As a long-time advocate of blending financial planning with counseling, I’ve had years of seeing the benefit for clients. I have come to see financial counseling as an investment: one that can pay greater dividends than investments in a home, retirement account, or college education. How can this be the case? Mostly because making good financial decisions is the foundation of financial and emotional well-being. Most financial and many emotional problems result from disordered and dysfunctional money beliefs and behaviors. Money disorders can impair people’s functioning and disrupt their well-being just as significantly as disorders like alcoholism or other addictions.
Some common disordered money behaviors include the following:
- Compulsive Spending is a consuming focus on buying. It can include buying things you can’t afford as well as “retail therapy” shopping where no money is actually spent. It can mean you underfund emergency reserves and don’t adequately set aside enough for retirement.
- Financial Enabling is an attempt to meet your emotional needs by “helping” others, which usually does more harm than good. A pattern of bailing kids out financially is a good example. Enabling can financially harm the parent by diverting resources from other needs and sabotage the child by rewarding dependency and entitlement thinking.
- Hoarding is compulsively buying and storing things that you don’t need or will never use.
- Financial Infidelity is keeping money secrets (such as spending, saving, or investment mistakes) from your partner because you would be ashamed to have them find out.
- Inappropriate Financial Boundaries is sharing of worries or financial details in ways that violate the boundaries between children and adults.
- Workaholism is a consuming focus on work or earning to a point of damaging your relationships.
- Underspending is frugality taken to extremes, such as inadequate spending on health care, nutrition, shelter, or clothing even when you can afford them.