financial therapy
A practice combining financial planning with therapeutic techniques to address the emotional aspects of money.
Example
“Financial therapy helped him understand why he sabotaged every savings plan.”
Memory Tip
THERAPY for your FINANCES — treating the emotional roots of money problems.
Why It Matters
Financial therapy matters because money decisions are not purely logical and are deeply connected to emotions, habits, and past experiences. Understanding the emotional side of money management helps people make better financial choices and build healthier relationships with their finances, leading to improved long-term financial wellbeing.
Common Misconception
Many people assume financial therapy is just therapy for those in financial crisis or debt, when actually it benefits anyone who wants to understand their money behaviors. It addresses money anxiety, overspending habits, and financial avoidance regardless of someone's income level or financial situation.
In Practice
A person earning 75,000 dollars annually might work with a financial therapist who discovers their overspending of 500 dollars monthly on impulse purchases stems from childhood feelings of deprivation. Through combined financial planning and therapeutic techniques, they address the emotional triggers, create a realistic 2,500 dollar monthly budget, and develop healthier spending patterns that align with their values.
Etymology
Emerged as a formal field in the early 2000s combining psychology and financial planning.
Common Misspellings
Build a budget and track your spending
Related Terms
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See Also
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