Even though mental health practitioners often cover a wide variety of difficult subjects in their work, money can be an especially challenging topic to broach. So much so, that sessions can begin and end without even addressing fees or payment schedules with clients. Financial wellness is tied to mental health, and we need to learn to talk about it, according to clinical psychologist Mary Gresham, PhD, who recently addressed a group of psychologists gathered in Atlanta, Ga., for APA’s second local networking event, monitorLIVE. monitorLIVE events connect psychology professionals and thought leaders so they can learn about and discuss issues that impact and elevate the discipline.
Dr. Gresham noted that mental health practitioners have models of good marriages and good communication to teach to clients, but they may lack good models of financial wellness. Most leave money matters to finance professionals, even though mental health practitioners should be the ones applying therapy to the field, she said. While financial planners may take a class in coaching, they haven’t studied behavior, relationships, or any of the other deeper issues related to financial wellness. This, Dr. Gresham believes, is where psychologists can step in and effectively address those issues.
One way to begin addressing financial wellness with clients is through the use of schema—a cognitive framework that can help in the understanding of the concept. Doing so will allow you to interpret implicit and explicit beliefs about money and how they can impact individuals’ lives.
Dr. Gresham explained that money beliefs begin early, at about age three or four. She provided an example—a child thinking money grows in one’s pocket. Practitioners can address these misnomers in the context of behavioral finance, developed by the work of Daniel Kahneman and the late Amos Tversky, which examines how individuals make errors in their thought process around money, like believing money grows on trees or, in Dr. Gresham’s example, in a pocket. Behavioral finance explores how rational or irrational one can be about money matters, such as choosing to take one dollar today to immediately satisfy your desire for money, or taking $1.10 next year, which is actually a 10 percent increase, but might not feel like it.
Dr. Gresham went on to say that schema development depends on cultural beliefs, like thinking rich people are bad and poor people are good (or vice versa), or believing that if you work hard, money will come to you. These beliefs affect us, but they are simplistic, and we need to develop them to make them more sophisticated. This necessary development can happen through research on the cultural differences having to do with money, like the particular rules and customs about money that exist within the families of first-generation immigrants,such as not paying interest on a loan, and how those rules differ from cultural norms here in the United States, where borrowers might not like it, but interest is acceptable.
Another area in behavioral finance Dr. Gresham discussed with the audience is financial trauma. Even though many people suffer from financial trauma, whether they’ve lost everything in bad investments, or because of a spouse’s spending habits, there is not enough research on how to assist people with those experiences. “How do you help people come back from financial trauma and rebuild their lives? We need that research,” she said.
During her conversation, Dr. Gresham also touched on gender issues around money, such as women having lower financial levels of literacy than men and the lack of encouragement of women to enter the financial planning field.
She also noted that practitioners must examine money issues in their own lives, pointing out the costs associated with getting an education in the field and the need to understand what it means to be a self-employed business person by learning to communicate fees and by researching market rates, insurance rates, and retirement plans. Dr. Gresham suggested APA’s Division 42 and the book, “Handbook of Private Practice: Keys to Success for Mental Health Practitioners.”
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