It has been a year since the pandemic hit, and people are getting by and are already back to their normal life routines. However, most of them still struggle with the financial issues that COVID-19 left them. Some of it includes losing long-term employment, closing a business store, and increasing unpaid monthly bills.
People are still trying to figure out how to get through the pandemic’s financial impact on the world. And if you are one of those individuals who deal with stress and financial survival guilt, you are not alone.
The financial effect of the pandemic is not limited to monetary since your mental and emotional health surely received a devastating impact. But remember that the pandemic is not your fault. Thus, it would be best if you weren’t guilty of the world’s financial crisis nor get mad with the companies who choose to lay off to save their businesses.
What is financial therapy?
Financial therapy is a treatment service that aims to address an individual’s feelings, thoughts, and behavior toward handling money. It examines how money affects a person’s life. But note that financial therapy is different from financial planning. Financial therapy is administered by a licensed therapist who studies the intersection of emotional, behavioral, psychological, and relational to the financial state. On the other hand, financial planners focus more on financial goals, budgeting, and retirement.
One of the significant assets of financial therapy is its financially goal-oriented process. The treatment looks into topics ranging from financial stressors and coping mechanisms to routines of monetary expenses and expenditures. The role of the treatment revolves around financial literacy and educating clients to better manage their monetary endeavors. The treatment aims to empower people and provide them with the opportunity to become aware of their financial relationships.
Inside The Scope
Financial therapy is essential for learning, healing, and growth. It can assist with monetary interaction and help understand how people see a society with regard to its financial state. It helps people discover their value and potential and develop a wiser and healthier relationship with money.
One of the most vital topics in financial therapy is the importance of spending. If you value conservation and community involvement, you will purchase something in a local farmers’ store rather than expensive items or concert tickets. If it’s the latter, you should evaluate what’s more important to you so you can manage and spend your money accordingly.
Note that people deal with financial problems differently. What might be a burden to them may be simple to you and vice versa. Individual income, savings, and wealth also require different considerations since you and other people have more or less due to a variety of factors. However, here are the common causes of financial problems.
High Levels Of Debt But Lower Income – One of the common causes of financial downfall is debt. Without the funds to pay it off, it can go up. It can affect the whole capital stock or savings as it will heighten interest rates. As a negative result, people end up giving up their houses, cars, and other valuable belongings.
Loss Of Employment – Losing a job is the top concern for financial problems since working sustains the monetary flow, especially on daily necessities. In some unfortunate situations, loss of employment can cause physical and mental strain. It can also complicate and bring familial and marital relationship issues.
Foreclosure Or Bankruptcy – Foreclosure only damages people’s credit scores for about seven to ten years. People might still find ways to work on their other expenses despite that. On the other hand, bankruptcy hinders them from a financial start-over since it will not get rid of the other debt that, includes state taxes.
Growth Of Financial Responsibility – Once there is a lack of financial income, the responsibility immediately grows. There is a huge demand for cash flow due to lifestyle maintenance and social, environmental, and economic contributions. With limited monetary availability, there is surely an incoming pile of debt.
Spending Habits And Behaviors – Financial problems often arise due to a person’s spending habits and behaviors. His association with money revolves around earning less while spending more. It is a complication that leaves an individual with fewer funds to use in an emergency.
Compulsive Gambling – Though this may not be common to the general public, quite several people struggle with compulsive gambling. It may start as a small portion of extra money and eventually use all the savings. It is a problem since it is considered an addiction.
Final Thoughts And Takeaway
There is no right and wrong way of spending or saving money. Culture, education, and personal experiences shape people’s values and financial literacy beliefs.
Seek money-mindset assistance that can help you understand more about financial recovery. These include listening to a financial podcast, talking to a friend, asking a financial advisor, or seeking a financial therapist.