knowledge topics

Values, Attitudes, Emotions and Disorders Related to Money

KNOWLEDGE EXPECTED OF: Both CFP^® Professionals and QAFP^TM Professionals

Identify the levels of Maslow’s Hierarchy of Needs.^†
- Physiological
- Safety
- Belongingness / Social / Love
- Esteem
- Cognitive
- Aesthetic
- Self-actualization
- Transcendence
Explain how Maslow’s Hierarchy of Needs may impact financial decisions.
Explain the importance of safety (financial security) to overall well-being.
Identify beliefs about money,^†† such as:
- Money is good
- Money is bad
- Money represents achievement
- Money is power
- Money is unimportant
- Money provides security
- Money should be retained/conserved
- Money will give meaning or bring happiness
- Money is not to be spoken about
- There will never be enough money
- There will always be enough money
- I do not deserve money
- I deserve to spend money
Identify factors that may impact an individual’s association with money, such as:
- Previous learned experience
- Observations of friends / family / parents’ use of money
Identify associations with money that may impact an individual’s decision making and behaviour.
- Emotional association with money
- Financial literacy with money
- Level of knowledge about financial matters
- Sophistication in using money
Define practices associated with money, such as:
- Workaholism
- Compulsive buying disorder
- Pathological gambling
- Compulsive hoarding
- Inability to budget
- Excessive need for instant gratification
- Financial paralysis
- Underspending
- Overspending
- Financial enabling
- Financial dependency
- Vow of poverty
- Financial incest (overexposing children to money problems)
- Financial infidelity (hiding financial matters from spouse)
- Sudden wealth syndrome (unexpected windfalls)
- Poor investment decisions
- Excessive risk taking
- Excessive risk aversion
Define grief.¹
Identify that each individual’s approach to grief may be different.
Identify events when grief may be experienced, such as:
- Death of an important person
- Death of a pet
- Loss of relationship
- Loss of job
- Diagnosis of illness or health problem
- Experiencing catastrophic loss
Explain the stages of the Kübler-Ross (five-stages) model of grief.
- Denial
- Anger
- Bargaining
- Depression
- Acceptance
Explain how the Kübler-Ross (Five-Stages) model of grief may impact decision-making.
Identify circumstances when a medical practitioner may be beneficial, such as:
- Debilitating anxiety
- Depression
- Significant relationship dysfunction
- History of painful or traumatic experiences around money
- Addictive or compulsive behaviours
- Chronic inability to change destructive financial behaviours or follow through on financial plans
Identify areas where mental energy may be spent, such as:
- Managing pain and stress
- Directing attention
- Making decisions
- Resisting temptations
- Controlling emotional displays
- Forming new habits
- Completing every day chores
- Learning new things
Identify that when greater amounts of mental energy are spent on one area to the detriment of other areas, mental depletion may occur.
Identify potential signs of mental depletion, such as:
- Amplified emotional reactions
- Physical fatigue
- Mental fatigue
  - Difficulty making decisions
  - Confusion
  - Hyper focusing
  - Rigidity in thinking
- Cessation of good habits / increase of bad habits
Identify potential risks of mental depletion, such as:
- Diminished learning capacity
- Flawed decision making
- Vulnerability to temptation
- Non-adherence to change / recommendations
Identify potential aids to reducing mental depletion, such as:
- Sleep
- Nutrition
- Exercise
- Mental relaxation techniques
Identify effective strategies when engaging with an individual who may be suffering from mental depletion, such as:
- Affirm the individual
- Remove stressors
- Simplify decision making
- Prioritize decisions
Identify what a financial planner may recommend when an individual may be suffering from mental depletion, such as:
- Postpone decision making
- Postpone providing information to client
- Postpone educating client
- Reschedule meeting

Glossary of Verbs (mouse over to see definition)

Define

To state exactly the meaning of
Identify

To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain

To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Compare

To note the similarities and differences between two or more things
Estimate

To determine an approximate value for
Calculate

To find the value using mathematics
Convert

To change from one form or purpose to another
Evaluate

To reach a conclusion or make a judgement through careful study
Interpret

To give the meaning of / to construe or understand / to translate orally

REFERENCES

previous / Change Process

Financial Planning Body of Knowledge

knowledge topics

Values, Attitudes, Emotions and Disorders Related to Money

KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals

Glossary of Verbs (mouse over to see definition)

RELEVANT CASE STUDIES

REFERENCES

KNOWLEDGE EXPECTED OF: Both CFP^® Professionals and QAFP^TM Professionals