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Financial Stress: Manage Your Finances & Improve Your Mental Health

Let’s face it, we all experience financial stress at some point in our lives. Whether it’s unemployment, debt, unexpected expenses, or a lack of financial resources, financial stress can take a significant toll on our mental and physical health, relationships, and overall quality of life. But don’t worry, there are ways to manage financial stress and develop financial resilience.

Financial psychology is a powerful tool that can help individuals understand the psychological factors that contribute to financial stress and develop strategies to manage their financial well-being. By identifying your money mindset, which is the set of beliefs and attitudes you hold about money, you can develop strategies to change your beliefs and attitudes about money and reduce financial stress.

In addition, developing healthy financial habits, such as budgeting, saving, and investing, can increase your financial resilience and reduce financial stress. Financial psychology can also help you build resilience, which is the ability to adapt to and overcome financial setbacks.

It’s important to recognize that financial stress can have negative effects on mental and physical health, leading to anxiety, depression, sleep problems, headaches, and other physical symptoms. Financial stress can also lead to self-destructive behaviors such as substance abuse, overspending, or gambling. These behaviors can further exacerbate financial stress and lead to even more significant problems in the long run.

That’s why it’s crucial to manage financial stress and develop financial resilience. Financial psychology is an effective tool that can help you develop strategies to manage financial stress and improve your overall well-being. So if you’re experiencing financial stress, don’t hesitate to seek help and start developing strategies to manage your finances and improve your mental health.

Financial stress can take a significant toll on your mental health. It’s essential to take proactive steps to manage these emotions and reduce the negative effects of financial stress. Here are some strategies that can help you:

  1. Acknowledge Your Feelings: It’s normal to experience a range of emotions when dealing with financial stress. Don’t try to suppress or ignore these feelings. Instead, acknowledge them, and give yourself permission to feel them.
  2. Identify Your Triggers: Understanding what triggers your financial stress can help you develop strategies to manage these emotions. Is it a particular bill, a particular situation, or a specific person? Once you identify these triggers, you can work on ways to manage your reactions to them.
  3. Practice Mindfulness: Mindfulness techniques such as deep breathing, meditation, or yoga can help reduce stress and anxiety associated with financial stress. These practices can also help you stay present and avoid ruminating on past or future financial decisions.
  4. Seek Professional Help: Seeking the help of a mental health professional can provide you with the necessary tools to manage your emotions and reduce the negative effects of financial stress. Therapy can help you gain perspective, identify patterns, and develop healthy coping strategies.
  5. Prioritize Self-Care: Engaging in self-care activities such as exercise, getting enough sleep, eating a healthy diet, and engaging in hobbies can help you manage stress and promote overall well-being. Self-care is essential to maintaining a positive mindset and keeping your stress levels in check.
  6. Develop a Plan: Creating a budget, developing a savings plan, and setting realistic financial goals can help you gain control over your finances and reduce stress. Breaking down larger goals into smaller, more manageable ones, and celebrating your progress along the way can provide a sense of accomplishment and boost your self-confidence.

Incorporating these strategies into your daily routine can help you manage financial stress and improve your mental health. Remember, managing financial stress takes time and effort, but with patience and persistence, you can develop a healthy mindset and build financial resilience.

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Earning and Inflation

People hear the word inflation and their shoulders drop – no one celebrates when their economy is suffering from inflation. It is a word thrown around quite often in the media as well as our daily conversation sometimes. We know it hurts our wallets and can also influence our mental state; however, that is the extend of what people. Maybe it is a reflection of the lack of financial education that is offered to the public or rather just the fear that is ingrained in people towards finances. Regardless of the reason, it does not stop inflation from affecting our relationship with money, others, and ourselves. But it is definitely possible to maintain a strong and sustainable relationship with all the key factors in having a healthy lifestyle all around – we’re talking mentally, physically, financially, psychologically, etc. Let’s get right into it.

