Psychology of Financial Planning

Chapter 5Financial Behaviors and Outcomes

Our financial behaviors are a result of our instincts, our financial flashpoint experiences, and our money scripts. Some financial behaviors have a positive impact on our financial health, while others make it difficult to achieve our financial goals. Through education and the use of communication and counseling techniques, financial planners can have a positive impact on shaping a client's money behaviors. Although they are not in the business of diagnosing or treating money disorders, it is important for financial planners to know what to look out for in the event that a client needs a referral to a mental health professional. What follows are two assessments that can be used with clients to examine their financial behaviors and outcomes.

Exercise 14: Financial Health Scale

Financial health is more than just net worth. It includes having a plan in place for the future to protect you and your family. Good financial health is having a sense of comfort and confidence around financial matters, low levels of financial stress, and good financial communication with your spouse/partner and family members. Conversely, poor financial health is associated with a host of physical and emotional problems, which is why it is a critical aspect of our overall well‐being. According to the American Psychological Association's annual Stress in America™ survey, one of the top stressors in the lives of Americans is money.¹

The following test has been ...