’s been around in various forms since the 1990s, financial therapy is now poised to become more standardized and more prevalent. Until now, the occupation has been loosely defined, and anyone could call themselves a financial therapist.
The field encompasses a range of professionals — from psychotherapists to marriage counselors to social workers to certified financial planners — all looking to help clients understand the emotional underpinnings of their behaviors around money. Starting this year, practitioners will be able to be certified by the Princeton Junction, N.J.–based Financial Therapy Association as a financial therapist after taking a 100-question exam and meeting requirements including logging 500 hours of experience.
Demand for financial therapy is poised to grow, said Debra Kaplan, a Tucson, Ariz.–based licensed mental-health therapist, speaker and author of “For Love and Money: Exploring Sexual & Financial Betrayal in Relationships.” Kaplan has an MBA and first got interested in the psychology of money while working as a commodity options trader on Wall Street. This past decade of stock-market prosperity has coincided with the rise of a generation that is open to self-reflection, she’s observed.
“This is a generation that is introspective by nature because of wanting a work trajectory that is self-gratifying and satisfying, not just a paycheck,” Kaplan said. “Therefore, financial therapy is perhaps coming into its own at a time that has a demographic that would benefit from what it has to offer: delving into money and work and what it means.”
And as traditional financial planning becomes increasingly automated, with investors relying on robo-advisers and index funds, and talk of artificial intelligence helping clients make asset allocations, Kahler sees a bright future for financial therapy.
“The financial-planning profession gives lip service to the fact that it’s about the relationship,” he said. “I don’t think emotional issues are going away. To be relevant, the financial-planning profession needs to embrace financial therapy.”
The case for financial therapy
After nearly 40 years in the financial-advisory business, Kahler, 64, has come to the conclusion that only about 20% of financial-planning clients respond to logic and education. That small minority will, for example, stop overspending if an adviser tells them to. But, for most people, “it goes way deeper,” he said, and they need more than monthly budgets to change their behavior.
Kahler sees a parallel with dieting. We’re bombarded with information about calorie counts and daily walking steps to stay fit, but most Americans are still overweight. “It’s not about the money,” Kahler said. “The money is a symptom of a deeper problem. Until we get down to that emotional issue, the behavior isn’t going to change. You’re just putting a Band-Aid on it.”
Traditional financial planning is not equipped to address that reality. In fact, financial planners call clients who don’t do what they’re told “noncompliant,” Kahler noted.
A financial therapist, on the other hand, will help someone uncover why they can’t seem to get around to opening those 401(k) statements; why they continually overspend on their credit card, even when they’ve promised themselves they wouldn’t do it again; why they have plenty of money and yet won’t spend any of it to repair their dilapidated house or car; why every fight with their spouse seems to be about the household budget; why they’re losing sleep about money and can’t seem to focus; or why they have a secret bank account they’ve never told their spouse about.
How it works
Tackling people’s issues around money with a financial therapist is different in every case, but it often involves examining a client’s core beliefs about money and how they came to hold them. Do they chase money? Are they terrified of running out of money? Is their sense of self-worth tied up in how many figures are in their salary? Do they avoid thinking and talking about money at all costs? Do they think money is irrelevant? Often the discussion will lead back to childhood, when our parents taught us, either consciously or unconsciously, what and how to think about money.
Those “stories” about money are sometimes called “money scripts,” a term coined by Brad and Ted Klontz, a father-and-son team of financial psychologists. Ted Klontz is Sheri Reid Grant’s financial therapist. One of her money scripts — that women don’t know how to manage money — was reinforced every Christmas when she was growing up in Michigan. Her father, an industrial engineer by training, made his fortune after buying a manufacturing company outside Detroit that made automotive parts. Her three brothers worked for the business, but Grant didn’t. At Christmas, the family would gather to open presents, an event that culminated with her dad opening a box of envelopes and handing out distribution checks to her brothers.
The message — that she didn’t know how to handle money — later fueled her “money avoidance,” which manifested in Grant refusing to look at, for example, credit-card statements. Money scripts may seem irrational to an outsider, but for the person living them they are completely logical. Identifying them helps clients recognize the roots of their money-related anxieties, and eventually, it’s hoped, end their harmful financial behaviors.
There’s no exact formula for helping a client change behavior; financial therapy is more art than science, Kaplan said. But as the saying goes, “If you can name it, you can tame it,” so Kaplan will sometimes have clients make an inventory, in writing, of exactly what they feel when they take money-related actions that they want to change.
