How a financial therapist can help you with money anxiety

Money commonly negatively affects people’s health, causing feelings like anxiety, stress and depression. For some people, it’s a persistent problem: Nearly one in three (29 percent) U.S. adults who say money has a negative impact on their mental health are impacted daily, according to a recent Bankrate survey.

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When those money worries remain for weeks or months at a time, it may help to reach out to a financial therapist who can provide support. Over the past decade, more counselors specializing in financial therapy have begun to help people understand how finances affect their mental health and give them the steps to build better financial mindset habits for the future.

A financial therapist can’t manage your money for you, but they may be able to help you through the stress that can come from money. Here’s what a financial therapist does, and why they can be a resource when money affects your mental health.

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More than half (52 percent) of U.S. adults say money at least occasionally has a negative impact on their mental health, according to Bankrate. The largest percentage of them say it affects them daily:

Gen Zers (ages 18-26) and millennials (ages 27-42) are more likely to experience daily negative mental health due to money than older generations like baby boomers (ages 59-77). Around one-third of Gen Zers (32 percent) and 38 percent of millennials who say money has a negative impact on their mental health say they worry about money daily:

Source: Bankrate

Note: Among those who say money has a negative impact on their mental health

In comparison, only 26 percent of Gen Xers and 22 percent of baby boomers who say money has a negative impact on their mental health say they worry about money daily. More baby boomers who say money has a negative impact on their mental health say they worry about money monthly (32 percent).

Turning to a financial therapist can be a way to find support when money is negatively impacting your mental health. The idea of a financial therapist is relatively new; one of the first self-described financial therapy organizations, the Financial Therapy Association (FTA), began in 2009 and started publishing studies that same year.

The trend of financial therapy has grown as more Americans generally begin to seek mental health care to learn new coping strategies for anxiety, depression and other mental health conditions. In 2021, 11.1 percent of U.S. adults were counseled by a mental health professional, according to the latest data available from the Centers for Disease Control and Prevention (CDC), up from 9.5 percent in 2019. The FTA’s database now has 80 members offering financial therapy or non-clinical guidance, specializing in subjects like receiving sudden money, insurance, layoffs, retirement, budgeting or trauma.

Financial therapists can break down financial stressors that may be affecting you, help unpack financial trauma and provide other therapeutic guidance. A financial therapist is typically not a licensed financial advisor and they may not have a fiduciary duty, meaning they won’t manage your money for you.

For Lindsay Bryan-Podvin, a Michigan-based financial therapist and coach, her role is less about guiding people through the nuts and bolts of how to manage a bank account and more to do with understanding emotions tied to money.

“A financial therapist really helps people at the intersection of how emotions, psychology and systems impact why they do what they do with money and to help them make choices that feel best for them about their personal finances,” Bryan-Podvin told Bankrate.

Financial therapistA financial therapist is usually a licensed mental health professional who specializes in helping mental health symptoms caused by financial stress, as well as help clients budget or set financial goals. They may have additional financial training or certifications, though no one certification is required for someone to call themselves a financial therapist.

Licensed Master Social Worker (LMSW) or Licensed Clinical Social Worker (LCSW)LMSW and LCSW refers to two different social work licenses, providing non-clinical or clinical social work services, such as therapy. Both licenses require at least a master’s degree. Additionally, LMSWs require an exam and LCSWs require two years of field experience.

Financial advisorA financial advisor can help you create a budget or estate plan, manage your investments or guide you on when to take Social Security, among other hands-on financial duties. A certified financial planner is licensed by the Certified Financial Planner board and acts with a fiduciary duty, meaning they are legally required to put your interests before their own.

Bryan-Podvin was already a therapist specializing in anxiety and depression disorders when she began to feel underqualified to help clients with the emotional side of money. When she struggled with bills after graduate school, commonly available personal finance advice wasn’t helping.

“Every time I picked up a book, I felt like I was getting yelled at. It was, ‘It’s your fault you’re in this situation. You didn’t work hard enough. You didn’t save enough.’ And I’m like, I’m doing everything in my power,” Bryan-Podvin said. “I knew what it was like to be on the receiving end of incredibly individualistic and shame-laden personal finance advice, and I just thought that I was not alone in that.”

Fees for financial therapy vary from provider to provider, just like other forms of therapy. Financial therapists are obligated to clearly disclose their fees and billing structure in the first meeting or session.

