Millennial Money: Can therapy help make you richer?

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This article was published 11/04/2023 (1253 days ago), so information in it may no longer be current.

Therapy can help improve your mental health, your stress levels and maybe even your relationship with your mom. It may also help improve your financial situation — a benefit many may not be aware of.

According to 2018 data featured in the European Economic Review, men may expect a 12.4% increase in income from consulting a psychotherapist, while women may expect to see an 8.1% increase in income.

HOW THERAPY CAN INCREASE INCOME

How exactly can therapy help increase your income? Therapy is a tool for healing your mental health, the same way visiting a doctor can heal your physical health.

If you’re struggling with your mental health, you may not be able to fully focus on or even prioritize your work. This can make it more difficult to perform well, receive raises or get promoted.

It won’t happen overnight, but if you can use therapy to address the root causes of why you struggle financially, or what’s making it difficult for you to prioritize your work, you might find yourself making more money or just making smarter financial decisions over time.

“In therapy, people can better understand the barriers that have gotten in their way of being able to manage and grow their own personal finances. And that can then increase their capacity for building wealth,” says Traci Williams, a clinical psychologist, certified financial therapist and founder of Healthy Wealthy Roots, based in Atlanta.

Issues that therapy can help with, such as tough romantic or family relationships, can derail you from your financial goals. If you’re struggling with a difficult relationship, and it’s affecting your work, therapy could help you solve two problems at once.

Williams says that relationship issues can take up a lot of time and brain capacity, and that resolving those issues frees the individual to focus on work.

“I have seen several women who have been in really difficult relationship situations be able to improve their financial situation by dealing with the relationship problems that they were having,” says Williams.

MENTAL ILLNESS AND FINANCIAL WELL-BEING

If you’re dealing with mental health issues, prioritizing your financial well-being may be at the very bottom of your to-do list — but ignoring it may cause more immediate and stressful issues.

“One of the symptoms of depression is that you can have sleep issues and you can have difficulties with your energy levels,” says Williams. “That can then slow you down, because you may not have the drive or the motivation to keep up with paying all of your bills, so you can end up falling behind on your bills, and that can impact your finances.”

If you’re dealing with anxiety, you may feel like the highs and lows of the stock market would keep you up at night and so you avoid investing altogether — a mistake that could make you lose out on growing your wealth over time.

Addressing mental health issues may give you back time and emotional bandwidth for tackling those seemingly less important issues, such as creating a budget or saving for retirement.

HOW FINANCIAL THERAPY CAN HELP

If you’re not sure working with a psychologist is what you need, but you’re still struggling with your money mentality, it might be time to consider a financial therapist. Financial therapy combines behavioral therapy and financial coaching and can help you improve your thoughts and behaviors when it comes to money management.

“Financial therapy helps clean up subconscious beliefs around money called money scripts,” says Elana Feinsmith, a certified financial planner, certified financial therapist and founder of Oak Financial Coaching in Sunnyvale, California.

“Money scripts often cause people stress and tend to sabotage their financial decisions, so that they stay in a place of lower income and higher debt situations.”

These “money scripts” can follow us through life, making it difficult to change our relationship with money. Financial therapy can act as an intervention, helping you voice the difficulties you’ve had, so you can change your behavior as you move forward.

“We tend to emulate what we were raised with, and so if someone was raised in a community where it was really important to spend money on things that make it look like you have money, they may want to have the nicest car or the nicest clothes,” says Feinsmith. “Unless you’ve gone through financial therapy, some people are probably going to just go back to the way they were raised.”

HOW TO FIND ASSISTANCE

Whether you’re looking for a psychologist or a financial therapist, finding the right fit — and paying for the service — can be tricky.

Check with your employer to see if they offer an employee assistance program, or EAP, which can connect you with short-term counseling. Some employers may offer mental health medical benefits as well.

See if a therapist offers a sliding payment scale. These scales should correlate to your income, meaning if you make less money, you can pay less for the service.

You can also check out online platforms such as BetterHelp or Ginger, where you can meet with a therapist virtually.

_________________________ This column was provided to The Associated Press by the personal finance site NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Alana Benson is a columnist at NerdWallet. Email: abenson@nerdwallet.com. Twitter: @alananeedsanap.

RELATED LINK:

NerdWallet: How to Save for Retirement https://bit.ly/nerdwallet-save-retirement

METHODOLOGY:

The individual longitudinal observations are gathered from British Household Panel Survey (BHPS) data, following individuals from 1995 to 2008. The experiment performs fixed effects estimates (FE) that control for personal characteristics, since some individuals might be more prone to suffer from mental health problems. The wave 1 panel consists of about 5,500 households and 10,300 individuals drawn from 250 areas of Great Britain.

European Economic Review. (September, 2018). “Will a Shrink Make You Richer? Gender Differences in the Effects of Psychotherapy on Labour Efficiency.” https://doi.org/10.1016/j.euroecorev.2017.10.005