A client who was going into debt to lend his friends money because he felt it was his duty to rescue them might write down that when he gives a specific friend money, he feels he’s a good friend; when he doesn’t, he feels sad and guilty. In therapy, that client may come to realize his lending habit is more about his own self-esteem, and Kaplan would help him find healthier ways to foster self-esteem. “I’m not going to reprimand them, but I want them to notice what comes up when they engage in that behavior,” Kaplan said.
‘They thought we were a cult’
The origins of financial therapy date to the mid-1990s, when a leaderless group of financial planners — they came from across the country and first met as a group in Colorado — called the Nazrudin Project began gathering once a year to discuss the intersection of emotions and money. The rest of the financial-planning field balked. “They thought we were a cult,” Kahler remembers. “Planners just did not feel that the financial-planning profession had any business mucking around with emotion.”
Compared with the country’s 85,000 CFPs, the Financial Therapy Association’s 300-plus members, including 32 outside the U.S., form a small, but rapidly growing, group of practitioners.
There is still some debate about the best way to bridge therapy and financial planning. Financial therapists now come from one of two “home disciplines” — either the financial-planning field or mental-health counseling. But a certified financial planner who offers financial therapy is not equipped to treat people coping with serious mental-health problems, and a psychotherapist shouldn’t give investment advice, said Alex Melkumian, a Los Angeles–based licensed marriage and family therapist who offers financial therapy.
“For your money, you want a fiduciary,” Dr. Melkumian said. “For your emotional health, you want a licensed psychologist or therapist who knows how to treat the diagnoses you have and respects confidentiality.”
Therapists should not be handing out financial-planning advice or telling clients what investments to buy, he said. Clients can idealize their therapists and try to please them. “Imagine if I’m saying you have to invest in this particular fund, or this is a strategy that will work for you 110%, and then it doesn’t work,” Melkumian said. “There would be resentment between them and me as the therapist, and it would cloud the treatment and make it ineffective.”
Some financial therapists post disclaimers explaining they can’t treat acute mental-health disorders; others say upfront that they won’t give investment advice. One possible solution to this conundrum is to have therapists and financial planners work side-by-side with the same clients, a strategy that Melkumian and Kahler, among others, advocate.
“When you start playing in the area of mental health, ethics and transparency and intention is so important,” Kahler said. “People are more vulnerable about money than anything else, so it absolutely screams for integrity from the providers.”
Under the Financial Therapy Association’s new certification program, certified financial therapists will be fiduciaries and must adhere to an ethical code that includes avoiding “controlling financial elements of the client’s life that may interfere with doing what is in the client’s best interest.” They won’t be allowed to sell financial products.
Does financial therapy work?
The field is so new that there hasn’t been a lot of research on its effectiveness. One 2018 study by professors at Kansas State University found that 13 couples who were taught a “love and money” curriculum — techniques similar to what they might encounter in financial therapy — felt happier and less stressed about money afterward, and reported significant reductions in money-related stress when they were interviewed three months later.
But true-believer clients like Sheri Reid Grant don’t need research to convince them of the benefits.
“The financial issues I struggle with are universal,” Grant said. “The only difference is a few zeros at the end of my net worth.”
She said therapy can be emotionally taxing, but she sticks with it in part because of her children: “I feel a huge responsibility to break the chains of family dysfunction around money instead of passing them on to my kids.”
Money Problems? Here’s How Financial Therapy Might Help.
As a marriage and family therapist, Ed Coambs has a knack for open and honest conversation. In his practice in Charlotte, North Carolina, he facilitates communication between his clients — many of them couples — and prioritizes it in his own life.
But he wasn’t always so attuned to his own emotional needs. When Coambs and his wife first got married, he considered becoming a financial planner. But then he started seeing the same money issues creep up in his own life.
For one, his wife is the breadwinner in his family, and though logically he knows that dynamic shouldn’t bother him, it was still having an effect on his self esteem and relationship with his wife, he tells CNBC Make It.
He switched career paths to counseling but says learning more about psychology and helping others wasn’t enough to alleviate his own emotional distress. He was still experiencing anxiety, shame and fear in his financial life. That’s when he decided to seek out help himself from a professional specializing in financial therapy.
“While I externally would say that I have no problem with women earning more than men, that ended up not being my internal experience,” Coambs says. “What I have come to accept and make peace with is that, like many people, I internalized very conflicting views about the roles of men and women, work and money.”
He says working with a financial therapist has allowed him to process his emotions in a non-judgmental space. Feelings of shame, anxiety and fear related to money have decreased, he says. At the same time, he feels more grateful and safe in his financial life.
“I wanted to delve through the deeper layers about what I’ve inherited about how a man should be a provider, a man should earn more than a woman,” he says. “Financial therapy starts to melt away some of the stress. It really is a safe space to explore your personal relationship with money.”