Financial therapy is difficult to provide under health insurance, Medicare or Medicaid, according to Bryan-Podvin, though it’s easier if the mental health practitioner can classify the therapy under a diagnosis like anxiety or depression.

If therapy fees aren’t in someone’s budget, they can seek credit counseling through a non-profit organization. Credit counseling can’t address mental health issues directly, but counselors often offer free workshops, education and advice to help manage money and debt.

Cost can lock low-income people out of financial therapy, but Bryan-Podvin says she’s seeing more financial and mental health resources become available to minority communities.

“Even if it isn’t a specific financial therapist, finding communities, whether it’s a Substack newsletter or a hashtag that you follow, finding people who can validate, emphasize and normalize your lived experience actually [helps],” Bryan-Podvin said. “You’re going to be like, ‘Oh, I’m not alone.'”

Considering starting financial therapy? First, it may help to take stock of your financial picture. Here’s how you can better understand your finances before of reaching out to a financial therapist:

Financial Statements and Information

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MINILUXE REPORTS FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2023.

Reported figures in U.S. Dollars

Announces Continued Double-Digit Growth in Revenue and Gross Profit

Toronto, Ontario, May 31, 2023 (GLOBE NEWSWIRE) -- MiniLuxe Holding Corp. (TSXV: MNLX) today announced its financial results for the 13 weeks ended April 2, 2023 (“Q1 2023”). The fiscal year of MiniLuxe is a 52-week reporting cycle ending on the Sunday closest to December 31, which periodically necessitates a fiscal year of 53 weeks. FY2022 consisted of a 53-week period while all other fiscal years referred to in this release consist of 52-week periods. All quarters referred to in this release consist of 13-week periods. Unless otherwise specified, all amounts are reported in U.S. dollars.

MiniLuxe is pleased to announce continued double-digit growth in year-over-year (“YOY”) revenue and YOY gross profit demonstrating resiliency despite a challenging macro-economic backdrop. Q1 2023 revenue increased 18% versus Q1 2022 at $5.2M (all figures in US$ unless otherwise noted). Same-studio revenue hit a record level in Q1 2023, while demonstrating 21% growth on 2019 revenue (pre-COVID comparable) on a like-for-like basis of MiniLuxe on-premises fleet studio units open in 2019 vs those open in 2023. Overall growth of MiniLuxe’s most loyal customer base (those returning at least 20 visits or more per year) grew 37% versus the same period prior year.

Q1 2023 gross profit of $2.2M increased 16% vs. Q1 2022 – the Company views gross profit dollar growth as a key indicator of MiniLuxe’s positive trajectory towards long-term profitability. The MiniLuxe fleet of core studios continued to lead the business, accounting for 94% of revenue in the period, and the Company remains keenly focused on continuing to drive the full potential of the economics of these studios while expanding and scaling its omni-channel offering for the self-care industry.

Key to MiniLuxe’s current and future success is the continued growth, development and scaling of the MiniLuxe Talent Ecosystem of licensed and certified nail designers and waxing specialists. Beauty professionals who are part of MiniLuxe’s Talent Ecosystem are empowered to choose a well-defined career path tied to increasing economic earning power while also having flexibility of where, when, and how they will work. Expanding and growing the size and breadth of MiniLuxe’s Talent Ecosystem and continuing to make investments in the technology platform to serve as the infrastructure-as-a-service and marketplace for these designers are key strategic imperatives for 2023.

MiniLuxe’s Board and Executive Team remain focused on driving the business on its path toward profitability and cash generative operations. The management team continues to execute on the Company’s 2023 priorities and is regularly reassessing capital and resource needs to ensure optimal investment of capital. With receipt of the $3.2 million Employee Retention Credit (related to employee costs paid in 2020 & 2021), MiniLuxe’s Q1 2023 ending cash balance was $8.0 million. This capital, plus the continued growth of the MiniLuxe Talent Ecosystem and Product channels, is forecasted to lead to positive free cashflow generation in 2024 and to position MiniLuxe well to achieve its strategic goals and vision to be the leader in the self-care industry. The Company looks forward to sharing further updates throughout the remainder of the year.

“Against the backdrop of a challenged macro environment with regional bank failures, inflationary pressures and global slowdown of growth, we were fortunate to see continued recessionary resilience of the market in which we serve and demonstrate double-digit growth on topline revenue and gross profit dollars,” said Tony Tjan, Executive Chairman and Co-founder of MiniLuxe.

