Unconscious beliefs and emotions can mess up how people handle their finances. The hard part is finding experts qualified to handle both money and the mind.
4 min
Do you worry a lot about higher food and gas bills? Fight with your spouse over spending splurges? Fear you’ll outlive your savings?
Some people seek to ease such money anxieties by hiring a financial therapist.
The goal of financial therapists ultimately is to help people make good financial decisions, typically by raising their clients’ awareness of how their emotions and unconscious beliefs have affected their sometimes messy experiences with money.
Needs for such help often arise following a job loss, bankruptcy or marital partner’s financial infidelity—when one spouse hides or misrepresents financial information from the other. Even something seemingly positive, such as getting a big inheritance or winning a lottery, can cause financial anxiety.
“Folks are craving help with financial well-being,’’ says Ashley Agnew , president of the Financial Therapy Association, a professional group launched in 2009.
Financial therapists tend to come from mental-health and financial-planning disciplines, and there are signs that their ranks are rising: The Financial Therapy Association has 430 members, up from 225 in 2015. Still, according to the group, fewer than 100 financial therapists have completed its certification process, introduced in 2019. You can be an association member without being certified by it.
The reason for the increased interest is clear: Many Americans are worried about their personal finances. In a survey of about 3,000 U.S. adults conducted last October by Fidelity Investments, more than one-third of respondents said they were in “worse financial shape” than in the previous year. Some 55% of those respondents blamed inflation and cost-of-living increases.
Similarly, 52% of 2,365 Americans polled for Bankrate.com  said money negatively affected their mental health in 2023. That is 10 percentage points higher than in 2022. Financially anxious and stressed individuals are less likely to plan for retirement, prior research has concluded.
New York advisory firm Francis Financial hired financial therapist Allen Sakon last November to aid individual clients. Many are divorced or widowed women with complicated money problems.
Certain clients “don’t believe they have enough resources, even though objectively they do,” says Sakon, who is a certified financial therapist, financial planner and accountant. Meanwhile, others with limited means mistakenly believe “they can live as extravagantly as they want,’’ she says.
Sakon currently counsels a recently divorced woman who is struggling with her dramatically lower income and the imminent sale of the family’s suburban New York home. “Her world has been turned upside down” by a financially messy divorce, Sakon says.
Though the woman has stressful new money responsibilities, she long avoided financial decisions, according to Sakon. “A money-avoidant grown-up is typically someone who was excluded from money discussions as a child,” she says.
Sakon says she hopes to eventually help this client feel capable of making financial decisions based on her resources and the financial plan that Sakon created for her.
Nate Astle , a certified financial therapist in Kansas City, Mo., met nine times from May 2023 to February 2024 with Andrea and Gianluca Presti , a 30-something Texas couple who were having persistent spats over money. Andrea Presti , an email marketer, says she believed that “if we didn’t go to financial therapy, I was going to question our entire relationship and whether we could continue.”
The wife cites an argument over the possible purchase of an expensive new car to replace their decade-old vehicle as an example of the couple’s financial conflicts. They disagreed over whether to give up a car that still worked well.
The husband, Gianluca Presti, a music producer, says financial therapy taught him and his wife to communicate better through active listening. He says he stopped being the couple’s money gatekeeper, became more open-minded about spending—and agreed to pay up to $45,000 cash for a new car. “We have to be a team if we want to solve financial issues,” he now realises.
Astle helped the Prestis revamp their household budget as well. It now reflects each spouse’s interests by including expenditures, investments and savings.
Astle, who is also a marriage and family therapist, says he has seen his financial-therapy clients more than double to 43 since 2022.
Still, there are possible pitfalls when hiring a financial therapist. One major drawback: Anyone can claim they are qualified to practice financial therapy.
No government agency regulates the young profession. Candidates for certification by the Financial Therapy Association must take online courses designed by the association covering financial and therapeutic techniques, counsel clients for 250 hours and pass a 100-question test. But you can call yourself a financial therapist and not be certified by the association.
Meanwhile, the cost of financial therapy varies widely—from $125 to $350 an hour, Agnew estimates. Insurance rarely covers the tab.
In addition, there is no broad evidence that financial therapy works well. No large-scale studies demonstrating the field’s effectiveness have been conducted.
Another potential downside is that financial therapists with mental-health backgrounds typically lack extensive financial-planning experience—and vice versa. It is wise to interview at least three financial therapists, experts suggest. Then, pick someone who admits the limits of their expertise.
“I am very upfront about my boundaries,” says practitioner Aja Evans , a licensed mental-health counsellor who isn’t certified in financial therapy. Evans adds that she failed the certification test but plans to take it again during 2024—and before she becomes Financial Therapy Association president in January.
She says she feels well-qualified to help clients recognise how their upbringing affects their money beliefs today. “But I am in no shape or form going to be advising you about your investments, money moves or creating a financial plan,” Evans says. For clients who want that assistance, she says, she refers them to certified financial planners and accountants she knows well.
