Financial Psychotherapy

Financial Psychotherapy

Verified by World Mental Healthcare Association

Financial psychotherapy refers to a form of counseling that helps people to change the way they think about money and provides emotional support to cope with financial stress. It is a relatively new field of psychotherapy that effortlessly combines finance or personal finance-related problems with mental health treatment.

What Is Financial Psychotherapy?

Financial psychotherapy is a kind of psychological counseling that helps people to change their negative attitudes regarding finance-related issues. It offers emotional support to people as well as provides them with a broad range of useful ideas with the help of which they can overcome their financial stress and struggles. Financial advisors who provide therapy to their clients and help them to make logical and beneficial financial decisions are also known as financial psychotherapists. In today’s world, there are plenty of situations where we experience mild to major financial crises. One should know when their financial struggle is taking a toll on their mental health and when they should consult with a psychotherapist.

According to a 2016 research paper 1, “Financial therapy is an emerging field that integrates the interpersonal and intrapersonal aspects of financial well-being.” Financial education and psychotherapy are two significant methods that are used by mental health professionals to improve people’s finance-related behaviors. Proper education often leads to increased financial knowledge and gradually improves one’s behaviors related to money-related matters, a 2015 study 2 suggests.

Understanding Financial Psychotherapy

Money plays an important role in our overall well-being and we often experience stress while dealing with personal financial issues. We often make wrong decisions that usually lead to financial losses. Many times money becomes the major cause of conflicts with our close ones and our financial situation creates major turmoils in our life, due to which we experience extreme emotions, such as anger, irritability, chronic stress, depression, anxiety, and disappointment. If all these issues are left uncontrolled, it can cause serious consequences and negatively affects other areas of our lives.

In such instances, financial psychotherapy helps a person to improve their financial literacy and money management. With the help of therapy, a person can make a beneficial comprehensive plan within three months. But for those who are struggling with extreme financial stress and trauma, the diagnosis can take a longer period of time. There are two primary types of financial therapists among which clients have to choose the one that better fits their respective requirements, such as:

  • Therapists who come from a counseling background
  • Therapists who come from a financial planning background

However, researchers often argue that those therapists who come from a financial planning background are not trained in attending to emotional, relational difficulties, and dysfunctional communication patterns that can limit their success with clients.

Financial Psychotherapy At A Glance

  1. Financial therapy is a kind of counseling that helps people to think and behave positively about finance-related matters and improve their overall well-being.
  2. There are two primary types of financial therapists: those who come from the counseling background and those who come from financial planning background.
  3. Money is closely associated with our hopes, feelings, frustrations, and fear that can adversely affect our mental health.
  4. Some people tend to hide finances from their partners that may cause household conflicts followed by negative impacts on people’s mental health.
  5. If one experiences frequent stress over finance-related issues and difficulty handling the same, they should seek financial psychotherapy.

How Financial Psychotherapy Helps

Studies 3 have described financial psychotherapy as a process carried away by both therapists and financial experts to help people think and behave differently about finance-related matters to improve their overall well-being. The profession of financial therapist has become widely known in recent years. Many studies 4 reveal that money is closely associated with our hopes, feelings, frustrations, and fear that can adversely affect our mental health. It can even have a negative impact on our relationships as research 5 shows money-related arguments and conflicts are quite common among couples.

It often seems that one can easily resolve such problems on his/her own, although it may not always be the case. There are many financial strains that not only include reasons like constant anxiety about money or chronic overspending but also several behavioral, psychological, and rational issues. Financial psychotherapy helps individuals to recognize such problematic behaviors and better understand how certain situations can lead them to develop such negative behavior patterns.

It also provides helpful financial advice along with enough emotional support. The therapist helps people to overcome their fear, anxiety, and shame related to money. The number of sessions one needs varies based on the specific situation, but it usually lasts for a few months. The therapy can conclude whenever the client feels that his/her finances are balanced enough and he/she can effectively maintain the same in the future.