What is financial therapy
Financial therapy is a relatively new field that combines financial planning services and mental health treatment. Megan McCoy, director of the Personal Financial Planning Masters Program at Kansas State University and a member of the Financial Therapy Association’s (FTA) Board of Directors, tells CNBC Make It that clients get the best of both worlds when they see a financial therapist: They can begin to process their underlying feelings about money, while working out a plans for retirement, savings, investments and other goals.
“Financial planners who enter into financial therapy understand that you can make the perfect plan on paper, but if you have hang ups about money, anxieties and fears about money, you’re not going to make that plan work.”
Megan McCoyKansas State University
McCoy adds that there are two primary types of financial therapists: Those who come from a counseling background and add financial competencies, and those who come from a financial planning background and add counseling competencies. Clients should pick the one that better fits their specific needs.
“Financial planners who enter into financial therapy understand that you can make the perfect plan on paper, but if you have hang ups about money, anxieties and fears about money, you’re not going to make that plan work,” McCoy says.
Though money and emotions have been tied together since the beginning of time, financial therapy as a practice is so new — McCoy says it didn’t really start developing until 2008 — that 2019 is the first year that financial therapists can get certified with the FTA. The certification ensures they are able to help clients with relationship disputes and disagreements, and depression related to finances.
Rick Kahler, a financial planner and therapist, is a pioneer in the field, and co-founder of the FTA. In the 1990s, he and a group of researchers studied the psychological and emotional aspects of money.
“What we found is 90% of financial decisions are made emotionally,” Kahler tells CNBC Make It. “The problem is that financial advisors and planners are not trained in behavioral change or communications, and therapists are not trained in money. There’s a hesitation in both camps to add competencies in the other.”
That’s all changing with financial therapy.
Where money and emotions meet
Dr. Alex Melkumian, founder of the Financial Psychology Center, tells CNBC Make It he was inspired to get a clinical psychology doctorate with an emphasis in financial therapy after practicing family therapy in Los Angeles at the beginning of the Great Recession. Many of his clients, he says, were consistently bringing up money worries and financial stress, and he wanted to be able to talk with them more effectively.
In fact, money is the number-one source of stress for Americans, according to a report from BlackRock. And while everyone knows that they should save more and watch their spending — “just like everyone knows not to overeat,” Melkumian says — there is often a disconnect between what they know they “should” do and what they actually do.
“Everybody knows to save for a rainy day, but it doesn’t happen,” Melkumian says. “So why doesn’t that happen? A lot of times, it’s tied to emotions, an emotional journey. In our culture we think of money as rational, but human beings are not rational.”
In our culture, we think of money as rational, but human beings are not rational.Dr. Alex MelkumianFounder, Financial Psychology Center
“A lot of it comes down to having conversations that aren’t, unfortunately, that common yet in our culture,” Melkumian continues. “We think of money as strictly transactional, but we don’t consider all of the layers.”
Coambs, the Charlotte-based therapist, says that financial therapy can help people recognize that experiences they had growing up that may seem unrelated to money — such as their parents’ divorce, an addiction or some sort of assault or other trauma — might actually inform their financial habits on an subconscious level. Such adverse developmental experiences, he says, have a “profound impact on people,” often times for life.
“If you recognize that you have problematic financial behaviors and you’ve tried on your own to get them right and you haven’t, that’s not on you,” Coambs says. “Therapists help you understand the mind, how it shapes and grows.”
Working out family issues
While a traditional therapist might not have the proper background or ability to talk through money issues — Coambs and the other professionals interviewed for this story all said that traditional therapists tend to avoid the topic of money — it is a major source of discontent and stress within relationships of all types, and many couples don’t want to have money conversations because they consider them too difficult or embarrassing.
But open communication is the foundation of any healthy relationship. It’s important, then, for financial therapists to work with both partners and get both perspectives, Coambs says.
“A lot of our distress about money starts in interpersonal relationships, where difficult emotions emerge but never get dealt with,” Coambs says. “Positive emotions get minimized or dismissed, making it hard to experience joy around money and what it helps you do.”
Once each partner is aware of the other’s story, the financial therapist can help the couple process and move forward. A skilled therapist, Coambs says, will be able to meet a client’s experiences with empathy, draining difficult emotions and creating “space for the pleasurable emotions to emerge.”
When to hire a financial therapist
Kansas State University’s McCoy says rates for therapy and the amount of sessions needed vary, just like with a traditional therapist. She encourages people to look on the FTA’s website for qualified therapists in their area, or search on Psychology Today for professionals specializing in money or finance. Financial planners tend to be more expensive, while a therapist might be able to accept insurance. People interested in seeing a financial therapist should look for a “fee only” practitioner.
