Financial Psychologists Focus on Money Issues

It’s a sign of the economic times: As people struggle with recession repercussions, more psychologists are being called upon to help clients resolve money issues—and that has given rise to a brand-new specialty called financial psychology.

This field focuses on people’s relationship with money—a deeply dysfunctional, emotionally charged relationship for many of us. Financial psychologists may help individuals think through financial goals, work on money management, rein in a spending problem, or cope with a financial crisis. In couples or family therapy, financial psychologists may help newlyweds marry their bank accounts, couples hash out budget conflicts, or families talk through contentious inheritance issues.

New Field of Financial Psychology

There’s nothing new about these concerns, of course. But the idea of addressing them with the help of a mental health professional who is cross-trained as a financial counselor or planner is a growing trend. There are signs it may be an idea whose time has come.

Currently, there’s a movement afoot to create a new division of financial psychology within the American Psychological Association (APA). In October, the APA magazine Monitor on Psychology ran an article about the burgeoning specialty. And in September, the Financial Therapy Association held its third annual conference for professionals in the field.

How Money Affects Mental Health

An unhealthy relationship with money may affect emotional well-being in various ways:

• Money stress. For the past five years, the APA has commissioned an annual, nationwide “Stress in America” survey. Every year, money, work, and the economy have topped the list of most stressful issues for Americans. In the most recent survey, for example, three-fourths of participants said money was a significant source of stress in their lives. One goal of financial therapy is to help people learn skills for managing both money and stress.
• Financial anxiety. A recent study from the London School of Economics and Political Science and Cambridge University looked at financial anxiety—an uneasy attitude toward dealing with personal finances. The researchers found that people often avoid financial information when it makes them anxious—and that’s a recipe for disaster. Another goal of financial therapy is to help people overcome this self-destructive pattern.
• Marital conflict. Among married couples, financial conflicts are often particularly nasty and long-lasting, and research has shown that they’re a strong predictor of divorce. Fortunately, arguments over money aren’t inevitable. In a study from Utah State University, lower levels of financial conflict were associated with good communication, respect, commitment, and fairness—in short, the kinds of relationship skills that spouses often develop in couples therapy.

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