Money Talks

By Stacy Notaras Murphy

Finances just might be the great equalizer in the counseling room. From young clients struggling to live within a budget, to high-powered, high-income couples wrestling with disparate spending habits and long-term financial questions, money matters may be one of thte most complicated topics counselors will face. Just as childhood trauma informs clients’ approaches to uncertain situations as adults, childhood experiences with money exert influence on adult clients’ day-to-day financial functionality.

Counselors aren’t generally known for investigating financial issues with their clients, but certain mental health professionals make a compelling case that counselors need to get out of their comfort zones and explore the complex role that money plays in clients’ lives.

Sally Palaian, a psychologist in Bingham Farms, Mich., has been educating counselors and other mental health professionals on this topic for more than 20 years because she believes finances are a core issue in the power struggles that many clients experience. She thinks counselors routinely undervalue the impact of financial issues, as well as the degree to which people want to discuss their financial situations — including disappointments, family histories and personal triumphs — in therapy. “Counselors also underestimate how deep a person’s feelings about money are inside the psyche and how confused many people are about selfhood and identity in our modern-day materialist culture,” Palaian says. “We have an entire advertising and marketing industry that has been primarily concerned with hooking people on the belief that we are what we earn, what we possess and what we owe.”

Brian Farr is a licensed professional counselor and American Counseling Association member with a private practice in Portland, Ore. He says many counselors do not know how to approach financial issues with their clients. Farr entered the counseling profession after a 22-year career in the business world and now specializes in “financial therapy,” an approach that uses traditional counseling skills to address the lifelong experience of clients’ personal finances. Today, Farr says 70 percent of his clients are engaging in financial therapy.

“When I was a partner in the investment management firm, I came to understand that I did not have the training to work with people on the level that was necessary to create sustainable changes in their relationship with money,” he says. “Later, when I was in graduate school [for counseling], I discovered that the vast majority of counselors have no training in the nuts and bolts of finances.”

With that in mind, Farr focused his practice on the gap between the services traditionally provided by mental health professionals and financial service professionals. He began by offering talks and trainings for other counselors and developing online tools to answer financial therapy questions. “Clients gradually found their way to my office through referrals and word of mouth,” he says. “After the financial turmoil in the fourth quarter of 2008, my practice had a wait list until the middle of 2012.” Subsequent to that hectic time, Farr took a four-month sabbatical.

Big benefits

Initially, the complex resistance that clients exhibited when working with money issues surprised Farr. “Over time, I realized that the threads of money are woven through almost all experiences in modern consumer culture. Then the wide variety of resistance made sense,” he says. “Not surprisingly, much of the resistance is rooted in childhood, adolescence and early adulthood. Those early experiences with money have a long and powerful half-life, especially when there is an absence of open conversations to offset misinformation or provide corrective experiences.”

Farr says he routinely hears several statements from clients that exemplify the different types of resistance related to talking about money issues in counseling sessions. Among the most common:

• “I don’t have the time.”
• “I don’t have the patience.”
• “I don’t like this money stuff.”
• “I don’t understand the financial statements.”
• “I’m not good with numbers.”
• “It’s too complicated.”
• “I don’t have enough money, so what’s the point?”
• “My partner is better with all those details.”
• “My partner and I disagree about money, so we just ignore our finances.”
• “My financial situation just makes me upset, so I don’t look at it.”

Farr insists the payoff to working through some of those roadblocks with clients is significant. As counselors start to consider financial questions in therapy, he says, they can apply the same skills they would use when addressing a client’s abuse history or experience of marital distress. “There are an awful lot of therapists who could do a little bit more with their clients around money,” he says, adding that when a client reports anxiety or depression, counselors ought to include finances in the discussion of possible life stressors. “If we’re not talking about financial issues, we really might be missing something,” he says.

Farr, who also co-hosts an Internet radio show called Money in Your Life, often uses what he calls a “snapshot tool” to help clients make sense of monthly income and expenses. “It’s not a budget or even a spending plan but just a clear picture of financial reality for this family,” he says. He encourages clients to use the snapshot on a regular basis to help them connect what they may be feeling — such as anxiety or depression — to their financial reality. “It’s an ongoing tool to use, and it reduces surprises by helping them bring some [financial] awareness on a regular basis.”

Financial therapy, then, might be boiled down to developing an openness to discussing money as part of the larger process a counselor uses to understand the needs of the client. For example, when working with couples, communication issues are always part of the work. Farr explains that money can be addressed within the typical couples’ therapy process by considering each partner’s triggers, the history and meaning assigned to financial health, and something as simple as the time of day the couple discusses finances.

Here, Farr focuses on what he calls “time zones” for having that discussion. “There are terrible time zones to talk about money — when someone just walked through the door, when everyone is hungry before dinner … A good zone might be a weekend morning when you can sit down quietly or head to a coffee shop for an hour.” Helping couples recognize that the context for these conversations is as crucial to a positive outcome as the content can teach them something that will be useful for years to come, Farr notes.

