What Is Financial Therapy, and How Does it Affect Financial Planning?

Send us a text


Financial Advisor, Stefanie Pickard, talks about Financial
Therapy, and how she utilizes her training to help clients
understand their financial past, how those biases impact their
outlook on money and decision making, and how they can work
through those barriers towards financial freedom.


An ideal client for financial therapy is someone who recognizes
that they are having mental and emotional blocks towards
finances, and who can have an open mind to changing.


It’s believed that most money behaviors are rooted in family and
experiences with money throughout a lifetime. Financial therapy
focuses on exploring and digging out those various relationships
and events so that when you do behave in a certain way that goes
against your best interest financially, you can identify the
reason.


Financial therapy can also help couples who have different
opinions and approaches towards money, in turn creating conflict.
Applying therapy techniques to both parties within the
relationship can help them explore their individual relationships
with money, understand the other party’s perspective and
experiences, and provide perspective on how to support each
other.


Problematic financial behaviors that might be a red flag include
overspending, compulsive buying, apathy towards money,
workaholism, anxiety surrounding money and the feeling of not
being able to get finances under control, and financial abuse
towards a partner.


There are a few tools used within financial therapy to help
clients:


·         The primary tool is called
Klontz Money Script Inventory (KMSI), which is an assessment
questionnaire, which will reveal certain money tendencies and
beliefs, called “scripts”. The four scripts are:  Money
Avoidance, Money Status, Money vigilance and Money Worship.


·         The money genogram is when a
client draws a family tree that includes any person who has had a
financial influence within their life. Doing this allows the
client to then assess how each of these individuals impacted
their beliefs and biases.


·         The Dow Jones exercise is when
a client draw plot points on, above, or below a center line that
are positive or negative money experiences in their life. Doing
so allows the client to identify trends and visualize the
incidents throughout their life that had a financial impact on
them and are still influencing them today. 


·         Another tool is having a
client write out life aspirations and authentic goals. The client
starts by writing down goals with no parameters or censoring
whatsoever. They then narrow them down according to their level
of enthusiasm, and eventually focus on the goals that are
feasible, determine a dollar amount that is required to achieve
it, and what steps need to be taken to make that goal
concrete. 

If you have questions regarding how Stefanie can help you reach
your financial goals, please do not hesitate to contact us at
(503) 227-0200, and we can connect you accordingly.