Money isn’t just about numbers. It can sometimes be all about emotions. A recent survey reported that 74 percent of respondents feel their debt has a negative impact on their mental health. Another study found a 300 percent increase in mental health problems among people who are in debt.
Money is a very personal issue. We each see it differently and we each hold different values towards our finances. What those values are may depend on, for example:
Cultural background
Upbringing
Educational level
Career choices
If our financial values do not match up with our current financial situation, it becomes a struggle. Most likely, no one has taught us how to cope with this struggle. This creates “financial baggage.”
What is “Financial Baggage”?
In a way, financial baggage exposes our relationship with money. In financial-based situations, we may feel certain emotions and/or memories rising to the surface. More generally, we may recognize patterns developing around economic issues. These patterns develop into what we call financial baggage and may include variations on themes like:
Spending as a form of self-soothing
Spending impulsively and spending money as soon as you get it
Hoarding money
Fixation and regret related to past financial decisions
Continuing to make the same decisions despite your regret
Ignoring bills
Relationship fights surround different money values
As you can plainly see, financial baggage can get us stuck in ever-repeating cycles. Also, of course, it can land us deep in debt without the skills needed to turn things around. Thankfully, we have the emerging field of financial therapy — a blend of economics and mental health.
What is a Financial Therapist?
We’re not talking about a financial advisor here. A financial therapist is not giving financial advice but rather, helping us discover why we make the money-based choice we do. After all, before we can create a new budget, we must create a new mindset.
Sessions with a financial therapist provide us with a safe space. While money topics may typically lead us into despair, anxiety, or denial, financial therapy helps us understand these reactions and emotions.