When Farr consults with other therapists who want to learn how to incorporate money talk into their regular client treatment plans, he advises them to include financial data questions on their intake paperwork. “You ask about household income, you ask if they own or rent, then you have subtly introduced something that telegraphs to them that, ‘Oh, we’re going to talk about money in this process,’” Farr explains. “You have to remember, we teach many clients what therapy is. Many people have never been inside an office like ours … and if our intake process includes something that hints that I will be talking to them about money, they can connect that conversation to the anxiety that brought them into treatment in the first place. It can be that simple.”

Licensed professional counselor Benlon V. Eaglin also works with couples on financial issues and finds it helpful to look at money as an existential topic within a marriage. An ACA member with offices in Dallas and Denton, Texas, Eaglin currently is working toward his doctorate in counseling education at the University of North Texas. He also holds an undergraduate degree in business administration and has studied couples therapy through the Gottman Institute, so providing financial therapy to couples is of particular interest to him.

“The money [problem] is usually a symptom of the bigger issue — the lack of connection,” Eaglin says. “The financial health of a couple may be indicative of the couple’s communication dynamics, ability to compromise, values, perception and experiences from their family of origin, and alignment of their life goals and dreams.”

One couple Eaglin worked with was struggling with the wife’s decision to take a lower-paying job outside of the legal field after she had completed law school. “The husband was left to reconcile the loss of potential income [and] paying for a degree his wife may never use and shift his financial goals,” Eaglin says. Those existential issues continued to confront the couple as they decided to start a family, and they continued to use couples treatment as a place to work through the issues.

In such instances, Eaglin works with couples on practical financial issues such as basic budgeting and debt reduction, but he also helps them to gain a deeper understanding of what their decisions mean to each partner individually. “Until they understand what that new job with the longer commute actually represents to each of them, they may be stuck in gridlock,” he says.

Financial (counseling) strategy

No formal credentialing is currently available for counselors who want to provide financial therapy to their clients (even the national Financial Therapy Association allows members to simply self-identify as providing services that promote financial well-being). However, counselors can follow a few guidelines for integrating money talk into the counseling room.

Palaian describes her work as “money matters counseling,” and it always begins with an assessment of where a client is struggling with finances or money-related issues. “For instance, some people need help budgeting and developing a spending plan and learning how to have realistic expectations about spending,” she says. “Others need help to get out of debt, stop shopping and spending. Others learn to earn more money because they truly are not earning enough to live on.”

Palaian characterizes her typical client as someone with a high level of debt or a lack of clarity regarding his or her finances. These clients may not truly understand how much their current lifestyle costs or even when their bills are due. “Often, people are unconscious and afraid to look at their own finances,” she says. “They feel shame about what they are doing, especially if they realize their financial habits have depleted the resources for the family.”

Palaian finds that couples often need basic help with financial communication and emphasizes that money has “tentacles” that can reach into many life arenas. Sometimes, she says, the issue that gets the couple into treatment is disappointment in each other. “Sometimes, it is that they each value different things in life. Sometimes, it’s about understanding each individual’s different money style or history with money,” she says.

In her book, Spent: Break the Buying Obsession and Discover Your True Worth, Palaian walks readers through a process that includes naming their personal money behaviors, starting their recovery, specifying life visions and spending plans, recognizing triggers, preventing impulsive activities and recognizing their personal signs of financial health.

Denise Kautzer is another financial management veteran who made the switch to counseling. Anticipating her retirement as the chief financial officer of a government agency, Kautzer began a master’s program in psychology and graduated in 2007. Today, she is in private practice in St. Paul, Minn. In addition to being a licensed professional counselor, she also holds a license as a certified public accountant. She notes that colleagues initially encouraged her to find a way to incorporate her financial expertise into her counseling work. In researching financial therapy, she found no standard way of addressing those topics in the counseling room, so she created her own program to help clients understand the meaning they attach to money.

“My typical clients in this area tend to be couples,” she says. “This makes sense because money issues are one of the main reasons couples argue as well as divorce. When they first enter therapy, communication between the two has generally deteriorated to the point that an initial goal is to improve communication so they can reasonably discuss their financial challenges.” Kautzer works with couples to determine the source of the conflict, which may be differing values and beliefs, disagreements about decision-making, lessons learned in the family of origin or the reality that they don’t have enough money to pay the bills.

Palaian is excited that more counselors are beginning to view financial fitness as an element of overall mental health. She offers a caveat, however. “The most important aspect of helping clients with financial issues is to be clear yourself about your own money. I can’t emphasize this enough considering the fact that [counselors] have a financial interchange with clients,” she says. “I believe counselors should be equipped to handle basic money management because we are better able to help folks with the emotional components of money. It is similar to working with eating-disordered individuals; an effective counselor has to understand basic nutrition in order to help a client be realistic about caloric intake.”

