Financial therapy might cure your money stress — if you know what you're paying for

Unverzagt became certified as a financial therapist a few years ago, joining a growing field of professionals who seek to improve how people think and feel about money, especially when those emotions affect their life and relationships.

But in 2020, she realized she was keeping busy with her work to avoid her own money issues — not just undercharging clients but also the stress that comes with writing big checks. She ultimately decided she needed to see a financial therapist herself.

“To be honest, when we started, my original comment to him was, ‘I don't have any money problems, it's just not a worry, you know, it's just not an issue,'" says Unverzagt. “And he's like, is that really true? Because that's really not true for anybody.”

In fact, money is Americans' second-biggest source of stress — right below "work" and above "the economy" — according to a report by the American Psychological Association.

However, it’s important to know this emerging field is not regulated by law — which means anyone can call themselves a financial therapist. Before putting your finances or your mental health in anyone’s hands, you’ll want to do your research so you know what you’re paying for.

What is a financial therapist?

While the idea of mixing financial planning and psychology is not new, it wasn’t until 2010 that a formal association emerged to set standards and promote the field in the U.S.

Financial therapy has continued to grow as the stresses of the pandemic normalize conversations about both money problems and mental health. The widespread adoption of virtual meetings is also making it easier to seek help.

Today, the Financial Therapy Association helps people connect with a wide range of professionals who seek to “promote a vision of financial therapy.” One might be a chartered financial analyst who has studied psychology, while another might be a licensed social worker with a master’s in financial planning.

Many bear the title of certified financial therapist, or CFT-I, granted by the association itself. Applicants typically need a bachelor’s degree or higher in a relevant field — either finance or mental health. Alternatively, they can be a certified financial planner (CFP) or accredited financial counselor (AFC) with a bachelor’s degree in any field. They also need to complete 500 hours of related service and pass a two-hour exam.

Anyone looking for a financial therapist should pay close attention to the specific training a practitioner has received, says Julia Kramer, treasurer of the FTA and founder of financial coaching service Iaso Consulting.

Kramer, for example, has CFT-I, FBS (financial behavioral specialist) and CPA (chartered professional accountant) certifications and a graduate certificate in financial psychology and behavioral finance. But she’s not a licensed therapist.

“So people who have much deeper issues than what I'm comfortable with, I refer out,” says Kramer.

At the same time, Kramer would refer a client to a financial planner when the client is in a good headspace to tackle the tangible aspects of their finances, like saving money or handling insurance.

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How to find a financial therapist

Proponents say all kinds of people can benefit from addressing their complicated emotions about their finances. You don’t have to be grappling with extreme debt and overspending; even underspending can be a harmful preoccupation.

“My grandparents were Depression-era,” Kramer says. “So I will have a heart attack if we do not use every drop of the Dawn liquid — like, we have to turn it over, we have to put water in it, because the world will end and we'll go bankrupt if we waste money.”

She says she’s seen clients of various ages, genders and income brackets, though women and middle-aged people seem more likely to reach out.

“A person should seek out someone like me when money — it doesn't matter, the dollar amount — when it is keeping them from sleeping, when they have continual conflicts with their family, when they can't bring themselves to open their bills or they neurotically check their bank accounts,” Kramer says.

While financial therapy is rarely covered by insurance, Kramer says some therapists may be willing to help people in need for free or at reduced rates. You can find professionals who charge a flat rate, charge by the hour, or charge by commission or assets under management.