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Struggling to manage your money? You may need financial therapy.

  • Financial therapy is a practice that looks at our relationship with money and the psychological, behavioural or cognitive beliefs we have around it.
  • It can help get to the root of some of the issues you may have around money, such as over spending.
  • Australian financial therapist Jane Monica-Jones explains how to tell if you need financial therapy.

Financial therapy could be the key that helps you better handle your finances.

Australian financial therapist Jane Monica-Jones told Business Insider Australia that financial therapy looks at our relationship with money – how we manage or undermanage it – and what psychological, behavioural or cognitive beliefs we have around it.

Monica-Jones, who has as written the book The Billionaire Buddha and hosts the Financial Therapy podcast, explained that she is a therapist who focuses on money. For example, she’d work with someone who may have self-esteem issues that they project onto money.

“So if every time that you feel bad about yourself, you go and splurge on your credit card, we’d say that might be a self-esteem issue,” she said.

Money is more than just numbers

Monica-Jones explained that money goes beyond being about numbers.

“We think that money is often just numbers but actually it is far deeper because it’s dealing with issues of survival,” she said.

“If we look at money as a tool for survival, in its basic form it’s a tool for you to put a roof over your head, food in your belly and clothes on your back. If you have issues with being able to manage that tool, then those things are at risk.”

For example, if you get paid $500 but you have self-esteem issues, you might gamble it away or blow it on your credit card – thus you’re not protecting your survival.

How we relate to money has to do with our socialisation, Monica-Jones said, which is made up of what we learned from our caregivers and everything we’ve gleaned in life up until now. It’s about what is modelled in your life and not necessarily about what was taught.

“If our parents were terrible at money, we may learn how to be terrible with money,” she said. “Or alternatively, then we reject that, so we could decide to go our own way with our finances.”

Money should also be seen through the lens of our relationship to it.

“Am I someone [who] doesn’t believe that I should have what I have so I self-sabotage and get rid of it all? Or do I hold on to it so hard that I don’t allow myself any pleasure or joy in my life?” Monica-Jones explained.

An idea Monica-Jones often hears is that “you can’t be emotional around money” but it’s a concept she doesn’t completely agree with.

“That’s a little bit silly because emotions are woven into the fabric of money. As in we worry about ourselves and money – we are scared of our futures when it comes up,” she said.

While this doesn’t mean we should be getting overly emotional about money, what Monica-Jones believes is that we can be more compassionate to ourselves and others when it comes to money. It can help us understand what charges us up when it comes to finances or help us assess whether we’re more of a saver or a spender.

“The risk of saying that platitude, which is often said, is that we can be a little unemotional about what we do with money, meaning that we might [choose] profit over the planet and people,” she said.

How to know if you need financial therapy

Monica-Jones explained that in Australia a financial counsellor works as a type of case manager for people who may have problems with debt, creditors or are unable to do budgets.

“A financial counsellor’s job is very much about being an advocate for a person that may be in a difficult financial situation,” she said. “They might be counselling, meaning that they might be supporting, but they’re not going into a deeper therapeutic relationship.”

In terms of financial therapy, Monica-Jones shared some examples of when you might need it.

You could be overspending or experiencing chronic under-earning, which is closely linked to low self-esteem, where you undervalue who you think you are. While in some cases chronic under-earning may be due to your circumstances, other times it may be that you undervalue yourself and you stop striving for greater success.

You may need financial therapy if you’re in “financial chaos”, which ranges from not knowing how much is in your bank account to constantly missing due dates on bills and even getting fines.

Another circumstance is if you’re overspending on your credit card.

But one thing to remember is that financial therapy also has a lot to do with your mental health.

“We know that mental health issues, of course, can be prohibitive to managing money,” Monica-Jones said. “But also having issues with money can affect our mental health, so they’re symbiotic.”

The first step to dealing with your financial issues

For those starting to look at ways to get their finances back on track, the first thing Monica-Jones advises is to understand that we’re all human.

“Most of us were not taught how to manage money and we are often not taught how our psychological socialisation and behavioural issues will affect our relationship with it,” she said. “So give yourself a break.”

From there, rather than become judgemental, be curious about how you handle different situations in your life.

“What happens with me when I have a hit to my self-esteem? Do I go and blow a whole lot of money? That might be an area that I can start looking at improving my self-esteem around,” Monica-Jones said.

The final aspect is to be self-compassionate because again, you may not have been taught how to properly handle money.

And then, you can work your way through the variety of resources available, whether they’re websites or speaking to a financial therapist or financial counsellor.

Courtesy of Business Insider Australia, Sharon Masige, Oct 13,2020

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