I hope you all enjoyed your Thanksgiving holiday yesterday.
For decades the field of behavioral economics has been pointing out that we are not simply spreadsheets with arms and legs. The decisions we make are frequently at odds with what a perfectly rational analysis would recommend.
A newer field, however, is the field of financial therapy. Financial therapy essentially takes as a starting point the fact that emotional factors play a huge role in our financial decisions. And it then asks, “given that, how can we help people to make better financial decisions (i.e., financial decisions that will better serve their overall well-being)?” In other words, the financial therapist uses a blend of financial competencies and therapeutic competencies to actually help people enact behavioral change.