Does Financial Therapy Work? Let's Process That.

May 26, 2023

It All Starts With A NY Times Article

Asking hard questions is the job of great reporters, therapists, and researchers. This is something I have found in common between the three professions. However, great questions sometimes lead to difficult and uncomfortable answers or, even worse, more difficult and complex questions. Ultimately leading you from curiosity and certainty to confusion and chaos. Only in the end to find your way to a deeper understanding of the original question. 


Susan Dominus of the New York Times wrote a recent article titled Does Therapy Really Work? Let’s Unpack That. She starts by acknowledging her experiences of therapy being comforting and helpful but not always beneficial in the ways she expected. After different periods of life in therapy, she is curious about the scientific research on the effectiveness of therapy. 


I love that she shares that when she poses the topic of research on therapy to her friends, they either redirect the conversation or it might even raise a slight bit of hostility. For me, this is where I think that therapy starts to function a lot like religion. Both religion and therapy have established belief systems about the nature of humans and what we should do with ourselves in light of this reality. 


Questioning something that is supposed to be helpful and is helpful in somewhat mysterious ways can be unsettling. What if what we have believed about the thing that is supposed to be beneficial isn’t true? Where does that leave us, then? 


The difference between religion and therapy is that, in theory, therapy is based on the scientific study of the mind, brain, and body. Yet, the reality is it is a mix of philosophy, science, and lived experience that combines into numerous models of understanding how we work as humans. Ian McGilchrist in The Master and His Emissary, talk about the false dichotomy between science and philosophy and its impact on our understanding of the brain. It is our understanding of our brain that should shape the way therapy is understood.


So what did Susan find from her deeper inquiry into Does Therapy Really Work? In short mixed results. Not surprising to me as that is something we are trained about in graduate school. A hard pill to swallow for someone that likes certainty. What is encouraging about the research and I remember being trained on early in my development as a therapist, is that it is different from the model of therapy that has the highest predictive power of positive effect. Instead, it is the relationship quality between the client and therapist. 


At this point in my journey through receiving and providing therapy, I am confident there are many different ways to look at what is happening within us humans and what needs help. Each therapy model explains what is happening with the client and then, in light of that, what types of interventions would be appropriate to help the client. Each view has its value and limitations. 


Where Does Financial Therapy Fit In This Picture?

Financial therapy is built on the back of therapy and financial planning. As with any field of professional practice, there should be open and ongoing questions about the effectiveness of its practice. If we can not question, research, and challenge the work of a profession, we risk much harm. Financial therapy aims to help people work through the various thoughts, feelings, behaviors, and relationship dynamics that can adversely impact their ability to experience financial well-being. 


The challenge of both therapy and financial therapy is a question of the degree and significance of impact. What represents healing and growth for one person can be very different for another. Enter context, personal history, and cultural history as determinants of success and future potential of opportunity of financial therapy being helpful. 


Professionally I have been trying to understand how best to help people with money for the last 16 years. Each year, new knowledge and skills have expanded my understanding of people and money. At the same time, what it takes to help people achieve financial well-being continues to maintain some mystery. This keeps me humble and curious to understand better how to be of the best help to people.


Financial therapy is a particular approach to understanding what people need help with relating to money. Different than other commonly cited ways of helping people with money. Namely financial literacy,  financial planning, or at a larger scale, financial policy. All of which are important. Financial therapy can be about greater participation in and change in our economic systems.  


The reality is that when financial literacy and financial planning do not work, that is one of the most likely signs that it is time for financial therapy. On the other hand, when financial policies create exclusion, hurt, and suffering it is also a time when financial therapy can help.  Financial therapy goes deep into the psychology of being human and it’s many facets with the anticipation that this depth of understanding humans will free up our ability to engage with money in more rich, dynamic, and collaborative approaches while navigating the realities of the complex economic and relational systems we live. 


This view is far different than another New York Times article in which a woman wrote in asking if it is fair if her husband flies first class while she and her kids fly in coach on their family trips. This question was posed as a moral question, but beneath the morality of it is the underlying psychology, history, and cultural context of experience with money that sets the stage for this question and moving toward an appropriate answer. 


One of My First Personal Experiences With Financial Therapy 

I have not always seen things this way. Instead, it has been a further journey beyond learning about the technical side of money. The lesson that we all have a personal history and relationship with money really started to take shape years ago in Mexico  at a Financial Therapy Association conference when Rick Kahler was teaching The Money Egg Exercise. The meaning of that powerful exercise has grown over the years like many profound truths we do not initially recognize as such. 


