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Money problems? Here's how financial therapy might help


As a marriage and family therapist, Ed Coambs has a knack for open and honest conversation. In his practice in Charlotte, North Carolina, he facilitates communication between his clients — many of them couples — and prioritizes it in his own life.

But he wasn't always so attuned to his own emotional needs. When Coambs and his wife first got married, he considered becoming a financial planner. But then he started seeing the same money issues creep up in his own life.

For one, his wife is the breadwinner in his family, and though logically he knows that dynamic shouldn't bother him, it was still having an effect on his self esteem and relationship with his wife, he tells CNBC Make It.

He switched career paths to counseling but says learning more about psychology and helping others wasn't enough to alleviate his own emotional distress. He was still experiencing anxiety, shame and fear in his financial life. That's when he decided to seek out help himself from a professional specializing in financial therapy.

"While I externally would say that I have no problem with women earning more than men, that ended up not being my internal experience," Coambs says. "What I have come to accept and make peace with is that, like many people, I internalized very conflicting views about the roles of men and women, work and money."

He says working with a financial therapist has allowed him to process his emotions in a non-judgmental space. Feelings of shame, anxiety and fear related to money have decreased, he says. At the same time, he feels more grateful and safe in his financial life.

"I wanted to delve through the deeper layers about what I've inherited about how a man should be a provider, a man should earn more than a woman," he says. "Financial therapy starts to melt away some of the stress. It really is a safe space to explore your personal relationship with money."

What is financial therapy

Financial therapy is a relatively new field that combines financial planning services and mental health treatment. Megan McCoy, director of the Personal Financial Planning Masters Program at Kansas State University and a member of the Financial Therapy Association's (FTA) Board of Directors, tells CNBC Make It that clients get the best of both worlds when they see a financial therapist: They can begin to process their underlying feelings about money, while working out a plans for retirement, savings, investments and other goals.

Financial planners who enter into financial therapy understand that you can make the perfect plan on paper, but if you have hang ups about money, anxieties and fears about money, you’re not going to make that plan work.
Megan McCoy
Kansas State University

McCoy adds that there are two primary types of financial therapists: Those who come from a counseling background and add financial competencies, and those who come from a financial planning background and add counseling competencies. Clients should pick the one that better fits their specific needs.

"Financial planners who enter into financial therapy understand that you can make the perfect plan on paper, but if you have hang ups about money, anxieties and fears about money, you're not going to make that plan work," McCoy says.

Though money and emotions have been tied together since the beginning of time, financial therapy as a practice is so new — McCoy says it didn't really start developing until 2008 — that 2019 is the first year that financial therapists can get certified with the FTA. The certification ensures they are able to help clients with relationship disputes and disagreements, and depression related to finances.

Rick Kahler, a financial planner and therapist, is a pioneer in the field, and co-founder of the FTA. In the 1990s, he and a group of researchers studied the psychological and emotional aspects of money.

"What we found is 90% of financial decisions are made emotionally," Kahler tells CNBC Make It. "The problem is that financial advisors and planners are not trained in behavioral change or communications, and therapists are not trained in money. There's a hesitation in both camps to add competencies in the other."

That's all changing with financial therapy.

Where money and emotions meet

Dr. Alex Melkumian, founder of the Financial Psychology Center, tells CNBC Make It he was inspired to get a clinical psychology doctorate with an emphasis in financial therapy after practicing family therapy in Los Angeles at the beginning of the Great Recession. Many of his clients, he says, were consistently bringing up money worries and financial stress, and he wanted to be able to talk with them more effectively.

In fact, money is the number-one source of stress for Americans, according to a report from BlackRock. And while everyone knows that they should save more and watch their spending — "just like everyone knows not to overeat," Melkumian says — there is often a disconnect between what they know they "should" do and what they actually do.

"Everybody knows to save for a rainy day, but it doesn't happen," Melkumian says. "So why doesn't that happen? A lot of times, it's tied to emotions, an emotional journey. In our culture we think of money as rational, but human beings are not rational."

In our culture, we think of money as rational, but human beings are not rational.
Dr. Alex Melkumian
Founder, Financial Psychology Center

"A lot of it comes down to having conversations that aren't, unfortunately, that common yet in our culture," Melkumian continues. "We think of money as strictly transactional, but we don't consider all of the layers."

Coambs, the Charlotte-based therapist, says that financial therapy can help people recognize that experiences they had growing up that may seem unrelated to money — such as their parents' divorce, an addiction or some sort of assault or other trauma — might actually inform their financial habits on an subconscious level. Such adverse developmental experiences, he says, have a "profound impact on people," often times for life.

"If you recognize that you have problematic financial behaviors and you've tried on your own to get them right and you haven't, that's not on you," Coambs says. "Therapists help you understand the mind, how it shapes and grows."

Working out family issues

While a traditional therapist might not have the proper background or ability to talk through money issues — Coambs and the other professionals interviewed for this story all said that traditional therapists tend to avoid the topic of money — it is a major source of discontent and stress within relationships of all types, and many couples don't want to have money conversations because they consider them too difficult or embarrassing.

But open communication is the foundation of any healthy relationship. It's important, then, for financial therapists to work with both partners and get both perspectives, Coambs says.

"A lot of our distress about money starts in interpersonal relationships, where difficult emotions emerge but never get dealt with," Coambs says. "Positive emotions get minimized or dismissed, making it hard to experience joy around money and what it helps you do."

Once each partner is aware of the other's story, the financial therapist can help the couple process and move forward. A skilled therapist, Coambs says, will be able to meet a client's experiences with empathy, draining difficult emotions and creating "space for the pleasurable emotions to emerge."

When to hire a financial therapist

Kansas State University's McCoy says rates for therapy and the amount of sessions needed vary, just like with a traditional therapist. She encourages people to look on the FTA's website for qualified therapists in their area, or search on Psychology Today for professionals specializing in money or finance. Financial planners tend to be more expensive, while a therapist might be able to accept insurance. People interested in seeing a financial therapist should look for a "fee only" practitioner.

Kahler, the co-founder of the FTA, says that it should be clear to both the client and the professional if the sessions are working and they are making progress. Financial decisions, like saving more, for example, are concrete and measurable.

"The process may look to be really slow when you're working through emotional trauma, and then all of a sudden if you get that emotional piece resolved, boom here comes the financial proof," Kahler says.

McCoy believes all couples would benefit from seeing a financial therapist, particularly before they get married ("divorce is way more expensive than therapy," she says), as would anyone who is routinely stressed out or anxious about some part of their finances.

"If at the end of the day you just need a mutual fund and need to get your portfolio established, you should see a certified financial planner," McCoy says. "But if your issue is that you don't trust your spouse with money or every time you think about money you break out in sweats, you should see a mental health professional," or trained financial therapist.

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