To solve money problems or improve your financial picture, you have to get your head on straight first. That's where financial counseling comes in. Reeta Wolfsohn, a money expert who has built a certification program for financial counselors that can help clients with money woes ranging from impulse spending to getting out of debt, calls what she and her counselors do "financial social work."
"Financial social work is an interactive, introspective approach," says Wolfsohn, who maintains that even macro money problems like poverty and a faltering economy occur because we don't understand our relationship with money. "We're disconnected from our money, a problem that will only get worse with digital wallets," Wolfsohn says. "In another two or three years, we won't even use checks. Everything will be done on smart phones. 98% of Americans have cellphones and half of those phones are smart phones. Technology takes us further and further away from our money."
Here's the equation Wolfsohn says is responsible for our financial failure or success: Your relationship with money drives your financial behavior, resulting in your financial circumstances. Over 15 years, Wolfsohn has created a behavioral model to help people develop healthier relationships with money. Counselors who are certified by her program, created for psychologists and social workers, also include staff at nonprofits that work with people under the poverty line, and staff at consumer credit counseling agencies.
Who Should Seek Out a Financial Therapist?
Anybody can benefit from understanding their relationship with money, but Wolfsohn says that more women than men ask for help. "A lot of women come post-divorce, but they should have done it pre-divorce. Couples come too," Wolfsohn says, noting that financial issues are the number one cause of divorce.
The counseling is deep work. "It isn't a come-in-and-I'll-create-a-financial-plan for you. That's a Bandaid on the cut that doesn't address why you feel the need to buy a white fitted shirt when you already have five hanging in your closet," Wolfsohn says. Another big issue at midlife is co-signing a loan. Her advice here is simple and stringent: "Never co-sign. Understand that when you do it, you are taking on that debt. That's a biggie. Parents think they're doing the right thing, co-signing for their kids, but when things go wrong, families fall apart."
A Better Attitude Toward Money
The most critical thing a counselor does is to help people understand what's in it for them. "In this culture, nobody wants to budget, they see it as punitive. They don't understand that no business or organization can function without a budget. People don't want to face that." To effect a change in money habits that will last, Wolfson shows how adopting a personal spending and savings plan can improve your financial picture. "I stress education, motivation and support. My mission is to help men and women create sustainable financial behavior change. Financial change is a choice, individual and emotional. You have to understand that today's choices determine where you'll be tomorrow," Wolfsohn says.
"At midlife, a lot of people think this is it, things won't get any better, and there's not much I can do. The reality is that there's a lot you can do. It's important to understand that this is your time. You can make new and better choices, and then be in a better place," says Wolfsohn, adding, "I'm a big believer in hope. There is always hope. Hopelessness closes the door to change."
For more information about financial counseling, check out the Center for Financial Social Work's website, which can connect you with a counselor (they often work by phone) and offers free webinars and a biweekly newsletter.