Once taboo topic now critical therapy issue

By Joe Lowrance, Psy.D.
February 18, 2011 - Last updated: May 31, 2011

Money is increasingly emerging as a topic in the psychotherapy setting. Our current recessionary times have brought financial matters to the fore in the lives of the general public and our clients as well, but in addition, a budding movement appears be taking root.

Long a taboo subject of conversation in our culture, money has been an issue often avoided by both client and psychologist. Mounting empirical research and clinical literature connect financial psychology with a number of mental health concerns. As a result psychologists are increasingly equipping themselves to address their clients’ money-related struggles.

Just what is financial psychology? It refers to the psychological underpinnings of an individual’s relationship with money. These foundational components include the individual’s attitudes, beliefs and cognitive processes related to money and the range and intensity of emotions money generates.

Financial psychology significantly directs a person’s spending, earning, giving, saving and investment behaviors and can impact the person’s mental health. Some individuals’ self-concept and the way they perceive and relate to others are markedly influenced by their financial psychology. Much of an individual’s financial psychology, if left unexplored, resides outside of awareness.

Research continues to articulate financial psychology’s role in a variety of mental health issues and the pervasiveness of mental health struggles with a financial psychology component. APA’s annual Stress in America surveys consistently rank money as the No. 1 stressor.

While the surveys do not explore the causes of money-related stress, the reasons are typically multi-dimensional. Frequently causes of money-related stress are significantly associated with problematic financial psychology which undermines healthy spending, earning, saving, giving and budgeting habits. Problems related to financial psychology often appear in conjunction with other mental health issues such as depression, anxiety or relationship struggles.

Financial condition or the ability to attend to one’s financial needs and obligations has increasingly been correlated with mental health and financial psychology. While major life events – a job loss, health issue or economic downturn – can severely impact an individual’s financial condition, consistent financial self-care over time can help mitigate the negative effects of such occurrences.

Sustaining consistently healthy financial self-care is significantly rooted in healthy financial psychology. Patterns of behavior contrary to financial health may indicate problematic financial psychology and the misuse of money to meet psychological needs.

A problematic relationship with money can have negative consequences beyond an individual’s distressed financial condition and mental health struggles. Financial psychology commonly plays out in relationships.

Research presented in The State of Our Unions’ report (2009) by the National Marriage Project and the Center for Marriage and Families, describes the challenges when two individuals, with unique financial psychologies and money handling behaviors come together to form a relationship. Jeffery Dew, Ph.D., a professor at Utah State Univer-sity reports that conflict related to money issues predicts divorce more so than any other type of disagreement.

Children are greatly impacted by the financial psychology of the family. The 2009 APA stress survey finds that children are nearly twice as likely to worry about their family’s financial difficulties as their parents perceive. The survey further indicates that children and youths rank family money-related stress as the second highest rated source of stress, behind only managing school related pressures.

Caregivers play a critical role in the development of children’s financial psychology, influencing patterns of spending, saving, giving and being in relationship with self and others related to money.

James Gottfurcht, Ph.D., describes financial related psychotherapy as “therapy to reduce or resolve the psychological, relational, and behavioral challenges people have with money.” The difficult economic times and growing evidence of the connection between mental health and financial psychology have led more psychologists to raise the subject of money with their clients, helping them to address one of the most relevant and complicated of issues.


Joe Lowrance, Psy.D., is a clinical psychologist in Atlanta. He is on the editorial board of the Journal of Financial Therapy, and associate producer of the documentary film Money and Life, He is president of www.FinancialPsychologyCeus.com. His e-mail is: joelow123@comcast.net.

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