Dr. Mary Gresham, an Atlanta psychologist who has developed a model for structuring a healthy relationship with money for individuals, says the American Psychological Association (APA) has ignored the growing problem of American mental illness caused by financial issues and is petitioning the group to start a financial division.
According to the APA’s annual survey, Gresham says, the No. 1 stressor cited by Americans for the last two years has been money. Yet the APA has no formalized training or programs dedicated to the topic, she says. “Money has placed first for the last two years but psychologists don’t have any particular training to do financial therapy,” says Gresham.
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Gresham, who counsels wealthy families in collaboration with financial advisors, last August formally petitioned APA to create the new division. APA, she says, has dragged its feet every step of the way. With more than 154,000 members, APA is the largest association of psychologists worldwide. (A copy of Gresham's petition is reprinted below.)
“It took six months for APA to post my petition on its website and enable electronic signatures,” says Gresham. “I called them every week for six months because if I did not do that there was no way it was going to get done. It’s a huge bureaucracy.”
Gresham says APA already has 54 divisions. Creating a new division means every existing division receives fewer dollars from APA. So the existing powers are in no rush to create a Financial Division at APA.
Yet the need is acute, Gresham argues. Gresham says recent research by AARP shows a steep decline in financial wellbeing of Americans between the ages of 55 and 65, “because so many of them have lost jobs and, with it, health insurance coverage.”
Gresham says other developed nations with stronger social safety nets — Canada, Australia, New Zealand, Denmark, Sweden, and Norway — are not experiencing the same uptick in financial stress. (Impressively, Gresham listed those nations off the top of her head when asked about comparative data in other developed countries.)
Gresham’s passion stems partly from her discontent with the current academic home for family financial research. The leading scholarly journal for academics studying family finance, The Journal of Financial Therapy, is housed at Kansas State University’s department of consumer economics, which is the old home economics department, Gresham says.
“Psychologists did all the original behavioral finance research,” says Gresham, adding that Daniel Kahneman, the only psychologist ever to become a Nobel laureate in economics.
“We do better research,” says Gresham unapologetically. “It’s scientifically more sound because our studies are of better quality.”
Gresham, who earned her Ph.D. in Psychology at Georgia State University, formerly had a clinical practice but now specializes in working with wealthy families and their financial advisors. While doing her collaborative work with advisors and families, Gresham has kept one foot firmly in academia, proposing a model for “a healthy relationship with money.”
Gresham’s Model For Healthy Relationship With Money addresses four key aspects of an individual’s relationship with money: rational and mathematical; values and spiritual issues, emotional and relational aspects, and a process for exploring each aspect of an individual.
In addition to the stress problems caused by money issues affecting millions of Americans, Gresham says American society must address the intersection of mental health with money because its charitable class is facing a crisis.
Gresham says a Boston College study of ultra-high-net-worth families worth in excess of $25 million found are facing serious psychological issues. “The American Psychological Association is doing nothing to help these families, who are some of the most philanthropic families in the country,” says Gresham. “While there are some psychologists who have made this a practice area, the field of psychology is doing little to train psychologists how to address these issues.”
Says Gresham: “Money—whether you have too much, too little, or are just in-between— is a loaded issues like sex or food.”
Petition for the Division of Financial Psychology of the American Psychological Association
Dear American Psychological Association:
We ask that you consider our petition to establish a new APA division, Division of Financial Psychology.
The APA’s annual “Stress in America” Survey and other data suggest that concerns about financial issues are significant, multi-dimensional and pervasive. Results of the APA’s surveys consistently indicate money as a primary source of stress in people’s lives. In four out of the last five years, money placed first on the APA’s Sources of Stress list, a pattern whose origin pre-dates our current recessionary times. We believe that creating a Division that specializes in the scholarly and practical study of the financial lives of individuals, couples, families and groups is of inherent benefit and value to the field of psychology.
Practitioners and researchers in the field of financial therapy and counseling will be served by this division. The recent creation of the Financial Therapy Association indicates the need for an organization that incorporates the concerns of professionals in both financial and behavioral fields. Developing theory, research and evidence-based interventions in this field will be a rich addition to the field of psychology.
The study of family businesses and their complex dynamics is considered to be a part of this division’s interests. Research on family businesses and training on best practices in family business and wealth consulting is of interest to our division.
The study of behavioral economics is both timely and relevant to our division. The growing body of research and practical interventions related to the principles of behavioral economics will be incorporated into our division.
Research and training in the field of financial literacy education and the establishment of programs in educational institutions is of interest to us as well.
Establishment of a Financial Psychology Division is congruent with the APA’s history of demonstrating leadership by addressing emerging issues and is in alignment with the guiding principles of the American Psychological Association. We appreciate your consideration of our petition to establish the Financial Psychology Division.
Mary Gresham, Ph.D.
Karen Weisgerber, Ph.D.
Brad Klontz, Ph.D.
Joe Lowrance, Psy.D.
If you are a member of the American Psychological Association and would like to help us begin a new division for financial psychology, please log in to the APA website and sign the petition electronically. If you have never set up your login to the website, you can do that using the MyAPA feature. We appreciate your support and hope that you will help us with this important change.Initial dues for the first year will be $10.00
Dr. Mary Gresham