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Financial
Therapy
With the exception of people dealing with
health care challenges, for most of us, money dominates much of our lives.
Irrespective of pay scale, most of us worry at the end of a pay period
whether we will have enough to pay all of our bills. We question how much we
will need to maintain our lifestyle in retirement, and we are overwhelmed by
the number we are expected to raise and our means for achieving it. Sometimes
we scrimp and other times we splurge. But most times, we feel remorseful in
terms of how, why, and where we spend. Yet, money is a medium with which we
engage every single day. It and our feelings surrounding it are omnipresent.
Money is so much more than just a means of
exchange. It signals status, power and influence. Consequently so much of our
ego and feelings of self -worth are wrapped up and influenced by our
relationship with money. How we interact and are influenced by money, perhaps
more than any other single input, determines the status of our mental and
physical health. This is because money can be offered, in addition to power
and dominance, as an expression of love and respect. On the other hand, it
can be withheld to punish, dominate, control, and humiliate. On the surface,
money is represented by a meaningless piece of paper. However, in reality, it
provides a unique window into our deepest emotions and insecurities.
Notwithstanding the dominance money plays in
our lives and all of the inherent emotional baggage absorbed within it, there
is virtually no one for the public to turn for financial therapy so as to
better understand their relationship with money and ways to modify that
relationship to achieve healthier and more fulfilling outcomes. What a void!
When someone is feeling depressed or is
experiencing personal relationship issues, he or she naturally thinks of
engaging a mental health professional. Clergy are sought after for spiritual
guidance and for pre-marital consultation as well as when marital strife or
infidelity occur. But, I know no one who would call his priest or rabbi to
discuss money. Nor do people associate a mental health therapist with money
or money conversations. In fact, for both of these professions, money is
considered outside their awareness or expertise. Conversations about money
are expected to be had with stock brokers and accountants. But, these people
talk numbers and graphs and relate to money on an intellectual basis, but not
an emotional one. So, we live in a bifurcated world where the professionals
who deal with emotions are generally not trained, comfortable or competent
talking about money and personal finances. And, the professionals who deal
with money are viewed as number crunchers and ill-equipped and uncomfortable
addressing one's feelings about money.
There is such a disconnect. And, to further
highlight the anomaly, almost 3/4 of Americans identified money as the number
one source of stress in their lives. What's more, money represents the number
one source of conflicts for newly married couples.[1] Moreover, findings show
that maternal depression due to financial pressures affects daughters'
development.[2] Because stress is a major cause for disease and finances
represent one of the most significant sources of stress, it follows that
improving one's financial health translates into better physical health as
well.[3]
Financial therapy is pertinent for
individuals as well as a component of marital counseling. From an
individual's perspective, understanding one's money scripts and patterns
provides insights for the mental health professional into deeper personality
issues that may require attention. For instance, it is common for people who
have human attachment issues to replace this void with money. They use money
almost like a drug to appease and soothe their emotional pain associated with
having weak interpersonal connections. Money is substituted for deep
connections. In this way, money can become worshipped and gain deity status.
In fact, materialistic people value money and things over relationships. But,
ultimately it is most unfulfilling and creates a vicious cycle whereby the
more they spend to nurture their emotions, the less money they have and
therefore the more pain they feel. It is a negative feedback loop. People who
worship money and use money as a means of emotional uplifting can experience
psychological crisis when their money vanishes.[4] Recognizing and treating
these issues proactively pre-crisis by havin A detrimental relationship with
money often emanates from the money scripts that were learned in one's early
experiences. Awareness of detrimental money scripts is the first step in
conditioning positive changes so that money is not treated as an end in
itself, but rather as a tool to achieve what's most important. The point is
that behaviors around money such as compulsive spending, unmanageable debt,
financial dependency, financial caretaking, secrecy about money, and chronic
conflicts between spouses over money serve as gateways into a client's
deepest life difficulties. Therefore, it is a disservice for mental health
professionals to simply ignore or brush over financial aspects of their
clients' lives.