The international monetary fund defined inflation as something that “measures how much more expensive a set of goods and services has become over a certain period, usually a year”.1 In other words, inflation shows how much the prices have increased compared to the previous year. Compared to last year, the U.S. Labor Department published data marking an 8.3% increase since last October.2 But it’s not just in the States, inflation is seen worldwide in 2022.3 Given this information, it is obvious that most, if not all, of us have to deal with the hurdle of inflation. The difficulty surrounding this whole topic is that despite the increase in prices for basic goods, one’s earning rarely increases. John M. Bremen in an article by WTW explain this is because of several reasons. One of them being how wages are sticky.4 This implies the difficulty in increasing and decreasing wages despite societal changes and therefore the lack of changes when it comes to inflation. The mismatch between workload / income and good prices can foster a toxic and unhealthy relationship with money, potentially leading to behaviors such as hoarding.

On the other hand, mismanaging of finances and emotions especially during a financially tight time can affect the relationship with the loved ones such as family members, and partners. The financial underlying reason can vary from case to case, a common one stems from the inability to acknowledge and respect each other’s emotions associated with money. Some may claim that finances and emotions should be completely separated and should not interact. Not only is it ignorant to the nature of humanity, it is rather impossible. Feeling a certain type of emotion is inevitable, especially in times of stress. The problem does not lie in the mere fact that we feel those things, but rather the way people go about it.

This is easily applied to one’s relationship with oneself as well. Unlike relationships with others, a relationship with yourself is a unique one where it acts as a foundation for many other relationships. The distinctive understanding and realisation about ourselves stem from this unique relationship and it is crucial to not let money be in the middle of that. Many struggle with detaching self-worth from money as the social hierarchy is comprised of systems where money plays a large role in. The mismatch between earning and what one can afford can lead to chronic stress and anxiety, on top of other physiological symptoms.

When people say not to stress about money but there’s so much to stress about, what is there to do? Although there isn’t one magical solution to have stress disappear, managing one’s emotions can promote financial behavior that is aligned with your values and beliefs. By doing so, it creates a neutral outlook on money while negating the hostility that it potentially can bring.

References:

 

  1. Fernando, J. (2022, October 21). Inflation: What it is, how it can be controlled, and extreme examples. Investopedia. Retrieved October 25, 2022, from https://www.investopedia.com/terms/i/inflation.asp
  2. Current US inflation rates: 2000-2022: US inflation calculator. US Inflation Calculator |. (2022, October 13). Retrieved October 25, 2022, from https://www.usinflationcalculator.com/inflation/current-inflation-rates/#:~:text=The%20annual%20inflation%20rate%20for,at%208%3A30%20a.m.%20ET.
  3. Buchholz, K., & Richter, F. (2022, October 20). Infographic: The global inflation outlook. Statista Infographics. Retrieved October 25, 2022, from https://www.statista.com/chart/27480/projected-annual-inflation-by-country/
  4. Bremen, J. M. (2022, April 12). Why salary increases do not keep pace with inflation. Willis Towers Watson. Retrieved October 25, 2022, from https://www.wtwco.com/en-CA/Insights/2022/04/why-salary-increases-do-not-keep-pace-with-inflation#:~:text=Wages%20are%20sticky,before%20determining%20long%2Dterm%20implications.

 

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Inflation is Making Our Financial Mental Health Deflate

State of the economy/inflation

What a world we live in – the second the media mentions inflation, we become hyper aware of every one of our spending habits, for right reasons. Disproportional increase in cost and spending is stressful for many, especially those living within a tight budget. What makes it even worse is the uncertainty that is at the bottom of all of this. The lack of direction of the economy, decrease in costs, and confidence in ourselves can lead to a downward spiral mentally, financially, and even physically. When the status quo is broken personally and financially, what do you do? How do you react? Today, we try to answer these questions without letting them overwhelm us.