Kahler, the co-founder of the FTA, says that it should be clear to both the client and the professional if the sessions are working and they are making progress. Financial decisions, like saving more, for example, are concrete and measurable.
“The process may look to be really slow when you’re working through emotional trauma, and then all of a sudden if you get that emotional piece resolved, boom here comes the financial proof,” Kahler says.
McCoy believes all couples would benefit from seeing a financial therapist, particularly before they get married ( “divorce is way more expensive than therapy,” she says), as would anyone who is routinely stressed out or anxious about some part of their finances.
“If at the end of the day you just need a mutual fund and need to get your portfolio established, you should see a certified financial planner,” McCoy says. “But if your issue is that you don’t trust your spouse with money or every time you think about money you break out in sweats, you should see a mental health professional,” or trained financial therapist.
For more articles by Alicia Adamczyk:
Why wealthy parents who bankroll their adult children are hurting them
For some wealthy parents, the pressure to extend their social and financial status to their adult children can be overwhelming.
The recent college admission scandal revealed shocking things parents were willing to do to secure spots at top schools. But those same motivations drive some parents to bankroll their kids’ lives into early adulthood, often to the detriment of the family.
“How many times have we seen in wealthy families where the breadwinner is so inundated with making a living and providing for a family, that love, intimacy and closeness are shown through financial means,” says Dr. Alex Melkumian, a psychologist and financial therapist.
Support that keeps a young person living above their means can undermine their independence and create deep insecurities.
Dr. Bradley Klontz, a psychologist and certified financial planner who researches money disorders, calls this “financial enabling.” Often arising between parents and their adult children, financial enabling involves extended financial support that not only affects the enabler’s finances, but can also cause lasting damage to the young adult.
“The delay of financial independence is associated with a lack of purpose, creativity, drive — it can be extremely crippling,” says Klontz. And that’s to say nothing of the damage caused to the family relationships. “People then have a tendency to resent the source of their money, even while they rely on it.”
Parenting without enabling
When children grow up with the expectation of a wealthy lifestyle, it becomes harder for them to maintain that lifestyle once they are on their own. And the parents feel pressure to step in and help.
“It has to do with growing up with one identity and becoming an adult and expecting to continue on that identity,” says Tara Unverzagt, a certified financial planner in Los Angeles. “You don’t have the job to support it. Your parents have the income.”
Unverzagt works with families struggling to find the line between supporting their children and offering too much help. All of it starts by talking about money, and making sure kids have realistic expectations.Make sure you are setting your kids up for a lifestyle they can sustain. “Because if they can’t, you’ll sustain it, and it will bleed you dry and impact your own retirement.”
She says that many ultra-wealthy parents can afford carrying a child’s expenses into adulthood but others end up hurting their own finances by supporting their kids. “They feel they should be able to do these things for their kids endlessly and afford them,” she says. “But if you continue to do it, the money can run out really quickly if you’re not paying attention.”
And that’s to say nothing of the message sent to the adult child.
“You’re telling that child, she can’t do it on her own,” says Unverzagt. “Some moms and dads want her to feel that way, that she can’t live financially without that parent. You should be striving to have an independent adult.”
Unverzagt started talking about budgets with her own three children, now all recent college graduates, when they were two years old.
“I feel it is your job as a parent,” she says. “A 4-year-old’s money mistake is nothing. Have them make a bubble gum mistake instead of buying a house at 25 they can’t afford. Are you going to enable those bad financial decisions at 24 and 30?”
Breaking the enabling cycle
Having unlimited options can be paralyzing to some young people.
“Having too many options can be overwhelming,” says Meghaan Lurtz, president of the Financial Therapy Association, who has a PhD in personal financial planning. “It happens to wealthy children a lot: I could have 1,000 careers, I could have any car I want. I can’t pick one. They appear to be the laziest bums on earth because they have so many options in front of them, it is paralyzing.”
She says that a strategy to aid in moving forward is to put boundaries on endless opportunities.
She advises parents to be clear about their expectations of adult children. “Tell them, you need to have a job, even if you’re a teacher and making $30,000 a year. You need to do something, and have purpose.”
Working with a financial therapist, a counselor who can help people think and feel differently about money, can be helpful to people in that paralyzed state, she says.
It’s okay to want your children to have the best, she says, and many people have the resources to do it. But the key is to give kids the tools to achieve it on their own.
“It is an important step to talk about what it is like to have money and the responsibility that comes with it,” Lurtz adds.