Save more. Spend less. Think about the future. Most people know they could be doing more to improve their finances.
But even the well-prepared – and well-off – can be thrown by a divorce, job loss or business-management issue.
Moira Somers, a neuro-psychologist who runs a financial psychology practice in Winnipeg, sees many of these kinds of problems. She estimates that 70 to 80 per cent of her clients are high-net-worth individuals.
Dr. Somers, who also describes herself as an executive coach, says she helps business people cope with their roles and responsibilities.
But her big goal is to help clients develop a better relationship with money. She helps people "settle down emotionally so they can make the best possible decisions for their families and their careers."
Most of the issues fall under these categories:
The "money-emotions times of your life," Dr. Somers calls them. They include divorce or pending divorce, the sale of a business or the contemplation of retirement, or even a big lottery win.
Most people feel stress when their earnings fall below a certain level, but also when things go in the other direction, such as an athlete signing a multi-million-dollar contract or adult children inheriting unexpected wealth from their parents.
Dr. Somers helps clients ensure their attitudes match with reality. She also puts them in touch with necessary resources, such as financial advisers or family wealth consultants.
Her high-net-worth clients often say that making money was never their goal – it was an outcome of starting a new venture or business. However, an influx of money in a family business can put pressure on existing fault lines or tensions of a family unit.
"So it's not just about divorcing couples or couples under financial duress, it can often be couples just coming to terms with their success and what the implications are for the next generation," she says.
Financial anxiety can vex those running businesses, particularly if they are raising prices or the rates for their services. Dr. Somers says that some people are "afraid to have discussions with stakeholders, they're afraid to have discussions with employees, they're afraid to raise their rates."
She talks with clients about how the brain functions, and she employs cognitive therapy and mindfulness-based stress reduction to help them make better decisions.
Some people have a tough time negotiating for what they want or deserve, whether it's closing a deal or asking the boss for a raise. She coaches her clients through mock conversations and helps them craft letters to customers to reduce anxieties over these kinds of conflict. Most people manage to verbalize their feelings only when they are in the middle of such conversations, she says, and they would do better if they organized their thoughts earlier and planned what they will say.
"We have to help people establish a state of calm," she says, adding that in those situations the cortex area of the brain, most responsible for higher thought and action, can be "hijacked" by the amygdala, which is responsible for processing emotions such as fear and anger.
Nobody likes being in debt, but it's one thing to repay a debt and it's another to avoid falling back down the hole once the credit cards have been paid off. Dr. Somers treats those with the tendencies to overspend or undervalue money.
She also helps clients bide their time, paying off debts in small increments rather than getting carried away.
"A lot of people want to throw everything they have at their debt, which kind of forces them … immediately to go [back] into debt," she says, pointing out that employing this strategy looks good until a big utility bill comes due and there's nothing left to pay it.
Relationships and family
Dr. Somers also counsels couples who are struggling with money issues but don't want to divorce. She helps them have productive conversations and "row" in the same direction.
One issue that comes up more these days concerns adult children. Some parents torpedo their own retirement by financially helping their kids, or they feel forced to do so. Either way, Dr. Somers can help them talk to their children about it.
"[Clients] want to know how to do this in such a way that it will be loving or helpful, so they can withstand the expected onslaught of protest," she says.
In fact, Dr. Somers admits that one of the best parts about her job is "seeing parents be able to stop giving handouts to adult children and really help them move in a caring and careful way toward financial independence."