Financial Therapy for Money Disorder

After amassing a great deal of fortune from her career, country music sensation Wynonna Judd said in The New York Times interview she threw much of it away, spending ridiculous amount of money at her children out of guilt for not having much quality time with them. She also bought more cars than she needed. Having grown up in an underprivileged family in Appalachia, she said she found herself with "everything and nothing at all."

Money disorders

With the battered American economy, compounded by the inability to manage spending effectively, more and more people are suffering from the so-called "money disorders." Money disorders are those heaps of self-destructive and unhealthy behaviors. While they’re not as extreme as compulsive shopping, kleptomania, or pathological gambling, they nevertheless affect significant numbers of people.

People with money disorders have the following problems: overspending, underspending, serial borrowing, workaholism, financial infidelity (spending without the knowledge of a spouse or a partner), financial enabling (giving huge amount of money to people who are not motivated to fend themselves), financial incest (giving money to relatives to have some control over them), and hoarding.

Workshops, programs, and money rehabs

Judd and many people like her who have money problems can be "treated" by workshops, programs, and money rehabs. In a money rehab, Judd dug really deep into the root cause of her money disorder.

Onsite in Nashville is one of the workshops and programs devoted to treating money disorders. It involves financial counseling and group therapy. Judd attended this program in 2004 and said it helped her transform her self-destructive financial behaviors. She said in an interview, "If I can do it, anyone can. I’m in absolute financial recovery. I live by cash only, by cash budget."

The role of therapists

The American Psychological Association’s (APA) professional code of ethics holds that therapists must not have outside relationships with clients; this includes business arrangements such as financial planning. However, the financial therapy field is still young. Many therapists say that the ethics are still murky when it comes to therapists who are also financial planners.

The role of financial planners

Many financial planners team up with therapists in helping clients who have money problems. This combination can be highly effective. As financial planner Rick Kahler out it, "I’ve never seen clients make progress faster than when they are working with me and a psychologist, preferably in the same meeting."

However, many financial planners don’t see the need to have therapists on their team because therapists have the tendency to give the clients life advice. According to Morris Armstrong, a financial planner based in Danbury, Connecticut, "I don’t necessarily think that everybody needs to have the Dr. Phil of financial planning."