Types Of Financial Problems

Types Of Financial Problems

There are numerous troublesome situations that can lead to financial problems. Such issues vary from person to person as what a person considers a financial crisis may not be troubling to another, according to the respective person’s situation. Individual wealth also varies widely depending on a variety of factors – some of them can be controlled, such as career and job choices, while some cannot, such as institutional oppression. There are many beliefs and values around finances that are shaped by different cultures, education etc.

A recent study 6 mentions some common stressful financial situations that people experience in their day-to-day lives, such as:

  • Poverty
  • Unexpected loss of income, such as job loss
  • Unnecessary spending
  • Lack of savings
  • Huge healthcare costs
  • Habits like gambling
  • Increase in financial responsibilities
  • Poor budgeting
  • Bankruptcy
  • Any kind of long-term loan
  • Lack of retirement planning

Reasons To Seek Financial Psychotherapy

There are several reasons why a person can seek financial therapy. Many times various behavioral issues develop unhealthy financial habits in a person, such as gambling or compulsive shopping. Many people overwork themselves to hoard money and often avoid finance responsibilities that must be urgently dealt with. Some people have a tendency to hide finances from their partners that may cause household conflicts followed by significant negative effects on their mental health. Such reasons also play a pivotal role in why people can seek financial counseling. Additionally, many mental health experts 7 believe that poor money saving and spending habits can be the symptoms of an underlying mental health condition.

When To See A Financial Therapist

When To See A Financial Therapist

If a person is thinking of seeking therapy from a financial counselor, then they should think about their relationship with money, how they react to finance-related matters, what are their negative habits regarding money and are those habits taking a toll on their mental health. If you feel that money-related issues and unhealthy habits are negatively affecting your overall well-being or you face extreme difficulty when it comes to saving, budgeting, investing, and financial planning, then you should consult with a financial therapist.

The following are some of the red flags that indicate one should seek financial counseling immediately:

  • Unhealthy habits, such as gambling, compulsive shopping, spending money on unnecessary things
  • Chronically paying bills late every time
  • Hiding savings or money-related issues from partner
  • Avoiding or being afraid to handle finance-related issues
  • Overworking oneself to hoard money

Read More About Gambling Disorder Here


Financial psychotherapy combines finances with mental health treatment. It helps people cope with financial stress, effectively handle money-related issues, make beneficial decisions, and adopt healthy finance-related habits. If you get stressed over money-related problems frequently or experience difficulty handling the same, then a few sessions of financial counseling can benefit you. If it seems like seeking such therapies is another expense that will include more problems in an existing difficult situation, then try to consider it as a beneficial investment that not only will provide you with financial wellness but also help you to build financial security.

👇 References:
  1. Handbook of Consumer Finance Research []
  2. Journal of Financial Counseling and Planning Volume 26, Issue 2 2015, 172-186. []
  3. Farrugia, M., Yu, H., Ma, S. J., Iovoli, A. J., Erickson, K., Wendel, E., Attwood, K., Wooten, K. E., Gupta, V., McSpadden, R. P., Kuriakose, M. A., Markiewicz, M. R., Chan, J. M., Hicks, W. L., Jr, Platek, M. E., Ray, A. D., Repasky, E. A., & Singh, A. K. (2021). Financial Counseling Is Associated with Reduced Financial Difficulty Scores in Head and Neck Cancer Patients Treated with Radiation Therapy. Cancers, 13(11), 2516. []
  4. Richardson, T., Elliott, P., Roberts, R., & Jansen, M. (2017). A Longitudinal Study of Financial Difficulties and Mental Health in a National Sample of British Undergraduate Students. Community mental health journal, 53(3), 344–352. []
  5. Papp, L. M., Cummings, E. M., & Goeke-Morey, M. C. (2009). For Richer, for Poorer: Money as a Topic of Marital Conflict in the Home. Family relations, 58(1), 91–103. []
  6. Friedline, T., Chen, Z., & Morrow, S. (2020). Families’ Financial Stress & Well-Being: The Importance of the Economy and Economic Environments. Journal of family and economic issues, 1–18. Advance online publication. []
  7. Black D. W. (2007). A review of compulsive buying disorder. World psychiatry : official journal of the World Psychiatric Association (WPA), 6(1), 14–18. []