“MiniLuxe is pleased to report continued double digit growth in Q1 2023 with the core fleet of studios continuing to demonstrate highly predictable levels of contribution as we actively invest in new growth channels to further accelerate the growth of the MiniLuxe omni-channel platform,” said Zoe Krislock, CEO of MiniLuxe  

Q1 2023 Financial Highlights ($USD)

Q1 2023 Business Highlights

Q1 2023 Results

Selected Financial Measures

MiniLuxe notes a change in accounting policy to more accurately reflect revenue generated from talent and product revenue streams to more align with how management analyzes the Company. The change has been retrospectively applied and does not have any effect on revenue recognition principles utilized or total overall revenue recognized.

Results of Operations

The following table outlines the consolidated statements of loss and comprehensive loss for the fiscal quarters ended April 2, 2023, and March 27, 2022:

Cash Flows

The following table presents cash and cash equivalents as at April 2, 2023 and March 27, 2022:

Non-IFRS Measures and Reconciliation of Non-IFRS Measures

This press release references certain non-IFRS measures used by management. These measures are not recognized under International Financial Reporting Standards (“IFRS”), do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. The non-IFRS measures referred to in this press release are “Adjusted EBITDA” and “Fleet Adjusted EBITDA”.

Adjusted EBITDA

Adjusted EBITDA is used by management as a supplemental measure to review and assess operating performance. Management believes Adjusted EBITDA most accurately reflects the commercial reality of the Company's operations on an ongoing basis by adding back non-cash expenses. Additionally, the rent-related adjustments ensure that studio-related expenses align with revenue generated over the corresponding time periods.

Adjusted EBITDA is calculated by adding back fixed asset depreciation, right-of-use asset depreciation under IFRS 16, asset disposal, and share-based compensation expense to IFRS operating income, then deducting straight-line rent expenses2 net of lease abatements. IFRS operating income is revenue less cost of sales (gross profit), additionally adjusted for general and administrative expenses, and depreciation and amortization expense.

The Company also uses Fleet Adjusted EBITDA to evaluate its fleet performance. This metric is calculated in a similar manner, starting with Talent revenue and adjusting for non-fleet Talent revenue and cost of sales, further adjusted by fleet SG&A and finally subtracting the same straight line rent expense used in the full company Adjusted EBITDA (as the fleet holds all real estate leases). The Company believes that this metric most closely mirrors how management views the fleet portion of the business.

The following table reconciles Adjusted EBITDA to net loss for the periods indicated:

The following table reconciles Fleet Adjusted EBITDA to net loss for the periods indicated:

About MiniLuxe

MiniLuxe, a Delaware corporation based in Boston, Massachusetts is a digital-first, socially responsible lifestyle brand and talent empowerment platform and marketplace [let’s consider] for the nail and waxing industry. For over a decade, MiniLuxe has been setting industry standards for health, hygiene, high quality services, and fair labor practices in its efforts to transform the nail care and waxing industry. Underlying MiniLuxe’s mission and purpose is to become one of the largest inclusionary educators and employers of diverse self-care professionals across our omni-channel ecosystem and talent empowerment platform.

Today, MiniLuxe derives its revenue streams from nail care and waxing services across an omni-channel ecosystem of on premises with company-owned studios and partnerships and off-premises on-demand services. The company also develops and sells a proprietary retail and e-commerce line of clean nail care and waxing products that are also used in MiniLuxe services. MiniLuxe is driven by a fully integrated digital platform that manages all client bookings, preferences, and payments and provides designers with the ability to manage scheduling and client preferences, track their performance and compensation, and access training content. Since its inception, MiniLuxe has performed nearly 3 million services. www.miniluxe.com

For further information

Anthony Tjan

Executive Chairman, MiniLuxe Holding Corp.

atjan@miniluxe.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

1Please refer to “Non-IFRS Measures and Reconciliation of Non-IFRS Measures” sections of this press release.

2Straight-line rent expense for a given payment period is calculated by dividing the sum of all payments over the life of the lease (the figure used in the present value calculation of the right-of-use asset) by the number of payment periods (typically months). This number is then annualized by adding the rent expenses calculated for the payment periods that comprise each fiscal year. For leases signed mid-year, the total straight-line rent expense calculation applies the new lease terms only to the payment periods after the signing of the new lease.