Financial issues are a huge source of stress for the American public. A recent survey by Capital One Finance found that 73% of Americans listed finances as a major stressor in their life. Considering the toll this kind of stress can take, financial counseling is one of the newest and fastest-growing niches of mental health care. Essentially, a financial therapist is a financial counselor and a mental health therapist all rolled into one. These professionals cover the aspects of money management that are controlled by emotion, including financial stress, the ability to meet financial goals, and emotional reasons behind financial decisions. It can take a few extra steps to become a certified financial therapist, but the outcome can be extremely beneficial in terms of being able to find clients looking for this type of specific help.
As mentioned above, financial therapists counsel their clients on the mental health and emotional aspects of their finances in multiple ways, from identifying negative triggering behavior, to helping clients set and achieve financial goals.
Most people have a complex relationship with money for a number of reasons. Upbringing, culture, professional life, and family expectations all play a part in how we view and spend money. A financial therapist will get to the bottom of stressors clients have with money. They will assist clients in identifying and then finding solutions for negative behaviors associated with finance. This could be overspending, impulse buying, reluctance to save, or avoidance of financial institutions.
Additionally, financial therapists will help clients learn financial literacy skills, teach clients some best practices for handling their finances, and keep track of client’s progress towards their financial goals.
Couple’s financial therapy is potentially a significant portion of a CFT’s caseload. Money continues to rank as one of the top things causing friction in relationships, and oftentimes finances are listed as one, if not the main, reason for divorce. To combat this, financial therapists will work with couples to identify both individual and joint goals, as well as individual triggers for negative financial behavior that can lead to conflict in the relationship.
Becoming a financial therapist starts with a bachelor's degree, whether in finance or in mental health. There are six courses of study that are recommended for someone looking for a career in financial therapy: psychology, human development, finance, financial planning, consumer economics, or social work. The benefits of each of these differ slightly. For instance, a degree in psychology will give you more insight into human behavior, vs an economics degree that covers economic theories and financial literacy more in-depth.
Graduate-level education is the next item on the agenda on the path to becoming a CFT. In order to be a professional therapist or psychotherapist, a master’s degree and licensure must be obtained in social work, counseling, or marriage and family therapy. Some choose to continue on after the master’s to a doctoral program in psychology. Either way, verify that your program checks all the education requirements for your state, and complete any necessary additional coursework.
Once the degrees have been obtained, it’s time to go to work. Every state’s requirements are different. For today’s example, we will look at the requirements for California. Upon graduating, students must register as and complete their first year’s worth of internship hours, at which point they’ll be eligible to take the California Law and Ethics Exam. After completing 3,000 hours of supervised internship hours, the National Clinical Mental Health Counselor Exam should be taken. Once this is passed, licenses will need to be applied for and fees paid. At this point, additional certifications - such as CFT programs - can be completed for additional expertise and credentials.
Specialty training and certifications in financial therapy can be obtained from many sources. Like all other certifications, fieldwork in the specific niche is completed, and at the completion of the necessary hours, one must sit for the certification exam. The requirements to be able to sit for the exam, as well as the information included, is different depending on the chosen program. Some of those certification programs include:
University of Maryland School of Social Work Financial Social Work Initiative: This program has a significant lean towards social justice work, including teaching financial literacy, rebuilding financial security, working with communities to address financial oppression, and policy advocacy for large-scale financial system changes. Besides a certification program, the University of Maryland also offers continuing education credits in financial social work.
Kansas State University Financial Therapy Graduate Certificate: This program is 100% online, and therefore available to any therapists. The program focuses on 1:1 client therapy through cognitive training when it comes to finances.
Creighton University Financial Psychology and Behavioral Finance Graduate Certificate: The Creighton University program, which is part of the Heider College of Business, is unique because of its business school learnings, rather than through a social work or psychology department.
Center for Financial Social Work Certification: This program allows current social workers and therapists the ability to gain specialized instruction in financial aspects of therapy, which includes 20 units of continuing education credits that will provide a certificate in financial social work. This is another program that is completely online.
Once degrees are complete, licensure has been obtained, and credential exams have been passed, the only thing left is a requirement for continuing education credits. The requirements for the type and number of these CTE’s are dependent on the type of license held.
A CFT designation is Certified Financial Therapist. A level 1 financial therapist, or CFT-1, means the individual has completed coursework and has the knowledge and competence to provide clients with financially specific therapeutic care. CFT-II and CFT-III levels deepen this knowledge, advancing the skills and knowledge base of the therapist in both therapeutic techniques as well as more specific financial skills.
In everyday language, we often use the terms counselor and advisor interchangeably. This is not the case with financial counselors or therapists and financial advisors. It really comes down to the mental health aspect. A financial advisor helps you to invest and manage the money you have or continue to make. They only deal with the financial aspect of their client's needs.
A financial counselor, on the other hand, will look more deeply at the behaviors and emotions that surround that money. They help to create plans and goals so that client’s build financial stability. Financial advisors require three years of experience in an industry related to finance. On the other hand, financial therapists and counselors have degree and certification programs as well as competency exams in their area of expertise. This doesn’t make one better than the other; they simply have different end goals and generally a different clientele. Because financial planners generally work with people who already have money and are trying to manage it in smarter or more productive ways, advisors tend to work with higher-income clients. For financial therapists and counselors, they tend to deal more with the negative aspects of relationships with money, and assist people with getting out of debt, bankruptcy, or building up assets from little to nothing. They generally work with lower to middle-income clients.
Deciding it’s time to start seeing any type of therapist is a very personal, potentially sensitive decision. This is especially true when it comes to finances. If thinking about personal finances makes one anxious or depressed - or adds to existing issues, that’s definitely a sign that it might be time. If a person is consistently sending more money than they take in, or just find oneself always without funds even though income should be sufficient, that’s another indicator that it may be time to speak with a financial therapist. Another reason to see a CFT would be the inability to save money, despite wanting to, or trying to change financial behaviors but being unsuccessful.
Essentially, any negative behavior or emotion in regard to money can be addressed with the help of a financial therapist. They can help get to the root causes and triggers of the problems, and help create a plan for dealing with both the mental health aspects as well as set the client up for a more stable financial future.
Becoming a certified financial therapist is a growing niche in the mental health profession. Many business and psychology schools are beginning to offer coursework and credentialing programs in financial therapy. As a CFT, therapists have a very specific skill set that can be extremely valuable to their clients. They not only give financial advice and assist with financial planning but also dig into the cognitive behavior behind financial behavior and choices. CFT’s can assist their clients in creating a plan to overcome negative emotions and triggers when it comes to finances, becoming more financially literate as well as economically stable.
When it comes to finding the appropriate resources to assist your therapy practice, look no further than Advekit. We cover a wide variety of topics to help you, whether it be how to effectively run an online therapy session, what tax deductions for therapists are available, how to deal with self-doubt as a therapist, the many advantages of electronic scheduling for your practice, and much more.
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