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How Cognitive Behavioral Therapy Can Prevent Poor Financial Choices


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Financial hardship befalls most of us at some point in life. A job loss, medical expenses, and poor investment performance are just a few of the more common obstacles to a sound financial picture. Sometimes, however, these obstacles are not beyond our control. According to a Stanford University study, roughly 6% of women and 5.5% of men are compulsive buyers – people whose excessive spending patterns cause interpersonal distress or financial hardship. Such people are more likely to have multiple credit cards, more credit card debt, a tendency to pay only the minimum monthly requirement, and to endure more interpersonal conflict regarding finances than other consumers.

If your spending habits cause conflict in your marriage, distress within your family, or a perpetual state of barely making ends meet, then consider using a cognitive behavioral therapist. Such professionals can quickly and effectively address problem behaviors like compulsive buying before they spin out of control.

What Is Cognitive Behavioral Therapy?

Psychotherapy is a general term that encompasses all types of psychological and emotional work that take place in the office of a counselor or psychologist. Like other forms of psychotherapy, cognitive behavioral therapy (CBT) is a specific treatment designed to help people live happier and healthier lives. Specifically, it helps you recognize and address thought patterns that lead to problem behaviors. If you struggle with compulsive spending, CBT may help you understand and change the thoughts, emotions, and beliefs that immediately precede a shopping binge.

The technique is employed by a variety of mental health practitioners, including psychologists, licensed professional counselors, and clinical social workers. CBT can stand alone, or can be used in conjunction with other therapeutic treatments. It is especially effective for motivated individuals who want a problem behavior to change quickly.

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Characteristics of CBT

Even though CBT is a form of psychotherapy, it is quite unique from other therapeutic treatments. It could be right for you if you prefer a brief, direct, results-oriented approach.

Often, therapy guided by CBT has the following qualities:

  1. Brief and Time-Limited. Before an initial session, many people have a preconceived notion that they’re going to be stuck seeing a therapist for years. While this may be true of psychoanalytic or psychodynamic approaches (the traditional “talk” therapies that many people associate with psychotherapy), CBT clients only need an average of 16 sessions to address their goals.
  2. Driven by Self-Counseling. CBT is based on the assumption that people get better because they learn how to get better. Therapists, therefore, spend a lot of time coaching clients on how to work through emotions with their own skills. This technique is intended to set clients up for success when the CBT process is complete.
  3. Goal-Oriented. CBT practitioners ask clients about their specific goals for treatment so those goals can be pragmatically addressed within a short time-frame. If you struggle with compulsive spending, your treatment would be highly focused on addressing your spending habits, rather than using therapeutic time to discuss your childhood memories or marriage difficulties.
  4. Structured. Since CBT is usually brief, each session is structured to make the most of the allotted time. CBT practitioners follow a set agenda, teaching specific concepts during each visit and coaching clients in relaxation techniques, healthy introspection, and alternatives to their problem behaviors.
  5. Focused on the Unlearning Process. CBT assumes that emotional and behavioral reactions are learned by life experiences – when emotions and behaviors are problematic to an individual’s health, those reactions should be unlearned. If you’ve identified problem behaviors, CBT can give you the skills to do this.
  6. Heavy on Homework. CBT practitioners assume that practice makes perfect. Therefore, clients are encouraged to develop their skills at home so that they can bolster the unlearning process.
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The ABCs of CBT

CBT practitioners generally have multiple degrees and thousands of hours of experience, so you shouldn’t try to teach yourself the technique without their assistance. You can, however, get a basic understanding of how and why CBT works by considering the following guidelines as you evaluate one of your problem habits. This can work for serious issues like compulsive spending as well as less severe problems.

