Recently, two different people come into my office. Even when they have similar questions and assets, their answers may be different because finances are personalized. Money decisions must match our understanding and emotions, as well as solid financial principles. There is never only one standard answer.
One just got a job offer. Marie is delighted that the new company wants her. She has felt underappreciated in her current company despite having been there for years. The company has been having many financial problems as of late and she has survived many layoffs.
She has the education to figure out the financial details. She cannot make this decision alone. Her anxiety about leaving and making change even for a better salary is preventing her from thinking clearly. She knows it so asks for help.
The second person just got an inheritance. One hundred thousand dollars is the most that he has seen in his life. Yet, as soon as the topic of money comes up – his stress level rises, and his voice is almost shouting: “How do I know what to do?”
So far, he has been talking about the extreme approach: put nothing in the stock market and buy insurance. He needs a financial education to understand the implication of each possible decision.
What is the common denominator in these stories? Fear. Fear of doing the wrong thing. Fear of making a mistake and regretting it. What appears as indecision is a lack of confidence and information because they think there is only one right answer.
Taking the time to talk through decisions financially and emotionally, along with laying out multiple options is helpful to everyone. When the fear diminishes, the financial decision making can begin.
Financial Therapy cannot solve all the problems of the financial world, but it does make for happier and informed clients. With more understanding of themselves, they make better decisions and are prepared to consider all the options. They understand their past behavior with money and how to address their fears.
This process takes a little bit longer and the questions have to be different. Yet, for those willing to look at all sides of money behavior, they become more contented savers, investors, and spenders. The goal of financial therapy is to