Inflation, in simple terms, happens due to our economy’s reflection of increase in production costs which then causes a noticeable increase in costs of products.1 Furthermore, when the demand is much greater than the supply and the buyers are willing to pay for them, a rise in costs also occurs.1 A common example where one can see the waves in prices would be the housing market. Not only does it reflect the demand, but it also flows with what the economy of the time is experiencing. In even simpler words,

Inflation = raising prices

To be completely frank, it damages everyone’s wallets which can be backed up by a couple of reasons. To begin, the value of our money decreases as buyers are unable to purchase what they are used to.2 It is financially demoralizing. Furthermore, it inevitably leads to a decrease in one’s savings. When income remains constant while spending increases, savings is the next place we go to.2 Finally, cuts have to be made. With a tight budget, some may leave out products or activities that are not an absolute necessity in order to cover necessary costs, such as food, housing, education, etc. Although never a good sentiment, it is quite obvious that inflation is not beneficial to the consumers.

Emotionally, it takes a toll on us also. When the money we have is devalued, it can lead to stress and anxiety which can manifested through physical symptoms.3,4 The stress of not knowing when it’s going to end and how much the prices are going to rise creates a world view where you are in survival mode against economy in the midst of uncertainty. There is no clear-cut solution nor a single decision that can be made to alter the circumstance to maintain the ongoing financial situation.

Management of financial stress is one of the key factors to create a healthy and adaptable mindset in times of emergencies and uncontrollable changes in society. The acceptance of economy’s cycle without feeling weakened is one of many ideologies that we can adapt to prevent the cycle of overthinking and self-doubt. When one’s value of money is decreased, many find it difficult to dissociate it with self-worth. In a society full of narratives that wrongfully support the interdependence between self-image and money, it is our goal to detach them as separate entities and be grounded in our values and beliefs.

At the end of the day, the economy may be able to decrease the value of the money we have, but it should never be given the power to depreciate our self-appreciation or self-care.

 

References:

  1. The Investopedia Team. (2022, August 10). What causes inflation and who profits from it? Investopedia. Retrieved September 19, 2022
  2. Williams, G. (2022, July 29). Why is inflation bad? 3 effects of inflation. Forbes. Retrieved September 19, 2022
  3. Fielding, S. (2022, August 1). High inflation rates impact almost every aspect of our lives, including Mental Health. Verywell Mind. Retrieved September 19, 2022
  4. Financial Consumer Agency of Canada. (2019, March 28). Government of Canada. Canada.ca. Retrieved September 19, 2022

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Unemployment and Underemployment

How do you measure your self-worth?

After enduring two brutal, pandemic-filled years, it now seems foolish for the world to have proudly concluded that things are finally going back to ‘normal’. The workforce seems to be a little more complex than that.1 Changes in the workforce have left a lasting impact not only on the work environment, but on the psyche of the individuals who are now dealing with concerns over both unemployment and underemployment. The pandemic saw unemployment and underemployment rise as skilled workers were both forced out of the professional world, and some left voluntarily to pursue income from the gig economy. The ones coming back are demanding new conditions to match their post-COVID perspective.

Unemployment describes a situation where one is not employed while underemployment describes the situation when an employee works fewer hours than usual in their specialty.2 In addition, invisible underemployment touches on people that put in the hours but do not use their skills. In both cases, it is important to look not only at the financial but emotional and behavioural adversities that follow these events in order to fully understand the adverse consequences. This also allows for more personalised solutions to be suggested by professionals for workers to overcome these major life challenges.

Peggy was a principal of a school when COVID started, but through changes in leadership due to the pandemic, her contract was not renewed and she found herself unemployed. Peggy was at a crossroads in her life having been a school principal for the previous seven years but knowing she wasn’t really enjoying. Her finances were in such a state that she couldn’t afford a lower paying job, even though her ideal situation was working less hours and having more time in her garden. Peggy spent the summer talking to a financial therapist and re-evaluating her life, her sense of self, and redefining what she truly needed to feel happy and fulfilled. After a lot of deep psychology work, Peggy was able to restructure her entire financial life, sell some assets to pay off debt. She moved to a reading tutor’s job at a new school and found the more she engaged directly with the children she wanted to teach, the better she felt. This new perspective tied her self-worth to direct childhood education and helping youth from a hands-on angle, rather than the more complex but less rewarding position of school administrator. At first Peggy had to detach from her self-image of being a principal and the esteem she had attached to that role in life. Once she could free her mind, Peggy was able to seek out what truly fed her heart. This led to what some people would consider “underemployment” or a lesser skilled and lesser income position. However, once Peggy had systematically addressed her finances, she right-sized her financial needs to match a lesser paying but more fulfilling role. In this case, Peggy used financial psychology to deal with the fear of unemployment, the stress of debt, and choice of employment to live a fuller, happier life.

