Some therapist have found that most mistakes people make with their money are psychologically-based. “How you feel is how you deal….with money, that is”, says one New York psychotherapist. Here are some of the most common psychological problems people have with their finances-and what you can do about them:

Overspending is one of the most common mistakes the majority of Americans make with their finances. “This is usually related to the management of emotional pain, distorted beliefs about what people feel they deserve and a disconnection between the impulse to buy and the actual results of the purchase”, says Ms. Karol Ward New York psychoterapist. Marty Martin, a financial psychologist in Chicago advises clients who feel the need to spend, but are in a heightened emotional state, to wait to make a decision. “Collect yourself” by distracting yourself by meditating, praying, engaging in some physical activity or doing something other than making a money decision,” he says.

Financial Enabling is a common trap most Americans find themselves tangled up in from trying to help their adult children who are in chronic financial trouble. Most parents or grandparents that have a desire to spoil their children or grandchildren don’t want to give that up once they get into their own financial bind for fear of guilt. For enablers, it can be important to recognize that their efforts to help backfired or have been reinforcing dependence. Brad Klontz, a Lihue, Hawaii financial pyschologist suggest setting up a timeline to withdraw financial support so that you aren’t just quitting “cold turkey”, and it will be easier to stay on track.

Denying the reality of your financial situation and thinking that everything “will all work out” is not the best plan of defense when it comes to cleaning up your financial house. Denial combined with lethargy leads to not doing any planning but potentially becoming a burden later on to any children or family you may have. It is better to face reality head on than to sweep important issues under the rug. Mary Gresham, an Atlanta psychologist, says that there is often the “social taboo” around talking about money keeps family members from discussing inheritance and estate issues openly before anything happens, and while there is still a chance to hear everyone out and include them in the planning. To make the conversation easier, a person might introduce the topic by saying “I’d like to talk about something that is hard to talk about”, so that the other person knows it’s not just a casual conversation.

Judy Lawrence tells clients to “step up and face the numbers” of their real financial picture. That way, they can create a plan based on their true income, outline a way to gradually pay off debt and save for retirement.

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