Are You Spooked by Financial Success?

The approach of Halloween, with thoughts of ghosts and goblins, is a good time to think about what really frightens you.  Get past the images of spiders and snakes and think about what really scares you in life.  Losing a loved one.  Cancer.  Dementia.  Financial success. 

Wait a minute!  Financial success?  Yes, financial success.  If you are like many people, struggling to reach the lifestyle and savings goals you’ve set for yourself, and finding yourself failing to stick to your own plans, fear of financial success could be at play.  The unconscious belief that “rich” people are not good people could be de-railing your efforts. 

Children who grow up in families where there is never enough money, whether due to lack of adequate income or poor financial management, may hear adults bad-mouthing “rich” people as being selfish, dishonest, or devious.  Without exposure to people with more financial resources to counter these claims, the children may well grow up believing the accusations to be true.  Adults who grew up with this belief and then do well financially – even through their own hard work – sometimes deliberately (if unconsciously) make decisions that will ensure that they can never be labeled “rich.”  Even if the childhood message was not that rich people are bad, finding yourself in a better financial position than your family and friends can be uncomfortable, and some people unconsciously strive to eliminate any differences with those around them.  
Whatever the reason they unconsciously avoid financial abundance, they may overspend, gamble, or give their money away.  

If you find yourself making decisions that frequently leave you short of your money goals, ask yourself if being financially successful is scary enough to avoid at all costs. 

Having More Money Won’t Solve Your Financial Problems

Today is Rosh Hashanah.  I read up about it this morning and learned that, in ancient times, the Hebrew New Year was connected to the beginning of the economic year in agricultural societies.  It is a time for introspection, a time to look back on one’s mistakes during the last year and plan changes for a better future.   What a great day to talk about recognizing your financial mistakes and figuring out how to avoid making them again!  

The current wisdom in the financial world is that having more money does not solve financial problems.  As counter-intuitive as that may seem, the real issue with money problems is usually a person’s relationship with money.  However you manage what money you have now is how you will manage whatever amount of money you have – only the scale will change.

Many people make mistakes because they haven’t had formal training in money management, but even financial education won’t solve most people’s money problems.  Your attitude about money is interwoven into your financial decisions.  You may fight about money or avoid talking about it with your spouse because you have different attitudes about how to spend and save your income.  Emotions may run high when discussing finances because how you spend or save money reflects who you are, and doing it differently just feels wrong. 

During this ritual time of looking back in order to move forward, give some thought to your relationship with money.  Do you avoid dealing with it as much as possible?  Do you use it to present yourself to the world?  Are you obsessed with accumulating it?  Do you manipulate or control others with it?  What emotions do you associate with money – satisfaction, elation, anxiety, fear?  If a financial planner directed you to manage your money in an entirely different way than you do now, would you do it?  Could you do it?

What IS Financial Therapy?

Financial Therapy is an emerging field of practice that blends the skills of mental health practitioners and the expertise of financial planners to treat people with emotional issues that are blocking their ability to reach their financial goals.  Some financial therapists have education and credentials in both fields; other therapists are teaming up with financial advisors to guide their clients down the therapeutic journey to financial success.

Financial Therapy pioneers, researchers, educators (Kansas State University), and practitioners Bradley T. Klontz, PsyD, CFP^®, Sonya L. Britt, PhD, CFP^®, and Kristy L. Archuleta, PhD, LMFT¹ have identified four Money Scripts that influence people’s financial decisions:  Money Avoidance, Money Worship, Money Status, and Money Vigilance.  They have also identified a number of Money Disorders, defined as “persistent, predictable, often rigid, patterns of self-destructive financial behaviors that cause significant stress, anxiety, emotional distress, and impairment in major areas of one’s life².”  These money disorders include compulsive buying disorder, gambling disorder, workaholism, hoarding disorder, financial denial, financial enabling, financial dependence, financial enmeshment, and financial infidelity.

¹Klontz, B., Britt, S., and Archuleta, K. Financial Therapy:  Theory, Research, and Practice

²Klontz, B. and Klontz, T., Mind over Money: Overcoming the Money Disorders that Threaten our Financial Health