Blogger Zina Kumok discusses the facets of financial wellness and how Grownups can assess their own financial health and seek help if necessary.
Anyone with substantial assets knows how important it is to work with a financial planner to ensure their financial future. But what about young people and those in smaller income brackets—who do they look to for guidance?
The growing financial wellness industry aims to fill that service gap, as well as encourage people of all income brackets to examine how money affects their mental health on a daily basis.
What is Financial Wellness?
Financial wellness is how economically healthy you are. It’s not so much about the status of your portfolio as it is about your personal relationship with money. How does it affect you emotionally? How educated are you on the financial topics that affect your life?
Derek Lawson is a former CERTIFIED FINANCIAL PLANNER ™ professional, now studying Financial Planning and Financial Therapy at Kansas University, who became interested in financial wellness after four years of working as a planner. It became clear to him during that time how many people’s issues with money were behavioral, not economic.
He saw individuals who were hiding financial goals from their spouses. He had people break down crying in his office during appointments. Even though he was a financial advisor, he hadn’t been trained to advise his clients emotionally.
In the last few years, the financial therapy industry has grown by leaps and bounds to address this need. Financial therapist Amanda Clayman said she began noticing a shift after the 2008 recession. People began realizing you didn’t have to be a shopaholic to need financial therapy.
“When you find yourself repeatedly falling short… or if you feel such a high level of anxiety that you can’t even get started, that’s when you need a therapist,” Clayman said.
According to the Financial Therapy Association, financial therapy involves “the integration of cognitive, emotional, behavioral, relational, and economic aspects that influence financial well-being, and ultimately, quality of life.”
Clayman says that there are usually two reasons why someone comes to see her. Either something has changed how they relate to money or they’ve realized that they need to change how they interact with money.
How to Embrace Financial Wellness in Your Life
Pam Horack, CFP®, of Pathfinder Planning LLC said she frequently has clients who have no idea what their partner’s goals are. When there’s a lack of communication and trust, financial therapists can step in and help.
“People really have to buy into the planning and behavior piece of it before they’re ready to make this change,” Horack said. “The people that come to me are already on board; they’re ready to plan.”
Clayman said people who overeat and people who overspend have to try similar tactics to break their habits.
“Similarly, you can’t [totally] abstain from food and you can’t abstain from [spending] money,” she said. “Being able to be self-regulated in those areas is what the definition of health is in those areas.”
If you’re looking for a financial therapist, you can find one through the Financial Therapy Association. Your CFP® professional may also be able to recommend one to you; many work in tandem with each other.
Consider whether you’re someone who could benefit from a healthier perspective on money. Financial therapy isn’t necessary for everyone, but it can be a helpful step to a better relationship with your finances.
While Society of Grownups hopes this information is useful, it’s only intended to provide general education. It’s not legal, tax, or investment advice, and may not apply or be useful to your specific financial situation. If you need recommendations geared to your personal financial situation, schedule time with a financial planner.
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