Financial Therapy: Credit Profile of Low-Income Families, Financial Empowerment Model

 In Money Habits & Attitudes Blog

The latest issue of the Financial Therapy Association’s Journal of Financial Therapy just came out. The association and journal are concerned with the link between personal financial knowledge, attitudes, and behaviors and personal and family well-being. The assimilation speaks to the: financial planner, financial educator, therapist, financial manager, financial therapist, money coach, etc. Two new articles of note:

THE FINANCIAL CREDIT PROFILE OF LOW-INCOME FAMILIES SEEKING ASSETS by Julie Birkenmaier, Jamie Curley, Patrick Kelley

Individual Development Account (IDA) participants need strong credit histories to access affordable credit for their IDA asset purchase … Compared to national IDA participants, participants in this study had higher incomes, were more educated, and had a higher rate of being “banked.” … However, participants also utilize higher-cost alternative financial services, such as payday lenders and pawnshops, at similar rates to other low-income families and are beginning their IDA programs with low credit scores and poor credit history.

A THEORETICAL APPROACH TO FINANCIAL THERAPY: THE DEVELOPMENT OF THE FORD FINANCIAL EMPOWERMENT MODEL by Megan R. Ford, Joyce A. Baptist, Kristy L. Archuleta

The purpose of this paper is to introduce an integrative approach to working with clients experiencing problems related to financial disempowerment. The multi-phase model integrates three theoretically-driven psychotherapy approaches, including cognitive behavioral, narrative, and Virginia Satir’s experiential therapies, and financial counseling techniques to increase one’s sense of financial empowerment. A case study is included to demonstrate the applicability and effectiveness of the model.

Money Habitudes is used by both financial planners and financial educators as well as therapists, counselors and coaches (and at integrative financial therapy centers) because it addresses not just money, but the psychology behind spending and saving. It helps clients and patients better understand themselves and gives professionals a non-judgmental way to start important, breakthrough conversations.

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