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Strong family financial planning can help reduce taxes and support younger generations. From intrafamily loans and asset gifts to inheritance disclaimers, strategic cooperation can create meaningful financial benefits—when families have the trust and structure to make it work.
4 min
Happy is the family whose members—parents, grandparents and grown children—trust each other enough to cooperate on shared goals, especially financial ones. When that is truly the case, Uncle Sam’s tax rules can help as well.
This matters especially now that mortgage rates are above 7%, and many families are looking for ways to help younger members. If the elders have resources and are confident younger ones can cooperate, a family loan could make homeownership possible while providing the elders with a useful income stream.
Other strategies can actually lower taxes, such as when funding 529 plans or Roth IRAs, or when someone inherits a traditional IRA with required withdrawals larger than they will need.
Here are three strategies useful for functional families.
It is perfectly legal for families to lend money to a relative for a down payment or even a private mortgage.
But it is important not to cut corners, says Ryan McKeown, a CPA with Modern Wealth Enhancement in Minnesota. If the loan is for a down payment, be honest with the mortgage provider and have a formal agreement. The lender owes tax on the interest payments received.
If the loan is for a private mortgage, both sides should have legal representation with a formal written agreement, including payment terms. The lender owes tax on the interest, and the borrower often can deduct it if he or she itemizes.
To avoid IRS trouble, the interest rate shouldn’t be lower than the agency’s Applicable Federal Rate at the time of the loan. Currently that is about 5% for loans longer than nine years; about 4.5% for loans three to nine years; and about 4% for loans three years or less. Currently, traditional mortgage rates are generally above 7%.
In addition, the lender could use the $19,000 annual gift-tax exemption (described below) to forgive some or all of the interest or principal annually. If both lenders and borrowers are married, that is up to $76,000 a year. There is no tax for the borrower on such forgiveness, because it is from a gift.
If you’re going this route, McKeown advises against having a fixed plan to forgive the debt. Instead, do it in one-off letters specifying the amount—and keep careful records. Otherwise the IRS might try to treat the loan as a taxable gift.
Powerful tax-saving moves for families often use gift-tax provisions. Under current law, anyone can give anyone else up to $19,000 of assets annually, free of gift tax. That means a married couple with three grandchildren could give them a total of $114,000 in 2026.
The gifts can be cash or other assets, like stock. For noncash gifts, the cost basis—which is the starting point for measuring taxable gain after a sale—“carries over” to the recipient. So if someone buys $1,000 of stock and gives it away when it is worth $5,000, the recipient’s cost basis is $1,000. If the recipient later sells the shares for $8,000, the taxable gain is $7,000.
Here’s an example showing how gifts could save a family taxes. Grandma is a widow of modest means, while her child and spouse have prospered. The couple has two children, and they want to contribute $5,000 to a 529 college-savings plan for each—but they need to sell stock to do it. Their tax rate on the sale would be 18.8%, and they would need to sell about $11,000 of stock.
However, Grandma’s federal tax rate on the stock sale is 0%. If the couple gives $10,000 of shares to Grandma, she could sell them, pay no tax, and fund the grandchildren’s 529 plans. This saves about $1,000 of tax.
These moves are legal, and they could be used in other ways, such as to help a young person fund a Roth IRA.
But trust among family members is essential: Under the law, givers can’t put conditions on a gift. Grandma could use her stock proceeds to take a cruise, but she makes 529 contributions instead.
Mark Sellner, a retired tax attorney and CPA living in Sarasota, Fla., uses this strategy. His children sell stock he gives them and fund 529 plans for his grandchildren.
The family’s tax savings aren’t huge, but he likes other benefits. The sales by his children don’t boost his adjusted gross income, which in turn could raise his Medicare Irmaa premiums or his 3.8% surtax on net investment income.
Sellner doesn’t worry about his children using the funds for another purpose.
“There can’t be any strings attached to gifts. Of course, it is up to us to decide whether to make them in the future,” he says.
Two caveats: The “kiddie tax” applies to most children under age 24, and it is levied at the parents’ rate on investment income above $2,700 in 2026. Consider this before making gifts to a young person.
Investors who give away stock also forgo the step-up, an important provision that exempts assets held at death from capital-gains tax.
Sellner knows he’s losing a step-up, but says, “The children could use a little more now. Why should they wait 20 years to get it?”
A disclaimer is a highly useful strategy in which one heir renounces an inheritance in favor of another heir. Assuming family members cooperate, this can save taxes.
Here’s one example. Dad died and had a large traditional IRA that he left to Mom. She has enough assets and income to cover her expenses, and she lives in a state with a stiff estate tax. The inherited IRA would put her estate over the threshold.
Also surviving are three young-adult children. If Mom disclaims all or part of Dad’s IRA within nine months of his death, that amount could go directly to the children. They will have 10 years to empty the account, and the family as a whole will likely save estate and income taxes.
Disclaimers have many key details, especially regarding beneficiary documents. Although heirs have great freedom in choosing what assets to disclaim, the rules about who gets disclaimed property are rigid. It is best if the original owner names tiers of heirs so that if one disclaims, the next recipient is clear.
