FINANCIAL BY DENISE NORBERG-JOHNSON
Or so we thought. In the last few
years, “financial therapy” has become a
growth industry. People may be rational
about money but quite irrational in their
other behavior, and they may not realize their behavior affects their financial
decisions. A financial therapist, unlike
other psychotherapists, specifically
focuses on financial well-being, helping
clients to deal with emotional, behavioral, relational, cognitive, economic and
integrative aspects of handling money.
The financial therapist collaborates
with other financial professionals, such
as tax or investment advisers, and may
even attend joint meetings to ensure the
effects of emotional issues or beliefs are
understood before strategic decisions
How can you tell if you need financial therapy? You might think of yourself
as financially conservative and rational
about spending, but if you record your
transactions, patterns may contradict
your assumptions. Perhaps your personal relationships fail because of money
conflicts. You think you have a money
management program, but your financial decisions are actually crisis-driven.
Or, you have an extremely high level of
anxiety about financial issues. A financial
therapist can help you change these patterns and behaviors.
Other financial therapy candidates
include talented people who cannot
seem to support themselves and “yo-yo”
debtors who, on a continual cycle, pay
down their accumulated debt and incur
new debt almost immediately.
Common issues financial thera-
pists encounter include cash flow and
debt problems, chronic overspending
or underearning, and making financial
choices based on emotion or anxiety.
Allowing money to become a source of
relationship conflict is also a frequent
issue. Whatever drives an individual
emotionally will be expressed in that
person’s attitudes about money and how
he or she uses it. So, therapists focus first
on changing behaviors—how clients use
money—instead of how they feel about
their financial dealings.
No one is perpetually free of financial stress, but there is a connection
between difficulty with money and
difficulty with self-regulation in other
areas, such as addictions to gambling
or alcohol. While abstinence is a common strategy for changing addictive
behaviors, it is unrealistic to avoid all
contact with money, so the financial
therapist helps clients achieve balance
in financial dealings and create long-term behavioral strategies.
The process often begins with a
financial “biography”—an exploration of
how you handle money, and your beliefs
about wealth and whether you deserve it.
Do you save every penny because
you use money as a security measure? It
doesn’t prevent cancer or a tornado, so
your perspective may need refinement.
Once you recognize the origin of an attitude or belief, you can choose to change
the behaviors that follow.
Unrecognized, limiting beliefs can
affect satisfaction, self-worth and stress
levels associated with money, but no
two people handle circumstances in
the same way. Given the same level of
net worth, one person feels happy and
secure while another feels poor and anx-
ious. Your attitudes drive your behaviors
at home and in your business, affecting
your relationships with employees and
customers, your profitability, and your
company’s ultimate survival. If you
run your business jointly with family
members or partners who hold con-
flicting beliefs, the quality of overall
financial decisions will almost certainly
Choosing a financial therapist can
be tricky. Money issues are not formally
accepted as a mental health disorder,
so don’t expect a universally accepted
diagnosis or treatment protocol. There is
ongoing debate about what qualifications
define a financial therapist, so there is no
specific credentialing process or code of
ethics for this specialization.
With such uncertainty, why not
focus on financial literacy first? Having
accurate information and understanding financial statements, debt financing
and other kinds of analysis can help
you make better financial decisions.
However, financial literacy cannot pro-
vide the support you need to deal with
uncertainty, anxiety and conflicts that
affect relationships. The ability to evalu-
ate your net worth doesn’t guarantee you
feel worthy of a higher profit level if you
believe wealth is inherently evil.
Ultimately, financial literacy will not
overcome the emotional way you view
money and profit and your beliefs about
whether you deserve to be financially
successful. Financial therapy may offer
another tool to help you build a financially
healthy company and a sound attitude
about financial success.
A new way to stay in control
ELECTRICAL CONTRACTORS MAKE RATIONAL FINANCIAL DECISIONS
every day. They use historical data to develop the next budget and cost accounting
to measure whether projects are hitting desired profit goals. Managers use so-called
“left-brain” thinking to make rational decisions about money, and emotions have
no place in bidding, purchasing or billing.
NORBERG-J OHNSO N is a former subcontractor and past president of two national
construction associations. She may be reached at firstname.lastname@example.org. IST