It is quite obvious that both unemployment and underemployment lead to financial trouble. If you are not working, earning money becomes a struggle. Behaviors stemming from denial and indifference can surface throughout this process as financial losses can affect one’s view on money in negative ways most of the time. In the realm of financial psychology, the focus is not necessarily on the financial losses, but rather the emotions you attach to financial loss. Not only can it demolish one’s confidence, it can compound negatively, fundamentally altering their life course. When Peggy first found out her contract was not going to be renewed, this through her into abject financial fear and certainty that the only solution was to find another principal’s position. It was only through careful analysis of her situation and staying calm in the face of fear that she was able to discern the choice that best matched her heart’s desire.

Dooley et al., demonstrated that cases of underemployment and unemployment are highly correlated with depression compared to those that are fully employed.3 Furthermore, self-esteem and self-worth are in question during unemployment, which leads to negative emotions, anxious thoughts and self-doubt.4 Although we as a society put up a front of separating money and worth, it is typical to see those two aspects still entangled together. This perpetuates the defeatist view where money defines self-worth. When Peggy analysed what she truly wanted in life, to support youth through education, she realized a reading teacher’s position was the best choice for her personal fulfilment and would still support her self-worth.

One thing many would do in this same situation is lose their positive outlook. This can lead to depression, negativity, victim-outlook and other points of view that would aggravate the situation even more. Peggy dealt with this head-on. She gave herself time to grieve the loss of her job and recognized the trauma she had endured from that experience. By using emotional neutrality, she was able to find the equanimous place within herself to stabilize and centralize her energy around her own self-worth separate from her income.

Financial psychology provided the clarity Peggy needed to see that when one financial avenue closes, another one opens. It is important to remind yourself money is not in the background of self-worth. However, a reflection of yourself can be seen through how you react and deal with financial hardships.

 

  1. Tracking the COVID-19 economy’s effects on food, housing, and employment hardships. Center on Budget and Policy Priorities. (n.d.). Retrieved May 10, 2022, from https://www.cbpp.org/research/poverty-and-inequality/tracking-the-covid-19-economys-effects-on-food-housing-and#:~:text=The%20unemployment%20rate%20jumped%20in,2021%20than%20in%20February%202020.
  2. Hayes, A. (2022, May 3). Unemployment definition and types. Investopedia. Retrieved May 10, 2022, from https://www.investopedia.com/terms/u/unemployment.asp
  3. Dooley D, Prause J, Ham-Rowbottom KA. Underemployment and depression: longitudinal relationships. Journal of Health and Social Behaviour. 2000 Dec; 41(4):421-36.
  4. Goldsmith, A., & Diette, T. (n.d.). Exploring the link between unemployment and mental health outcomes. American Psychological Association. Retrieved May 10, 2022, from https://www.apa.org/pi/ses/resources/indicator/2012/04/unemployment

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How To Cope If The Covid-19 Pandemic Has Stretched Your Finances To The Limit

(Forbes) – Americans say they’re saving money. Retail spending is up. Low interest rates have sparked the housing market and the stock market has rebounded from its initial pandemic dive.

But how does any of this make sense when so many people are struggling financially months into the Covid-19 crisis and the recession that came with it? The unemployment rate is high, unemployment assistance is about to expire again in some states, overall consumer spending is down and mortgage delinquencies are on the rise.