There is a middle ground where therapy and
financial planning overlap. There is tremendous power and much to be achieved
when therapeutic mental health and financial professionals collaborate and
incorporate both interior and exterior approaches to financial therapy. Just
as important as it is for the mental health professional to provide awareness
of the psychological internal issues, it is equally as important to construct
an external action plan for realizing financial health with ongoing support.
Segmenting these two aspects without any collaboration amongst the
professionals is fruitless. Proof of this is demonstrated by the magnitude of
financial insecurities and vulnerabilities despite the thousands of
educational resources and plethora of personal financial advice from which we
are bombarded. It is clear that financial advice from an author, or a stock
broker, or an insurance agent, or a television personality cannot
sufficiently identify or change destructive financial behavior.
The failure to identify and modify
destructive financial behavior is the perfect segue to introduce money and
marriage since financial health, stability and compatibility are hands down
the most vital factors which distinguished couples who remain harmoniously
married from those who divorce.[5]
Practicing marriage counseling holistically
requires the integration of financial therapy. I say this because a third of
all couples seeking couples counseling for relationship issues have some kind
of financial issues constraining the marriage.[6] Perhaps one of the
reasons that money and relationship issues overlap is due to the fact that
couples with opposite personality types attract in much the same way that
financial opposites are attracted to each other. It is quite common for
mismatched money styles such as a spender versus a saver to join and marry.
Through financial therapy, successful couples learn how to adapt their money styles
and behaviors, and learn to overcome their natural tendency to try to change
those of their partner. Appreciating a partner's diverse viewpoint and why he
or she holds that perspective enables a couple to find common ground and
shared money values and interact more harmoniously.
Although infidelity is not typically
expected to be represented through money, financial infidelity is often
expressed through debt. A vicious cycle develops whereby as the couple
accumulates more debt, they are less likely to spend time together, but argue
more about finances, and feel their marriage is unfair.[7] Feelings of
inequality or unfairness in the marriage stem from roles the partners play.
When one partner does not work or earns substantially more than the other, it
can be easy to identify a power play. Disparate family wealth can also play a
role. I commonly hear a belief that household decisions and spending should
be allocated based on earnings contributions in a way that feels like a
business partnership.
A parent/child scenario is another role
commonly played by spouses. The desire for control and power can overwhelm
the relationship. Even if couples on their own without any professional
guidance can identify their money scripts or the roles they play vis a vis
money, because money is perhaps the last remaining societal taboo, there is a
code of silence about money that is passed down from generation to
generation, making it difficult to achieve success without any support and
intervention.
Another generational obstacle in marital
financial therapy can be manifested in wives who have been raised with the
long held belief and expectation that marriage will provide economic benefits
and stability.[8] When this does not come to pass, it can wreak havoc to one's
programming, which is quite traumatic. A wife who is well provided for
financially is more likely to suppress her feelings and disregard for her
husband because of the value she places on financial security and stability.
But those suppressed feelings eventually surface and can rock the marriage.
The financial security pacified and silenced the underlying problems, but
they can rear their heads when financial security is achieved independently
or through other means such as divorcing later in life when there are more
assets to divide. Anecdotally, this phenomenon may account for why in my
practice I see a wave of wives initiating divorce. Foolishly spending is the
number one financial cause for divorce. When one spouse feels that the other
spouse spends foolishly, the odds of divorce increase by a factor of 45%.[9]
Where couples tend to spend also provides
clues as to the long term stability of the marriage. Happily married couples
spend more of their resources on homes and appliances as opposed to a disproportionate
number of divorced couples who spent more on things such as televisions and
living room furniture.[10] The interesting observation in terms of living
room furniture and redecorating is that this often provides a clue in terms
of marital strife. So often when one partner wants to redecorate and spruce
things up, she is really looking for a fresh change and a diversion from
undesired aspects of her relationship. The fresh change and facelift that she
seeks through sprucing up the place might very well be a metaphor for other
aspects of her life in which she seeks change. After the novelty of the new
furniture wears off, she realizes that she was simply putting lipstick on the
pig, which reinforces greater and deeper disappointment. There was a void and
a desire for greater happiness which the money did not fulfill. This is not
to say that purchasing new furniture or redecorating is a sign of a troubled
marriage, but it might warrant deeper observation and communication as to the
motivation and desired outcome. Conversations around money and materialism in
general and around such purchases specifically, just might be able to move a
marriage that was about to derail onto the right track.
