facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause
Military Finances 201: What is Financial Therapy and How Does it Differ from Financial Advisement? Thumbnail

Military Finances 201: What is Financial Therapy and How Does it Differ from Financial Advisement?

Managing Your Finances

You have the best of intentions, you want to contribute to your savings account each month or make a larger payment towards your credit card debt. However, you continue to find that you don’t have enough to fulfill the financial goals you have set for yourself. 

It could be more than just your lifestyle that’s preventing you from achieving financial well-being. How you approach your finances and spending, in general, can have a big impact on how you’re able to achieve your personal monetary goals. If you find yourself with spending habits that keep you from living the life you’re wanting, financial therapy could offer solutions that might work for you. And don't worry seeing a Financial Therapist shouldn't affect your security clearance.

Financial Therapy vs. Financial Advisement  

Financial therapy is a process informed by the therapeutic and financial competencies that helps people think, feel and behave differently with money to improve overall well-being through evidence-based practices and interventions.1 This differs from financial advising in that it looks into the causes of your behavior and works to modify behavior whereas financial advisors give recommend actions and behavior changes.

Financial therapy explores your behavior concerning finances so you can succeed in the long run. This can include identifying your stressors when it comes to money, how you may be using money as a reward and other behaviors that can put an extra strain on your personal finances. 

Is Financial Therapy Right for You? 

Generally thought to be a taboo subject, you may not have the opportunity to discuss money with family and friends very often. You may not know what healthy habits are concerning money or how your family or friends have approached finances in the past. And at times it can be difficult to determine what is appropriate in relation to saving and spending money. Financial therapy can be the answer for those who are looking to discuss their relationship with money. 

Additionally, financial therapy can be helpful to those who have what could be considered extreme behavior when it comes to spending money. In the last few years, close to 96 percent of Americans have reported impulse shopping either in-store or online.2 If you find yourself as one of the many people who tend to over-shop to the point that you’re not able to achieve your monetary goals, financial therapists can work with you to determine where this impulse is coming from and how to address it. 

On the opposite end, financial therapy can also be helpful for those who tend to hoard money to the point where they are foregoing addressing their basic needs. People who save and dismiss spending money on necessities like healthcare, fresh food, and other similar items can be operating from a fearful motivation of scarcity. Financial therapy can help individuals and couples to address where this fear comes from and how to spend in a healthy way. 

Saving money and achieving financial well-being may be more possible for those that take a behavioral finance approach. If you find that you’re not able to meet your financial goals even after having a "financial plan", financial therapy may provide you with the help you need. When seeking out a financial therapist check to be sure that they are licensed specialists and can address the various financial barriers you may be facing. 

1 https://www.financialtherapyassociation.org/

2 https://www.finder.com/shopping-statistics

If you found this article useful, you might like the following blog posts:

Military Finances 201: Take Social Security Early and Invest It?


Military Finances 201: How Do Retirement Accounts Affect Each Other?


Military Finances 101: Are Identity Theft Protection Services Worth It?


This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.




Disclaimer
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by C.L. Sheldon & Company, LLC ), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. C.L. Sheldon & Company, LLC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to C.L. Sheldon & Company, LLC website or incorporated herein, and C.L. Sheldon & Company, LLC takes no responsibility therefore. All such information is provided solely for convenience, educational, and informational purposes only and all users thereof should be guided accordingly. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from C.L. Sheldon & Company, LLC . To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. C.L. Sheldon & Company, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the C.L. Sheldon & Company, LLC ’s current written disclosure statement discussing our advisory services and fees is available for review upon request. DISCLAIMER OF TAX ADVICE: Any discussion contained herein cannot be considered to be tax advice. Actual tax advice would require a detailed and careful analysis of the facts and applicable law, which we expect would be time consuming and costly. We have not made and have not been asked to make that type of analysis in connection with any advice given in this blog post. As a result, we are required to advise you that any Federal tax advice rendered in this blog is not intended or written to be used and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS. In the event you would like us to perform the type of analysis that is necessary for us to provide an opinion, that does not require the above disclaimer, as always, please feel free to contact us.