Money is not only about earning, spending and saving! It requires an understanding. It demands your attention. It reflects your personality. It speaks what you are, and how you think!
You can pretty well say that psychology is related to money behaviors in almost every way!
Hence, in the present time, a new branch of study needs special recognition! It is financial psychology. This is when financial planning becomes a therapy!
So, let’s sit down and dedicate some time towards behavioral money management. Or in easier words, financial therapy!
When should you choose financial therapy over financial consultancy?
To point it out directly, ‘Money’ or ‘Wealth’ makes up the most of your lifestyle.
When you let your emotions drive money instead of letting your brain do the job, it’s then you make the worst financial mistake of your life!
As Jonathan Swift said: “A wise man should have money in his head but not in his heart”, you must follow it!
There are many instances where the fine line between finance and psychology is left unexplained.
- Say for example, when you are in love, and you go out on a date, you are ready to spend whatever amount it takes to bring a smile to your partner’s lips.
- Again, in a case of an emergency, when someone very close to you is in a life-death situation, you are desperate enough to spend whatever it takes not to lose that person!
- Also, someone with a chronic mental illness like bipolar disorder shows symptoms of overspending and picking up risky investment plans in their times of Manic-depression! Like they think their lives might change if they invest all of their money in a “too good to be real” business plan!
So, what should you say to your financial therapist?
Before you go for a session with your financial therapist, prepare a questionnaire that briefly describes your financial problems.
It should look somewhat like this:
1 Why have you chosen financial therapy?
You must have your signs and symptoms written precisely in your questionnaire. Like why do you think you can’t control money the way you want to.
Say for example you spend without thinking much and shop just out for your eyes’ pleasure, and never think, why you need this item or of what use will it be to you!
2 What are the worst financial mistakes you have done till date?
Let’s say, you didn’t buy a life insurance policy for yourself by brainstorming too much, as you spend your days in anxiety and depression, believing, you are meant to die one day or the other, and this life means nothing to you!
Again, you could have bought a second home for gaining respect and reputation among your family and friends, and are now financially broke!
Also, you can’t follow a budget, because you believe too much in love, and do expensive shopping every now and then to get back your partner’s trust and love.
3 How do all the ill thoughts you have about money demotivate you?
It might be true that you have a pessimistic approach towards money, but let me assure you there’s no harm in that. Remember only a true Atheist can transform into a true Theist!
Why you can’t be jolly when it comes to monetary discussions with your friends or family.
Why you think you are poor and you can never earn a good salary in your life even if you work hard.
Why you don’t trust your company and the reason why you haven’t started investing in an employer-sponsored investment plan yet.
Or, why you can never be rich in this life!
This branch of study, Financial Psychology has come into existence because throughout the ages of human history, people have shown situations where they do financial mistakes out of love, anger, anxiety, fear, ego, mental disorders or unexplained behaviors.
Today when a financial consultant sits with a client to discuss ‘budget’, or ‘financial planning’ for the future, they see that the clients are more of patients, who need both teachings about money and psychotherapy.
So, all I can say is, without wasting much time, you need to understand your problems and seek therapeutic help for a better life with proper money management!
Hurry on, the financial therapists are getting busy, you are not the only one with financial problems!