Many people have never considered how their experiences with money and relationships shape how they later approach money in adulthood. And if they have, they can be left at a loss for how to effect positive change.


Now the money egg is one of my favorite financial therapy exercises to explore my relationship with money and that of my clients. It is a reflective exercise inviting people to start with their earliest money memory at the bottom of a large oval egg drawn on paper. You continue up the egg, adding new images along your life timeline. Once you have gotten to the top of the egg, you are close to the present day. Then you return to the egg's bottom and add emotional words next to each memory. Lastly, you take a moment to reflect and complete the sentence money means to me…


One of the most important insights from this type of exercise is getting a close look at the emotions you have tied to money. We connect emotions to money from a very early age, even before we have words to describe emotions. This is primarily an automatic process, not one we consciously choose to do. From emotions, we then make meaning and establish beliefs about money. Typically when we have comfortable emotions (joy, pleasure, happiness, excitement), we have positive beliefs about money. When we have uncomfortable emotions (sadness, fear, anxiety, shame, anger), we develop negative beliefs about money. 


In financial therapy, we are trying to surface and work through the different emotions that got tied to money for you. As we process the emotions, we see how they impact your financial beliefs, which are then connected to the different financial behaviors you do or don’t do and the thoughts you use to explain your actions. 


Financial Planning As Financial Therapy 

Comprehensive Fee-Only Financial Planning is a semi-structured process designed to help people look at the whole of their financial lives and the individual parts to help make sure they are working together currently and setting people up for success in their future. 


What I know as a Therapy-Informed Financial Planner™ is that in the process of financial planning, a person and couple's relationship with money will be evoked. There is no way around it. When we start to think about our financial life, a full range of thoughts, feelings, behaviors, beliefs, and relationship dynamics will come out and come forward. 


At first, this might seem overwhelming, and for others, this might be partly why you shut down the very idea of financial planning. But when we can find the middle ground, comprehensive fee-only financial planning can be a significant part of developing a healthier relationship with money. 


When comprehensive fee-only financial planning is approached with a therapeutic lens, it makes it safe and secure for clients to explore their relationship with money. Difficult and uncomfortable emotions and experiences with money can openly and honestly be discussed. Being met with empathy and compassionate inquiry makes it easier for people to talk about their financial life and make plans appropriate for their current age and stage of life. 


One of the biggest hurdles that individuals and couples face while navigating their financial life is the reality of shame. Many therapists consider shame the most difficult emotional response and it can head us into profound psychological suffering and denial of realities. 


I often hear some version of:

Am I good with money?

Am I making enough money?

Does my partner respect me and my money decisions?

I have had some business failures. 

I am not meeting my parents, family, and friend's financial expectations.


These are some of the many statements and questions I hear in the process of providing financial therapy during financial planning with clients that have shame woven within and between the words. 


Will Financial Therapy Be Helpful For You? 

The short answer is yes, and it depends. 


Getting the most out of financial therapy is about you and your financial therapist's willingness to show up, be curious, and collaborate on finding ways to move forward with your relationship with money. 


There are many ways to do financial therapy. The vital consideration is what you want out of the work and being open to seeing that there will be different ways to approach the work. 


From my perspective, financial therapy is about addressing the pain and creating greater degrees of resolution around the pain associated with money, which will lead to increased flexibility and the range of motion you can take in your financial life. 


For some people, acute issues need to be addressed, like spending that has become problematic and led to increasing debt. Yet the reality is that often beneath the surface of the spending problems are a handful of other challenges that need to be worked through like developing the ability to set boundaries with themselves and others before they can stop the overspending. For some people, their problems with money rise to the same level of significance as eating disorders, addictions, and issues with sexuality. 


We may want simple and quick fixes, but often I have found that by the time we need financial therapy, the issues are deeper and more nuanced than what any one-time fix, exercise, or intervention can address. It typically means there is a more significant change process that needs to be worked through to get the desired results. 


This is why I like working with individuals and couples in Therapy-Informed Financial Planning™, where we can work together through their objective financial life alongside their psychological relationship with money. 


When we look honestly in the mirror of our financial life, we can see and clear up the distortions in our minds about our financial lives. We all have them. 


One of the most challenging and liberating experiences we can have with our money is to look in the mirror and get as close to an honest appraisal of where we stand with money. 


Let’s talk about your financial life. Feel free to schedule a 30-minute conversation with me to see if Therapy-Informed Financial Planning is a good fit for you. 


To Your Financial Well-Being,

Ed Coambs - Therapy-Informed Financial Planner™


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