Can a Financial Therapist Fix Your Relationship With Money?

In recent years, financial therapists have become a more sought after professional when it comes to alleviating the stresses of money and debt in our lives. And there are many reasons for this, which include the increase in student loans, the financial literacy gap, the effect our finances have on our mental health and more. Now more than ever, people are reaching out to financial therapists for help in this area. 

What is a financial therapist?

A financial therapist is a person who helps her clients deal with the emotional stress of financial issues. Financial therapists provide emotional support as well as advice on any financial related questions and problems the person may be facing. This could include paying off student loans, managing monthly bills or helping you cut back on unnecessary spending.

Recent studies show a connection between financial stability and one’s mental health. The likelihood of one having a mental health issue is three times higher for a person who also has debt — these mental health issues include depression, anxiety and psychotic disorders. And the connection is even higher between suicide and one’s debt — those who commit suicide are eight times more likely to have been in debt.

This connection between finance and mental health has led to an increased need for financial therapy — a field that combines psychology with finance and budgeting. It’s a field that looks for the reasoning behind the poor financial decisions we make that may lead us to stress and debt. 

In a world where money and finances are such a taboo topic (and one that most people do not feel comfortable opening up about), financial therapists give their clients a space where they can be open and honest about their money situation. Clients feel safe and free to discuss their finances with a professional, without any judgment from the other party or embarrassment being brought on to the client herself. 

There is also a financial literacy gap when it comes to men and women. Women have been found to be less knowledgeable about personal finances than men are, not only in the United States but around the world as well. A recent study that asked participants questions regarding personal finance found that 38 percent of men got all three questions correct, while only 22 percent of women scored equally as high.

This gap was found among both single and married women, as well as economically disadvantaged and those who are in better financial circumstances. And women of all ages, even younger women who have received formal education. 

One’s financial literacy directly affects that person’s financial planning, especially when it comes to investing, planning for retirement and handling loans.

And not only are women less knowledgeable when it comes to money, they are also less likely to ask for help when it comes to their finances, according to the same study. 

Reaching out to a financial therapist

There are a lot of reasons why one would want to work with a financial therapist. We've rounded up the three most common below:

1. Unhealthy habits with money.

This could include gambling, excessive shopping, over subscribing to unnecessary things, overall fiscal irresponsibility. This person might be spending too much money on “wants” rather than “needs,” and it is affecting her life in a negative way. 

2. Feeling overworked in order to keep up with bills.

This person may be working two or three jobs in order to pay off her monthly bills. This could simply mean she needs a better way of managing her money and her stress that is being caused by the constant feeling of being behind on something. 

3. A person’s actual physical health taking a toll.

This person may be experiencing anxiety, depression, lack of sleep and more due to their finances. This person may need counseling in order to help alleviate the effects of their finances and the stress that surrounds it. 

Each person who seeks a financial therapist for a different reason may require a different type of therapy and plan for therapy than the next. Financial therapists mainly provide emotional support for mental and physical health issues that are caused by the stress of finances, loans, unhealthy spending, etc. These therapists offer strategies, techniques, advice, and more for those when it comes to alleviating and dealing with this specific stress — mainly in a health-related way, not a financial way. 

They also help their clients to understand the cause of their financial troubles. They help them to analyze exactly what is causing these issues, not the money specifically but the reasoning behind their decision making when it comes to money. Why are they spending money on monthly streaming subscriptions instead of groceries? Or online shopping rather than student loans? Financial therapists provide that type of psychological analysis that these clients need in order to fully grasp how to fix their issues with their finances. And they focus mainly on this itself.

But most financial therapists do not also provide specific ways in which to tackle these financial issues from a numbers perspective. Financial therapists work on the mental health cause and effect areas surrounding money, the reasoning behind the issues and more related to this. But they are not working to create a five-year plan to end their client’s student loan debt. For this, you will need a financial coach. They also do not advise on investments, which is taken care of by financial planners. They do not organize your spending receipts, which would be completed by a bookkeeper.

How to become a financial therapist

There are several steps to becoming a financial therapist. Let us walk you through them:

Earn a degree.

First, in order to become a Certified Financial Therapist (CFT), one must obtain a Bachelor’s degree in a finance or mental health related field. These include, but are not limited to finance, economics, psychology, and therapy or counseling. You must then be accepted into a CFT post-graduate program.

Get trained.

Those pursuing a CFT certification must complete the competency training required by the Financial Therapy Association. Candidates also must complete additional self-study to show competency in the Financial and Mental Health competency categories. 

Gain experience.

Applicants have to complete a list of experience requirements before being admitted to receive their certification. They must complete 500 hours, and 250 must be direct client service hours. These can include professional presentations, peer-reviewed research, and teaching, among others. 

Pass the exam.

They must complete and pass an examination with 100 multiple-choice questions in two hours. 

Do therapists make good money?

People in this field may make around $42,000 a year, on average, according to Glassdoor, with $32,000 on the lower end and $53,000 on the higher end of the spectrum. Some people also report making an hourly wage, rather than a salary for this career path.

For example, in Raleigh, North Carolina, one Glassdoor respondent reported making $17 an hour in this field after five to seven years of experience and working full-time at a hospital. Another respondent, who lives in New York City and works for a non-profit with over 10 years of experience, is making a salary of $39,500 a year.

The amount of money a financial therapist makes will depend on the person’s geographic location, years of experience, schooling, specific degree, continuing education and more. A person will also, on average, make more money working for a hospital than they likely would working for a non-profit organization. And this person will likely make more as well if they are offered a salary, rather than an hourly wage. But certain hourly wages with overtime may compete with, and even surpass, that of a salary in this field. 

For all other money related issues, check out our Money page in The Community to hear what other women are saying about their finances and the financial literacy gap.

Don’t miss out on articles like these. Sign up!