The reason is what’s expected to be a K-shaped economic recovery, which disproportionately impacts different segments of the economy. Even now, more than six months into the pandemic, some households’ finances are largely untouched, while others are looking at a long and arduous recovery.

For many, weathering what has become a longer-term financial storm will require more than just an emergency fund. An individual’s financial issues are so closely tied to the state of their mental health, and the ongoing stresses of the coronavirus pandemic are well documented.

While you cannot predict how—or when—the American economy will recover from this period, you can take some time to reframe how you think about your finances on an emotional level.

Here’s what you need to know about protecting your finances and your mental well-being during these uncertain times.

What Is a K-Shaped Recovery?

An economic downturn and its eventual recovery can take many shapes. You may have heard of a V-shaped or U-shaped recovery. But one thing these often-referenced shapes have in common is that widespread financial challenges usually are met with widespread recovery, albeit by various degrees for individuals.

A K-shaped recovery, however, sees two groups diverging from an economic turning point, instead of tracking a single curve of decline and recovery. More affluent individuals see their situation as stable or improving during a downturn—they’re the upper portion of the K—while others experience devastating losses.

There are signs that this is happening now during the Covid-19 crisis.

People earning between $25,000 and $35,000 were nearly three and a half times more likely to report having a “very difficult” time paying for usual household expenses than those earning between $100,000 and $150,000 per year, according to a late-August survey by the Census Bureau.

Take the hospitality and leisure sectors for example, explains Brian Kench, dean of the Pompea College of Business at the University of New Haven. “Only about half of lost jobs have come back,” in those sectors, he says, due to continuing virus concerns.

Benefits designed to stabilize people who haven’t been able to return to work or find new employment—if they have been able to access those funds—are likely to run out. The grim employment outlook plus strained finances compounds the recovery process for these individuals.

“The lower part of the K feels like it’s sliding even deeper,” Kench says.

If you have large swaths of people who can’t earn money to pay their bills and make purchases, it’s going to take longer for the economy as a whole to show vast improvements, even if there are a lot of people who are doing relatively well.

And for many people, the impact of that slower recovery track can have long-term effects on their ability to earn and amass wealth.

A recent survey found that households of color face a more challenging financial landscape than their white counterparts, often with less access to aid programs like the Economic Impact Payments, popularly known as the stimulus checks, authorized by the CARES Act.

Households of color were still trying to regain ground from the last financial crisis before the coronavirus pandemic came along. Income for Black households didn’t surpass 2007 levels until 2019, according to new Census Bureau data on income and poverty.

“But that’s already old news,” said Valerie Wilson, director of the Economic Policy Institute’s Program on Race, Ethnicity, and the Economy, during a presentation this week. “The impact of the pandemic and the recession has had a disproportionate impact on Black workers and their families,” Wilson explained.

Impact of Uneven Recovery Felt on Individual Scale

Recognizing a K-shaped recovery can help acknowledge that not every part of the economy recovers at the same pace. Much of the process is ultimately felt at a personal level.

“A lot of industries are going to be hard hit for an extended period of time,” says Leigh Phillips, CEO of financial technology nonprofit SaverLife. “Schools aren’t back, childcare is not back and that obviously impacts a lot of families.”

Almost 90% of users of SaverLife’s financial education platform—who tend to earn about $25,000 per year—have reported a loss of income due to the pandemic.

“But that loss of income has been paired with simultaneous increased spending,” Phillips says. Households who weren’t already set up for remote work or online learning had to figure out how to cover the costs of internet access or devices, she explains.

And families who may have had their grocery costs supplemented by school meal programs may suddenly have been faced with the need to provide three meals a day at home, during a time when food costs increased, Phillips says. “Even for people who receive supplements from the government to pay for food, we’re still seeing much higher spending in that category,” she says.

SaverLife has been encouraging members to claim their stimulus checks or unemployment benefits if they haven’t already, along with pointing them to food assistance programs in their areas. The organization also partners with financial coaching programs around the country to help users work with their creditors.

