Did you ever hear of the term “financial therapy”? It’s an increasingly common term used by mental health professionals.
It’s no wonder why.
In a word, financial therapy is professional mental health counseling that targets the core issues of financially-related anxiety and provides emotional support to aid people in coping with money problems.
Online searches for the term “financial therapy” are up by 60% on a year-to-year basis, while internet searches for the term “financial wellness” have risen by 52% over the past three months, according to the financial wellness app Stackin.
Stackin reported that its subscription rate rose by 233% in the last month as Americans come to terms with increased financial stress in an economically anxious 2022.
A Mounting Problem
With the holidays on hand and the pressure to spend, as well as cope with rising debt, being all too real to Americans, financial stress can inflict real damage – especially if you don’t have concrete steps to address the issue.
“Most people are feeling the pinch from rising inflation and interest rates – which can seem amplified during the holiday season, when household spending trends higher than other months,” said Sexton Advisory Group chief executive officer Steve Sexton.
Take holiday entertaining, for example.
Right now, the cost of food from grocery stores has increased by nearly 10% in the past year, which can put a significant financial burden on households who are hosting their friends and families for the holidays, Sexton told TheStreet.
“Hosting costs, along with travel, holiday gifting, charitable donations, and other holiday-related expenses can really eat into your monthly budget,” he noted. “This is understandably frustrating for people barely staying afloat given other economic challenges, including rising cost-of-living prices, high-interest debt, and the recent market downturn."
Tips for Coping With Financial Stress
To alleviate and even eliminate financial stress, the key is getting ahead of the problem – at least as much as possible given the often high emotions involved. Take these action steps to bring some calm into your life this Christmas season.
Apply some common-sense preparation. When it comes to financial wellness, fortune favors the prepared.
“While some financial anxiety is natural this time of year, you likely have more control over your holiday financial stress than you realize,” Sexton said. “If you’re feeling anxious about your finances this holiday season, making a plan can help to alleviate some of the financial pressure.”
That can be as simple as outlining a budget for holiday gifts, understanding your budgetary limitations before RSVPing to holiday parties, or researching the best deals for holiday travel.
“Be honest with yourself and others about your limitations so you’re not overextending yourself financially, mentally, and physically,” Sexton advised. “Remember, the holidays are about spending quality time with loved ones, not a competition of who can spend the most money.”
Make your finances a big priority in your life. People anxious over money tend to have one of two responses to holiday financial stress. They either become obsessed with their finances or completely avoidant.
“Honestly, the first option is the preferred route to take,” said Heartship Psychological Services founder Dr. Lauren Cook. “It's better to take a realistic look at your finances and set a budget on what you can realistically spend. The sooner you know what you're working with, the faster you can set boundaries and expectations about what's feasible this year.”
Many people become avoidant of financial issues when worried, but continue to spend in excess and then “hope” they’ll be okay.
“This makes sense given that when we're anxious, we often want to avoid what's making us stressed (in this case, that's our bank accounts),” Cook said. “Instead, look at your account, set a budget, and this will help you approach the holidays from a realistic lens.”
Let family and friends know your money mindset during the holidays. If it means you won't be doing gifts or can't host a meal, say so from the start. “This will help ensure there are no disappointments or unmet expectations,” Cook said.
Lean into quality time with loved ones. It’s easy to get pulled into materialism during the holidays, but avoid doing so.
“Instead, have a family movie night or play a board game,” Cook advised. “Soak up time with the people you love rather than spending money at the mall on gifts that you don't think people will want anyway.”
“This might be an uncomfortable shift at first but you'll likely see how great it feels to spend your time in more meaningful ways,” Cook added.
It’s important to communicate your boundaries. As Cook noted, opening a candid conversation with family about finances prior to the holidays can set expectations and avoid disappointment.
But take a minute to put yourself in someone else’s shoes during the holiday season. After all, they could be suffering, too.
“That’s why it’s a good idea to respect others’ financial boundaries during the holiday season and remember everyone has different financial goals and pressures,” Sexton said.
