NerdWallet: You have fear and anxiety over money…do you need a financial adviser—or a financial therapist?

This article is reprinted by permission from NerdWallet. This article provides information for educational purposes. NerdWallet does not offer advisory or brokerage services, nor does it recommend specific investments, including stocks, securities or cryptocurrencies.

Investing your money can be an emotional affair. On one hand, you might be excited about creating financial stability and building wealth. On the other hand, you might feel some anxiety and fear. The latter can have long-term effects, according to a 2021 study by the Financial Industry Regulatory Authority. The study, Financial Anxiety and Stress Among U.S. Households, says people who experience long-term financial anxiety and stress are less likely to plan for retirement.

For those who have fears around investing, the new year might be a good time to explore what’s driving those fears. Financial therapy can help with this.

What is financial therapy?

Financial therapy combines behavioral therapy and financial coaching to help improve your thoughts, feelings, and behaviors around money.

Celia Hughes, a certified financial therapist based in Los Angeles, says financial therapy marries the two disciplines.

“There’s this real gap between emotional health and financial health and money,” she says.

If you’ve never heard of financial therapy before, that could be because it’s a relatively new discipline. The Financial Therapy Association was established in 2010, so it’s just shy of a decade old.

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What is a financial therapist?

A certified financial therapist is an individual who has completed all three levels of certification with the Financial Therapy Association. It’s a certification that both financial and mental health professionals can pursue.

Financial therapists can help investors understand their worries and fears around money, guiding them to that lightbulb moment.

The difference between a financial therapist and a financial adviser is that a financial therapist explores the feelings and beliefs behind your financial habits, while financial advisors focus on helping you reach your financial goals.

For example, if you have $50,000 saved in cash and fear of going broke is keeping you from investing some of that money in the stock market, you might speak to a financial therapist. However, if you have $50,000 and want to know the best strategies for investing the money, a financial adviser would probably be a better fit.

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It’s important to note that not everyone who calls themselves a financial therapist is a certified financial therapist. Some behavioral therapists focus on finance and don’t have financial qualifications. Likewise, Hughes says, some financial professionals aren’t credentialed therapists, but they help you explore the emotions behind money.

What financial therapists can help you with

Financial therapists can help with any negative feelings and limiting beliefs you have around your finances. For example, you might be terrified of starting your investing journey. Or, despite being a high earner, you might not invest much because you don’t believe you’ll be fortunate enough to see positive returns.

If you’re curious about what working with a financial therapist could look like, Hughes explains her approach with clients struggling to kick-start their investing journey.

“We would do some digging and see if we could get to the root cause of that fear. Is it a lack of belief in your own worth and belief that you’re worthy of having a financially stable future? Is it fear of the unknown? Or you don’t understand investment and how it works so you’re afraid to give your money to something you don’t understand? So, we would try to get into some of that root work and then work on setting small goals,” she says.

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How to choose a financial therapist

Hiring a financial therapist can be a big decision, so you want to choose the right one. You should look for some of the same things you would when seeking a behavioral therapist. That means finding someone who specializes in your problem area and who you feel comfortable being vulnerable with.

If you think a financial therapist is what you need and you’re ready to get started, you can search the Financial Therapy Association to find one.

Strategies for overcoming your money fears

Limiting beliefs can stall your investing journey and keep you from reaching your financial goals, the therapists we talked to said. In some cases, fears can keep you from enjoying the fruits of your labor, too. How do you move forward despite fears? Here are a few tips the therapists shared with us.

1. Identify your limiting beliefs and emotions

Some people, including those who grew up in marginalized communities, have money stories they tell themselves that are developed in childhood. These stories can either push you toward your goals or hold you back, the financial therapists say.

Perhaps you grew up watching your parents struggle to make ends meet and now you think money is scarce and shouldn’t be spent. Maybe you’re afraid to invest because nobody in your family owned assets. Or maybe you invest but are afraid of losing money, so you always play it safe. According to the Wells Fargo/Gallup Investor and Retirement Optimism Index, Black investors are less likely than white investors to feel comfortable taking on a lot of risk. They’re also more likely to give frequent financial help to relatives.

Evans encourages people to ask themselves hard questions about their money beliefs.

“Feel your emotions, identify them, and then make a plan with your money, and then you can move forward,” she says.

2. Envision retirement

Retirement planning might seem like a low priority for some investors, especially if retirement is decades away. Recurring expenses may take priority, or maybe you want to use your money to live in the moment.

Hughes says sometimes people struggle to begin investing because they struggle to focus on the future.

“Some reasons are a lack of education and understanding how compound interest works and why it’s so important to start investing at a young age,” she says.

To shift your thoughts and beliefs about investing for retirement, Hughes recommends thinking about a person you know who is at retirement age and how they’re currently living. This can help create a connection to the future so you can envision what you want for yourself and then put a plan together.

3. Start small

It might be good to take baby steps when trying to change your financial habits. This could look like doing research about whatever is creating uncomfortable feelings.

“Take the time to say, ‘Hey, where can I get some information to understand what a Roth IRA is? Or a 401(k)?’ Then decide what your goals are so you can move forward in a way that feels good,” says Evans.

4. Consider passive investing

Passive investing is a way to take pressure off yourself, especially if you’re struggling to understand the sometimes complex finance world. It’s a hands-off form of investing for those who don’t want to learn the more complicated stuff or who don’t want to take on investments with greater risk. Examples of passive investing include using robo-advisers or investment vehicles such as ETFs, index funds or mutual funds.

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“You don’t need to be a finance expert, just let compound interest do its work,” Hughes says. “Even if you put a small amount of money into a mutual fund, when you start to see it grow, that feeling can be really energizing, and that can enable someone to move forward with a financial plan.”

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Elizabeth Ayoola writes for NerdWallet. Email:

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