But taking those first steps to access help can be challenging, especially since some of the initial shock of the pandemic’s economic impact has dulled.

“People don’t necessarily want to confront some of these issues right now,” Phillips says. “They’re frightening. But the more that you can [do to] get all the assistance you can, the better off your family’s going to be.”

How to Cope With Longer Periods of Financial Strain

With the U.S. pandemic response in its seventh month, you may have already exhausted your initial sources of financial security, whether in the form of an emergency fund or government aid. But before you strategize a long-term budget to weather this period, it’s helpful to recognize your emotional state.

In the first few weeks of the pandemic, you may have felt a fight-or-flight response to adapt to the immediate changes. But that response may no longer be enough to support you through this next phase, warns Dr. Alex Melkumian, a Los Angeles-based psychologist and the founder of the Financial Psychology Center.

Some people have fewer coping mechanisms to maintain that “fight” response for a long period, or never had the resources to be in the position to fight in the first place, Melkumian says. He uses the example of someone who loses their job suddenly and needs to apply for unemployment. “For some people, that’s a devastating place to get to in their career.”

Add that grief onto the difficulties of navigating state unemployment insurance systems and the health concerns brought on by the pandemic, and the stress you feel can start to stack up—which can do long-term damage to your relationship with money.

“Money can be a conduit for anything we’re emotionally filled with,” Melkumian explains. “If we’re full of fear and anxiety, it’s going to [show] in our behavior and our decision-making with money.”

Melkumian says that beneath patients’ frustration with their financial situation are often feelings of shame and guilt. And, to persevere over the long term, you need to address that emotional side of dealing with money. “When we fight our emotional nature, we do ourselves a disservice. The longer we ignore, the longer recovery will take.”

Acknowledge Feelings of Shame and Guilt (But Don’t Dwell)

Whether you were struggling before the pandemic or your financial challenges are more recent, recognize that a lot of people are in a tough position. This is not the time to feel guilty because you weren’t better prepared.

“During this crisis, priorities may need to be made that focus on the present, and that is okay,” says Sarah Parker, senior director at the Financial Health Network. “Emergency funds may need to be tapped, and that is okay because it’s exactly what they’re there for.”

If your funds are coming up short for basic needs, don’t wait to ask for help. “Don’t be so ashamed and guilty that it prevents you from reaching out for help,” Melkumian says. Many financial institutions are still working with customers to offer forbearance programs, and you may be eligible for aid beyond the channels you’ve already pursued.

“Understand you need to give yourself the room to process, to get through the emotional stuff,” Melkumian says, but don’t let it pull you into a spiral of shame that’s harder to get out of later.

Take Small Steps Toward Recovery

Don’t worry about making the perfect budget right now. But do your best to plot out your obligations, resources and any accommodations you’ve requested.

“Our research shows that planning behavior is highly correlated with improved financial health,” Parker says. “People often don’t plan because they feel overwhelmed by it, especially those with strapped budgets already. But starting somewhere with a small degree of planning for the rest of the year into the next will help.”

Thinking about your goals—even if it’s just covering the basics—can help you start to see incremental progress, Parker says.

For a boost, try using free budgeting apps that can help you track your spending and help you plan ahead. “There are many apps that analyze spending patterns and cash flow to help consumers determine what their disposable income is without jeopardizing their financial obligations when those bills roll around,” she says.

Check In With Yourself

Melkumian recommends taking a few moments to do a daily emotional self-check to catch brewing financial fears before they grow larger than life.

Since you can’t predict how long the widespread economic recovery will take, you can’t let yourself get overwhelmed with daily what-if scenarios, he warns. “Everyone wants their financial world to improve immediately,” Melkumian says, but that hope can manifest irrational expectations.

It’s important to develop a mindset that can see how small improvements in your finances that may seem insignificant now can have a bigger impact a few years from now. Doing so can take time, so be patient with yourself as you continue to check on your emotional state and financially recover.

 

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Financial therapy: What it is and how it can help you

(CNET) – There are plenty of reasons to feel worried about money right now. A financial therapist can help.

