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What is Financial Therapy?

My definition of financial therapy has evolved since I first heard the term in 2002.

 I’ve often proclaimed any therapist who has “done their own money work” to be a “financial therapist.” I’ve also deemed any therapy workshop that focuses on the participants’ money issues to be financial therapy. I’ve wondered if a practitioner , whether a financial planner or a therapist can do financial planning themselves.  Not any more. To read what’s shifted in my thinking you can read more here.

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One Response to What is Financial Therapy?

  1. Richard Trachtman, Ph.D. November 2, 2010 at 2:27 pm #

    Rick,
    Thank you for attempting to clarify the question of what financial therapy is and how it should be defined. It is a question that has bothered me and you made me think about what my definition would be. I would never consider myself a financial therapist, though working in collaboration with a financial planner might consider the work we do together to be such.

    Before I share my definition, I have a few responses to what you wrote. I would suggest that instead of thinking in terms of people trained in psychology you think of qualified in one of the recognized areas of mental health practice since who is qualified as a psychologist (vs. social worker, psychiatrist, psychoanalyst, counselor, nurse practitioner, etc.) can get muddy. Also, to be really qualified as a professional dealing with money related issues does, involve attunement to one’s own contertransference issues, but also involves study and understanding of money as a force with important psychological and social meaning that affects people in a number of domains (financial behavior, cognition, emotions, interpersonal behavior, etc.)

    Here is my attempt at a definition of Financial Therapy: A type of helping intervention that addresses and is intended to ameliorate problems having to do with a client’s financial understanding and/or behavior and which is conducted either by a single practitioner qualified both as a financial planner and a mental health practitioner or by a team consisting of qualified professionals from each of these professions.

    Financial therapy, according to this definition is only one of several emerging fields that, for therapists, combine basic qualifications in the practice of psychotherapy or counseling with an additional level of expertise in understanding the interplay between money and psychosocial health. Other such fields include what has commonly come to be known as wealth counseling and my own specialty, which I call money and relationships life coaching, counseling and psychotherapy (which has a threefold purpose: to help people understand the psychological aspects of money, their relationship to it, how it affects their relationships to other people; to help people learn to enrich their lives by redefining money as a tool for achieving their personal and relationship goals; and, to help people overcome money related social and emotional problems).

    Going beyond the task of defining financial therapy (hard enough in itself) I think it would be useful to begin thinking in terms of an overarching concept of an interdisciplinary area comprised of a variety of professionals who help individuals, families or groups with concerns that involve both money and intrapsychic or interpersonal problems as well as academics who study areas such as the psychology of decision making in areas such as investing, spending, gambling etc. This would be a challenging task, I know, when as you say it is still debatable who is qualified to be a financial planner and, as I know, the same applies to coaching, counseling and therapy.