  1. Activating Event. People don’t often give much thought to the circumstances that drive their negative behaviors, but CBT professionals argue that a single event usually triggers each one. This event can be something specific like an argument or a bad evaluation at work, or something less easily recognizable, such as a glare from a stranger on the subway or a friend who forgot to call. Each activating event usually causes an immediate internal reaction, which is often subconscious. Reflect on the events or circumstances that precede the behavior you want to change. Once you identify what triggers the action for you, you’re better positioned to change it.
  2. Beliefs About the Event. Often when an activating event occurs, an individual subconsciously recalls a set of dearly held beliefs related to it. These beliefs are either rational or irrational, and they are usually formed from previous life experiences. For example, people who don’t get the job they want may mistakenly believe it’s because they aren’t smart enough or good enough, when in fact they were the second choice out of a highly qualified pool of candidates. This thought is irrational, but it’s based on past life experiences and self-beliefs that individuals may not even be aware of. CBT assumes that activating events are unavoidable in life, but that people can learn to identify and stop the irrational thought processes that follow.
  3. Consequences. Beliefs seldom remain internal. They usually cause feelings and behaviors that play out in the real world. Depending on whether they are rational or irrational, they trigger either positive or negative feelings and behaviors, such as overspending. CBT practitioners believe that behaviors change when beliefs change, so they work closely with clients to help them unlearn irrational belief systems.

These ABCs of CBT can play out in a variety of ways, depending on what a person’s specific problem is. To make the components of CBT more clear, consider the following example related to compulsive spending:

  1. A Problematic Event. A man goes to the gym one day to work out on the treadmill and lift weights. He’s excited to go because he often chats there with a woman he’s grown to like. He’s even considered asking her out on a date. Today, however, she’s talking with a different man who is very clearly a romantic interest. The man is flooded with jealousy and anger that he didn’t act sooner.
  2. Rational Versus Irrational Beliefs. From the outside looking in, most people could see the problematic event as what it is: slightly painful, but not really personal. Rationally, the man in the example missed out on a love interest, but it wasn’t because there was something “wrong” with him. A lifetime of experiences, however, have shaped his beliefs about it and told him that if he’d been more handsome or more wealthy, he would have asked the woman out successfully.
  3. Negative Financial Outcomes. The man’s irrational beliefs may precipitate negative financial behavior. If he feels he could have avoided the problematic event by being wealthier, he may go out and purchase clothing he can’t afford or sign up for an expensive car payment in order to boost his self-image. The problem with this, of course, is that he cannot change the problematic event, and the financial consequences he carries with him can cause ongoing emotional and interpersonal pain.

The trick, therefore, is to become aware of your beliefs and distinguish between those that are rational and irrational. If the man in the example had worked with a CBT practitioner, he could have recognized the activating event, substituted rational beliefs for his irrational ones – such as pausing to remember that the woman didn’t actually reject him – and prevented himself from overspending.

Finding Help From a CBT Practitioner

If  you’re interested in seeking help from a CBT practitioner, start by calling your health insurance provider to determine whether you can save money by using your mental healthcare benefit for therapy. The health plan should provide you with referrals to therapists who specialize in CBT.

If you don’t have insurance, you can expect to pay anywhere from $30 to $120 per hour for these services, depending on your income. Many counseling offices use sliding fee scales, so your therapist may work with you to determine what you can afford.

If the rate offered is too high for you, call a few local graduate schools to determine if you can see a student for services. These students have adequate education but are required to see clients under supervision, so you can sometimes obtain free therapy from someone in training rather than a fully licensed practitioner.

If you don’t have insurance or your plan is not helpful, you can search the Association for Behavioral and Cognitive Therapies, which refers clients to several types of therapists, including CBT practitioners. Its search tool allows you to specify the particular issue you’re facing, as well as your preferred zip code.

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Final Word

If you have a problem behavior that’s financial in nature, addressing it before it hurts your emotional, interpersonal, and financial health is important. CBT is a brief and effective therapy that can quickly alter your beliefs, helping you learn how to suspend your poor financial choices before they get out of control. Even if you’re leery of visiting a counselor lest you be deemed “crazy,” try to remember that the only thing that’s truly “crazy” is repeating the same damaging behaviors over and over without intervention, while expecting different results.

Have you regained control of your compulsive spending habits?

Mary McCoy, LMSW is a licensed social worker who works closely with individuals, families, and organizations in crisis. She knows first-hand how financial choices can prevent and mitigate crises, and she's therefore passionate about equipping people with the information they need to make solid financial decisions for themselves and their loved ones. When Mary isn't on her soap box, you can find her hiking, jogging, yoga-ing, or frolicking with her family.