Electrical contractors make rational financial decisions every day. They use historical data to develop the next budget and cost accounting to measure whether projects are hitting desired profit goals. Managers use so-called “left-brain” thinking to make rational decisions about money, and emotions have no place in bidding, purchasing or billing.


Or so we thought. In the last few years, “financial therapy” has become a growth industry. People may be rational about money but quite irrational in their other behavior, and they may not realize their behavior affects their financial decisions. A financial therapist, unlike other psychotherapists, specifically focuses on financial well-being, helping clients to deal with emotional, behavioral, relational, cognitive, economic and integrative aspects of handling money. The financial therapist collaborates with other financial professionals, such as tax or investment advisers, and may even attend joint meetings to ensure the effects of emotional issues or beliefs are understood before strategic decisions are finalized.


How can you tell if you need financial therapy? You might think of yourself as financially conservative and rational about spending, but if you record your transactions, patterns may contradict your assumptions. Perhaps your personal relationships fail because of money conflicts. You think you have a money management program, but your financial decisions are actually crisis-driven. Or, you have an extremely high level of anxiety about financial issues. A financial therapist can help you change these patterns and behaviors.


Other financial therapy candidates include talented people who cannot seem to support themselves and “yo-yo” debtors who, on a continual cycle, pay down their accumulated debt and incur new debt almost immediately.


Common issues financial therapists encounter include cash flow and debt problems, chronic overspending or underearning, and making financial choices based on emotion or anxiety. Allowing money to become a source of relationship conflict is also a frequent issue. Whatever drives an individual emotionally will be expressed in that person’s attitudes about money and how he or she uses it. So, therapists focus first on changing behaviors—how clients use money—instead of how they feel about their financial dealings.


No one is perpetually free of financial stress, but there is a connection between difficulty with money and difficulty with self-regulation in other areas, such as addictions to gambling or alcohol. While abstinence is a common strategy for changing addictive behaviors, it is unrealistic to avoid all contact with money, so the financial therapist helps clients achieve balance in financial dealings and create long-term behavioral strategies.


The process often begins with a financial “biography”—an exploration of how you handle money, and your beliefs about wealth and whether you deserve it. 


Do you save every penny because you use money as a security measure? It doesn’t prevent cancer or a tornado, so your perspective may need refinement. Once you recognize the origin of an attitude or belief, you can choose to change the behaviors that follow.


Unrecognized, limiting beliefs can affect satisfaction, self-worth and stress levels associated with money, but no two people handle circumstances in the same way. Given the same level of net worth, one person feels happy and secure while another feels poor and anxious. Your attitudes drive your behaviors at home and in your business, affecting your relationships with employees and customers, your profitability, and your company’s ultimate survival. If you run your business jointly with family members or partners who hold conflicting beliefs, the quality of overall financial decisions will almost certainly be compromised.


Choosing a financial therapist can be tricky. Money issues are not formally accepted as a mental health disorder, so don’t expect a universally accepted diagnosis or treatment protocol. There is ongoing debate about what qualifications define a financial therapist, so there is no specific credentialing process or code of ethics for this specialization.


With such uncertainty, why not focus on financial literacy first? Having accurate information and understanding financial statements, debt financing and other kinds of analysis can help you make better financial decisions. However, financial literacy cannot provide the support you need to deal with uncertainty, anxiety and conflicts that affect relationships. The ability to evaluate your net worth doesn’t guarantee you feel worthy of a higher profit level if you believe wealth is inherently evil.


Ultimately, financial literacy will not overcome the emotional way you view money and profit and your beliefs about whether you deserve to be financially successful. Financial therapy may offer another tool to help you build a financially healthy company and a sound attitude about financial success.