In addition, Palaian emphasizes that she does not advocate counselors adopting the role of informal financial planner or accountant for clients. When her clients need more information about investing and retirement options, Palaian recommends that they find a qualified financial planner. “My goal is to help people stop sabotaging themselves financially and help get them ready for a financial planner or an accountant,” she says.

Learning about financial planning

Having a sense of what really happens in the “financial planning” world is important if counselors are going to provide such referrals. Gregory Koenen has been a financial adviser for 11 years and currently works at Waddell & Reed in Vienna, Va. He explains that most financial planning clients have goals in six broad areas: managing day-to-day finances, savings goals, taxes, retirement planning, risk management and estate planning.

“We start the planning process by facilitating a discussion about each area,” he says. “What has the client done so far? What would they like to see happen? What obstacles have they encountered? Then we work on prioritization. Most of us don’t have enough money to do everything we would like, so we have to make some choices.” A financial planner will next request specific data from the client and use that information to develop and present the financial plan for investments.

During his extensive training, Koenen even took a course on counseling skills. “It was taught by a licensed therapist and included role-playing client meetings,” he says. “I learned a lot about active listening, nonverbal communication and how to ask better questions. I’m sure it has improved how I conduct client meetings, and I encourage all my colleagues to take a similar course.”

In working with so many couples, Koenen has seen firsthand how each partner’s past influences his or her approach to financial decisions. He offers the example of planning how to pay for college. “I’ve noticed that clients are often influenced by how they paid for their own education,” he says. “If their parents paid for everything, they want to do the same for their kids. However, if they took loans and worked, they often feel their children should do the same.”

“Like a lot of marital issues, communication about money is important,” he continues. “Counselors can help clients by starting the conversation about money issues — providing the third-party sounding board. Instead of avoiding financial issues with clients, they could refer them to an adviser. For counselors with their own money issues or knowledge gaps, meeting with an adviser themselves is a good first step. They may benefit by developing their own financial plan or just learning more about the services they are referring.”

Learning more about financial planning also could help counselors demystify the process and alleviate anxieties for their clients, Koenen says. “If the counselor really understands the process, they can communicate that it’s not so intimidating. If the counselor was to say that the initial meeting is just about discussing goals and learning about the kind of help a financial planner offers — even just saying something simple like that might lower the pressure a little bit,” he says. If a counselor can make a personal recommendation and perhaps even provide documents about the financial planning practice’s philosophy, that can further allay a client’s fears, he adds.

Looking in the mirror

Palaian believes she migrated to financial counseling work in part because she was raised in what she calls a financially dysfunctional family. After floundering for several years, she began her own psychotherapeutic process around money issues. She thinks the financial clarity she ultimately achieved has helped her attract clients who need help with financial dilemmas such as selling businesses, feeling undeserving of their wealth or not earning enough money to meet their goals.

Over time, Palaian also found herself giving money advice to friends who were therapists, and it dawned on her that the difficult topic of money wasn’t limited to the clients who entered her office. Several years ago, the receptionist for Palaian’s own counseling office asked for some help with a client. “She wanted me to help ‘break it to him’ that he owed us money. Break it to him, she said, that he owed us money,” Palaian explains, emphasizing the receptionist’s choice of words. The fact that the employee’s job dealt with money collection and she was asking for Palaian’s help in completing the task illustrates the complicated issues that sometimes arise when charging fees for psychotherapeutic services.

“We’re not Florence Nightingale, we’re not in the Red Cross, we’re in business,” says Palaian, adding that many therapists are unclear about what that really means. “We need [our clients] for money, and they need us for emotional support. If it’s really clean, it can be a perfect exchange. If it’s not clean, their dependency gets polluted, they feel like they have to pay someone to give them support, and there can be resentment from childhood about having to do that.”

Adds Farr: “I believe therapists, like most people, are fully capable of expanding their awareness of their relationship with money. However, awareness requires paying attention. Paying attention then leads to simple changes in behavior. Many therapists have unconsciously trained themselves to notpay attention to money, to not look under the surface of their relationship with money, to notdevelop and sustain adequate financial tracking skills.”

Palaian points to countertransference as the primary block counselors face when dealing with money issues. “The therapist may have deep, confused feelings about charging money for therapeutic services,” she says. “It is imperative to examine your own beliefs about money if you want to enter into this terrain with clients. In fact, the more comfortable you are about your own finances, the more comfortable and ‘safe’ you will be for clients to open up and disclose their true problems, behaviors, values and beliefs with money.”

This story was originally published in the Nov. 1, 2013 issue of Counseling Today magazine.