As the COVID-19 crisis has wreaked havoc on healthcare, education and the economy, it has also taken a toll on our psychological and emotional well-being. Millions of people have lost their jobs and are filing for unemployment. More than 5 million people in the US have been infected, and many of them are facing an onslaught of medical bills. If you’re worried about money right now, you’re not alone.

But financial anxiety isn’t exclusive to the ranks of the unemployed. It can just as easily plague people who have enough money at the moment but are worried about the future. And regardless of where you fall on the socio-economic spectrum, money can be difficult to talk about — even in a regular therapy session.

“Financial trauma has unfortunately become a reality for some who’ve experienced extreme financial hardship,” says Alex Melkumian, founder of Financial Psychology Center. “In times of the pandemic, the overall level of financial stress and worry has risen exponentially and has negatively impacted the financial wellness and mental health of so many.”

Financial concerns can ripple into all areas of your life. After all, money isn’t always just about money; it can be a surrogate for stress, anxiety and trauma, too. That anxiety can manifest through fears about end of life and mortality — running out of money in retirement or during an emergency, for example.

There’s a type of counseling specifically for money-related anxiety: financial therapy. Read on to see if it might be a good fit for you.

What is financial therapy?

According to the Financial Therapy Association, this form of counseling can help people change the way they think and feel about money — and, most importantly, change negative behaviors. It gets right to the heart of your financial attitudes.

Melkumian says financial therapy can help those who need to dig deeper into why they can’t stop living paycheck to paycheck or keep getting deeper into debt.

“If you make the same financial mistakes and can’t seem to figure out why, if money is a major source of conflict with your significant other, [or] if your financial situation is creating turmoil in your life and causing extreme emotions,” financial therapy may help you, Melkumian says.

Different people have different needs, he says, but financial therapy can help develop a detailed financial plan.

“One of the most common tasks addressed in financial therapy is setting up and implementing a spending plan,” Melkumian says. “A client can implement a comprehensive spending plan in a span of three months. For clients who struggle with extreme financial stress, worry and trauma, addressing those issues may take longer to process.”

What does a financial therapist do?

Financial therapist Lindsay Bryan-Podvin, author of The Financial Anxiety Solution, says there are a few important distinctions between a financial therapist and a traditional therapist.

“Many therapists have a specialty in other tough areas such as trauma, sex, abuse, gambling, addiction and/or neglect — but very few specialize in money,” she says. “Money can absolutely be brought up in a regular therapy session. However, most therapists do not have additional training on the psychology of money.”

And, of course, a conventional financial advisor helps you manage your money — not manage your feelings and emotions about money. “You cannot call yourself a therapist if your background is in finance,” says Bryan-Podvin. “You can say you have financial therapy training, but to call yourself a therapist, you must have at least a Master’s degree in Counseling, Social Work, or Psychology.”

While Bryan-Podvin has a Master’s degree in social work, the Financial Therapy Association requires a financial or mental health background for those seeking to become a Certified Financial Therapist. General therapists might recommend seeing a financial therapist if they don’t have the extended knowledge, training and expertise surrounding the psychology of money.

Where can you find a financial therapist?

You can find a financial therapist on the Financial Therapy Association’s database. Melkumian, who is also an FTA board member, says there are approximately 350 financial therapists in the US. The cost of a session varies by provider and location.

Many financial therapists, including Bryan-Podvin and Melkumian, currently offer remote service. If you don’t have a financial therapist near you, you may be able to set up a virtual session.

There may be less expensive alternatives, too. Many banks, credit card issuers and other financial institutions offer some form of education or counseling. Capital One offers free money coaching. You may not get the same level of counseling as you would from a financial therapist, but it may help you begin to address some of your issues with money.

And you don’t need to wait until you’ve gone through financial trauma before getting into financial therapy. Melkumian says you can look into financial therapy before issues start.

“Why wait to see a financial therapist until you are broke?” he asks. “You can save yourself from the pain and suffering by starting now.”