Financial therapy touches all life stages
ranging from stresses experienced by individuals, to pre-marital counseling,
prenuptial mediation, discernment, and divorce financial analysis and
mediation. In terms of prenuptial agreements, is there possibly anything more
destructive and less romantic than lawyering up and negotiating terms of the
break-up before walking down the aisle? Yet, there are many profound reasons
to want a prenuptial agreement, particularly in second or subsequent
marriages. And, in many ways, a prenup can strengthen the marriage even for
the spouse with less money. I say this because it can diffuse resentment and
enhance attachment issues with respect to children from the opposite spouse.
It can dispel concerns that money is the motivation behind the marriage. This
is obviously such a sensitive subject, and it is ordinarily handled amongst
the lawyers diminishing the marriage to a business transaction without any
appreciation for what is most important to the spouses and their respective
families and why. When fiancés can communicate the what and the why of what
they seek in an agreement, this has the power of transforming a delicate and
potentially very hurtful and damaging process and arrangement into healthy
breakthroughs. This is why mediation and incorporating financial therapy into
mediation is so advantageous in constructing prenuptial agreements.
Discernment counseling is such an integral
part of marital counseling because for marital counseling to be effective,
both parties have to be committed. Because financial stability and personal identities
are so wrapped up around money, whether consciously or subconsciously many
pursue marital counseling because they fear the financial ramifications of
splitting and the uncertainty as to what their resources would be and how
their day to day lifestyle would present if they did separate. Demonstrating
through divorce financial analysis what their lifestyle would look like if
they did divorce can alleviate that fear and enable the couple to commit to
strengthening their marriage for the right reasons rather than out of fear.
Divorce is not necessarily a bad thing,
especially if it is pursued in a healthy manner. Sometimes the reasons why
couples came together and what they initially fulfilled for each other are no
longer present and unlikely to return. Mediating, communicating, and dividing
assets and negotiating support through detailed financial analysis most often
delivers healthy outcomes for the couple themselves and their offspring as
well. I am always stunned by the fact that everything about a divorce
involves finances. Yet, so often the spouses hire lawyers and ignore the ways
in which a divorce financial analyst and mediator can best deliver the goods
and the desired outcome. Incorporating financial therapy into divorce
financial analysis and mediation can positively alter the entire dynamic.
[1] Klontz, Bivens, Klontz, Wada, Kahler The
treatment of disordered money behaviors 2008.
[2] Family economic stress and adjustment of
early adolescent girls by Conger, Elder, Lorenz, Simons, and Whitbeck 1993.
[3][3] Muntaner, Eaton, Diala, Kessler,
Sorlie. Social Science and Medicine 1998.
[4] Sullivan Wealth Matters: It's not just
the money, it's the mindset. New York Times 2009.
[5] Grables, Britt, Cantrell 2007.
[6] Grable, Britt, Cantrell, Family and
Consumer Science Research Journal 2007.
[7] J.Dew Family Relations 2008.
[8] J.Dew Journal of Family and Economic
Issues 2009.
[9] "Bank on it: Thrifty Couples are
the Happiest" by Jeffrey Dew.
[10] Schaninger, Buss Journal of Marriage
and the Family 1986.
Content in this material is for general information only and
not intended to provide specific advice or recommendations for any
individual. LPL Financial and Gann Partnership do not provide legal, tax,
mediation, financial therapy or psychological advice or services. You should
discuss your specific situation with the appropriate professional.
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