As the coronavirus pandemic suddenly interrupted everyday life, plunging the country into an unexpected recession, a money movement borne out of the last economic upheaval could again help the millions of Americans left stressed and uncertain about their financial future.
Called financial therapy, it is a psychologically focused version of financial planning that integrates personal finance and the complex nuances of behavior and emotion while leaning on disciplines of psychology, marriage and family therapy, and social work.
It also acknowledges the systemic, social, and macroeconomic issues that are tied up in people’s personal finance decisions, which have to come to the fore during this unprecedented time.
“Money issues are a regular part of life,” said Nathan Astle, a board member at the Financial Therapy Association. But those issues may feel magnified when “it seems like the whole world is going crazy or collapsing, or at least chaotic.”
‘Money is still such a taboo topic’
The financial therapy movement originally gained steam a decade ago, during the Great Recession when “a bunch of therapists got together and said hey, ‘a lot of our clients are bringing in money issues and we don't have any training, or really any knowledge on how to treat money disorders and money problems with our clients,’” Astle said.
Like other therapists whose role and responsibility is to allay fears, challenges, anxieties, and traumas, a financial therapist does the same thing for a person’s finances and attitude towards money. However, there are inhibitions with taking the first step.
“Money is still such a taboo topic,” said Erika Rasure, a financial therapist and who helps host the new podcast “Let’s Talk Money” from Yahoo Money’s sister sites, Cashay and BUILT BY GIRLS. “I truly think that people are more willing to talk about their sex lives than their financial lives.”
She cites socio-economic indicators that prohibit people from talking about their finances, namely the shame and guilt towards money.
‘Helping people get to the root causes’
Financial advice isn’t one-size-fits-all and Rasure is a crusader for dismantling some of the “conventional wisdom” that’s been passed down through generations partly due to social conditioning.
Rules of thumb like saving 10% of your income or investing in the stock market straight away aren’t realistic for a lot of Americans. Aside from the confusing messaging that comes with saving and investing, those things operate on the assumption that everyone is earning enough money to support themselves and there’s money left over when that isn’t the case.
“It's really about helping people get to the root causes those more subconscious, things that they might not be acutely aware of,” Rasure said, “And that's what financial therapy does, it helps to dig a little bit deeper and work through some of those things.”
‘Work themselves out of a job’
Rasure said the movement is gaining “amazing traction” in the last decade, thanks in large part to younger generations who value self-care and recognize the importance of talking to a completely objective third-party about their feelings.
But anyone who’s at a crossroads of life, struggling with debt or overspending, exhausted by keeping up with the Joneses, or needs to reexamine their relationship with money may want to seek out a financial therapist to help sift through those feelings and provide tools for a healthy financial outlook.
“I think the job of any therapist, financial or otherwise, is to work themselves out of a job,” Rasure said.
Rasure talked with Rose in the first episode of “Let’s Talk Money,” who is in the thick of exciting — albeit costly — milestones. She and her fiance had bought a house, and their wedding was only days away after being postponed by COVID-19 when she spoke with Rasure.
The session helped Rose deal with some self-inflicted guilt and make sense of being caught between two worlds of wanting to save for the future, but spend in the present, all while a pandemic rages on in the background.
“I think that spending some time sort of reviewing how my budget is put together, but also how it aligns with my values and whether my values have changed or are changing or whatever feels like a really useful exercise,” Rose said at the end. “Um, once the wedding thing is done.”
‘Access and environments and conditioning’
Patients come to Rasure with feelings that run the gamut of confusion about investing to overspending, but she said lack of self-worth is the most prevailing theme.
“People have a really hard time taking ownership of their financial story or their financial life and they don't know where to start,” Rasure said. “They know they should be doing it and then there's a whole bunch of guilt around the ‘shoulds’ part.”
While money experts often preach the benefits of financial literacy, that doesn’t help stop people from feeling shame that they don’t know what to do or allowing their parents’ views on money to determine their feelings.
Rasure also sees this more from women and people of color, who make up the bulk of her clients. It also underscores the gender and racial wage gap, which could widen during the pandemic because these groups of people have been disproportionately hurt by the current job losses.
“A lot of it comes down to access and environments and conditioning which you grew up in,” she said.
Astle agreed and said many of people’s financial woes are not as reflective of the individual, but more of an indictment of the systems, especially now.
“There’s definitely an increased need right now,” for financial therapy, Astle said. The “pandemic is exposing some structural failures in our systems and how governments, communities, and businesses support people.”