Behavior

Psychology Matters

from Squared Away on Vimeo.

Rick Kahler believes that financial planners who do not factor in the psychological aspects of their clients’ money problems are “missing the elephant in the room.”

Kahler, a founding board member for the Financial Therapy Association, usually meets with each new client in the presence of a therapist.  And for the minority of his clients who are “stuck” and can’t get past their money issues, which are often rooted in childhood, he asks that they submit to psychological coaching.

In his 2008 book, “Facilitating Financial Health,” Kahler identified several common money disorders.  The South Dakota planner recently shared his ever-evolving list, which Squared Away used as the basis for the above slide show.

Click here to watch an interview in which Kahler talks about our “number one stressor.”

4 Responses to Psychology Matters

  1. As a trained cultural anthropologist, I can’t agree more. We have conceptions about money that are learned in childhood. But I also think they are revised throughout our lives, by us and by our consumer culture (with its very effective advertising).

    We spend money to say different things at each stage of our lives. In our teens, we buy one set of things to distinguish ourselves and our “group” from one another. As young adults we buy other things – cars or clothes – to make claims about our economic status and success. We buy expensive carriages and toys to show our status and hopes for our children (to get into the Ivy League). When we move into middle age, we add creams and dye our hair, buy NYDJ jeans, and get face lifts, etc. Some want to make points at funerals, so they may buy an extremely expensive coffin to make a statement about a family member.

    The list goes on. What we often ignore is the impact of these buying decisions, on our balance sheets, and our future financial security. It is this cultural pattern of ignoring and avoiding that creates much of our money stress.

  2. Ally Checks says:

    Yes, emotion is very much involved in purchasing decisions. Just take a look at a typical wedding. How else could you justify spending $50,000 for one day.

  3. I like all the pictures of your blog, but I am confused about the reason behind this video. Please update with more information.

  4. Kim Blanton says:

    You’re absolutely right that this blog post, in hindsight, doesn’t explain the meaning of the video!
    Mr. Kahler argues that people have various unhealthy money behaviors that are harmful. This video features just seven of them.