Eat, pray and consider a financial therapist

I just finished Elizabeth Gilbert’s new book, “All the Way to the River,” a stark departure from her megahit title, “Eat Pray Love.” In this memoir, Gilbert describes how sex and love addiction, divorces, and compulsive overspending and overgenerosity led to severe financial and emotional distress, and how working with a financial therapist became a crucial part of her recovery and reinvention in mid-life. Not everyone’s financial situation gets as dire and crazed as Gilbert’s, but even subtle signs might indicate that you might benefit from a financial therapist.

Financial therapist vs. financial adviser: What’s the difference?

These folks solve different problems. Financial advisers focus on what to do with your money, like investing, saving, retirement planning, taxes and asset growth. Financial therapists focus on why you behave the way you do with money, like your emotions, beliefs, habits, past trauma and relationship dynamics.

One deals with numbers, the other with psychology. Advisers work primarily with spreadsheets, projections and strategies. Therapists work to help resolve anxiety, shame, fear, power dynamics and identity tied to money.

A financial adviser might say, “You should save 10 per cent of your income for retirement and rebalance your portfolio.” This is very good advice, like a prescription. 

A financial therapist asks, “What happens emotionally and to your body when you try to save for retirement?” This is a very good question, like an investigation into what makes you tick.

Here’s the truth; if you know what you should do with your money but can’t do it, that’s financial therapy territory. 

More signs you’re overwhelmed

Money makes you anxious, even when things are fine — think persistent stress, guilt or fear around money that doesn’t match your actual situation. For example, no amount of income or savings seems to quiet the feeling that disaster is looming.

You avoid looking at your finances. Just the thought of them brings on a sense of dread, so you ignore them. Even small decisions feel overwhelming, leading to inaction or panic.

You and your partner have the same arguments about money (it’s because the conflict is emotional and rooted in values, it’s not just money). There may even be financial and/or real infidelity, which almost always reveals its ugly head in the financial details.

You self-sabotage financially and it’s “ruining” your life — over and over. You overspend, undercharge, don’t negotiate or blow progress right after making it. Spending, hoarding, gambling or extreme frugality or generosity helps regulate stress, sadness or control and these habits simply morph, but don’t go away.

Money decisions feel tied to your self-worth. Success, failure, shame or pride are deeply linked to how much you earn or save. Past trauma, job loss, debt, divorce, poverty and childhood messages about money continue to shape present decisions.

You understand the numbers, and go wild filling out budgeting apps and templates with extreme detail, then crash emotionally and physically right after this rigorous effort. The templates never work. 

The signs are staring you in the face. Now what?

Financial therapists are largely unregulated — so you’ll need to do some due diligence before hiring one. Use ChatGPT, Google and referrals to see if this kind of professional works in your area. If not, you might need to pinpoint a few that offer virtual support (I always recommend working with fellow Canadians).

Book consultations with at least three to see who will be a good fit. Ask about their training and licensing. Ensure they have a psychology and mental-health professional background. Zero-in on associations they belong to, degrees and credentials. Many have sought accreditation from the Financial Therapy Association (FTA) (U.S.-based), and hold a certification called Certified Financial Therapist (CFT). The FTA has a directory to help you find a financial therapist.

Ask about their approach to supporting their clients with money-related anxiety or behaviour issues. Will they give financial advice or quick fixes (I hope not!) or just focus on emotional patterns. Do they sell financial products? If yes, this is your cue to run for the hills.

They’ll outline the logistics like cost, session length, if they do/don’t work with couples (or just individuals) and recommended frequency based on how you describe what you believe you need help with. As with regular therapy, it can be very beneficial to give it a few sessions prior to judging it. The changes you’re seeking won’t happen overnight. Many benefits providers cover financial therapy as long as the therapist has the right accreditations; hence my earlier note about verifying they have a legitimate therapy and counselling background.

If you’ve been reading my column for a while you know I wholeheartedly believe that there are tremendous benefits to working on a comprehensive financial plan with a professional adviser. But people who are overwhelmed by their finances benefit greatly from prioritizing financial therapy first, then working with a traditional financial adviser once behaviours and emotions are stable.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.