Life Transitions and the Brain

Journal of Financial Planning: April 2012


Eileen Gallo, Ph.D., is a psychotherapist in private practice in Los Angeles, California, where she works with individuals and families dealing with issues related to money. Along with her husband, Jon Gallo, she is the co-author of two books on children and money. Their website is

As a practicing psychotherapist specializing in the psychology of money, I was intrigued when the Journal decided to begin a Life Planning column this year. I was even more intrigued when I read the Lewis Walker article in the February issue that inaugurated the Life Planning column. As he so correctly points out, readers of the Journal typically have solid technology and offer good products and services. What allows advisers to stand apart from the competition is recognition that money issues are frequently a function of the life transitions clients are confronting and are best addressed in that context.

In a 1967 study of the connection between stress and illness, psychiatrists Thomas Holmes and Richard Rahe developed a list of the 43 most stressful events in a person’s life. The list was updated in the 1990s to 87 events.1 Most of these events involve life transitions, ranging from marriage and the birth of children to changing jobs, retirement, and the death of family members. Several of the most stressful life events—divorce, loss of a job, retirement, business readjustment, change in financial state, changing jobs, and a large mortgage or loan—are directly related to life transitions involving one’s financial situation.

Assisting clients experiencing the stress of major life transitions requires an understanding of the basic structure of the brain. Our brains are divided vertically into two hemispheres that are anatomically different and that have different functions. The right side of the brain is holistic and nonverbal; it is the seat of emotions and personal memories. The left side of the brain is verbal and logical; it tries to make sense out of what is going on.

The Right Brain

People faced with major life transitions sometimes need help integrating the messages these two hemispheres are sending to avoid becoming either too rigid or overly emotional. An example of the role of the right brain’s emotional needs in a financial context that I often encounter in my practice is the couple whose child is going away to college. They are often divided over the question of whether their child should have “skin in the game” by working part time during the school year. One parent might believe that the child’s job is going to school, and nothing should interfere. The other takes the position that the educational experience will be more meaningful if the child contributes economically.

A child leaving home rates 40th out of 87 stress events in a person’s life.2 The parents are being confronted by an event likely to produce strong emotions irrespective of whether they can afford today’s college tuition without economic hardships, such as deferring retirement or even borrowing against their home. Although recent studies provide new insights into the pros and cons of work-study programs, these insights are irrelevant if we do not first address the right-brain emotional issues.

Financial advice is directed at the left hemisphere: it is linear, approaching the problem in logical, sequential order. When your client is facing a life transition, logical advice by itself may not be enough. In such a situation, the adviser must first connect with the client’s right brain before directing information to the left brain. You connect to your client’s right brain by acknowledging his or her basic human need to feel understood. This is accomplished by being genuinely interested in client concerns and what clients are thinking and feeling. Be curious, ask open-ended questions: What are your hopes? Do you have concerns? By having clients relate their thoughts and feelings, you are helping them connect their right and left hemispheres, which can then process logical, linear advice.

The Left Brain

Paul Zeleza, dean of the liberal arts college at Loyola Marymount University in Los Angeles, recently called my attention to two papers that offer significant left-brain information. The first paper reported the results of a study3 of more than 560,000 college students at 473 four-year colleges that sought to determine if there were significant differences in the grades of students who: (1) did not work, (2) worked 20 hours or fewer on campus, (3) worked 20 hours or fewer off campus, or (4) worked more than 20 hours on or off campus. The grades of students who worked 20 hours or fewer, whether on or off campus, were not significantly different from the grades of students who did not work. What was unexpected, however, was that the study indicated that where students worked 20 hours or fewer was an important factor in the indirect relationships between work and grades.

The study used the term indirect relationships to refer to five factors that have been shown as linked to positive educational outcomes: (1) activities that demonstrate that the college emphasizes the importance of academic effort and sets high expectations for student performance, particularly in the areas of writing and higher-order thinking; (2) the extent to which students are required to think about and apply what they are learning and to work with others to solve problems and master difficult material; (3) how often students interact with faculty members inside and outside the classroom; (4) a wide range of educationally purposeful learning activities, including experiences with diversity and technology; and (5) student perceptions of the college’s commitment to student success and the quality of students’ interactions with peers, faculty, and administration.

Working 20 hours or fewer on campus was positively related to all five factors. Working 20 hours or fewer off campus was positively related to only two of the factors: student-faculty interaction and the extent to which students are required to think about and apply what they are learning and to work with others. This study suggests that there are significant benefits for students who work not more than 20 hours a week on campus.

The second study4 of 3,081 full-time students at 19 colleges suggests that all is not bleak for the student who must work more than 20 hours a week off campus. The researchers looked at the effect of working during the school year on three “good practices” linked to personal and intellectual growth during college: (1) good teaching and high-quality interaction with faculty, (2) diversity experiences, and (3) influential interactions with peers. The study found that, as the number of hours of either on-or off-campus work increased, the statistically significant effects on “good practices” tended to become positive. Working on and off campus 10 or more hours per week had a positive impact on the students’ attitude toward literacy and socially responsible leadership. Even more surprising, working off campus more than 20 hours per week increased both the students’ psychological well-being and leadership ability.

A consistent factor in all of the outcomes was the level of the student’s tested academic preparation (ACT, SAT, or COMPASS scores) when he or she began college. In such areas as critical thinking, moral reasoning, and openness to diversity/challenge, the potentially negative effects of increasing the number of work hours became largely irrelevant for students above the mean in precollege academic preparation. In fact, for students above the mean, working between 1–10 hours a week on campus actually had a significant positive effect on critical thinking. It would appear that parents of teens approaching college age should be less concerned about the possibility that their children participate in work-study programs and more concerned with adequately preparing them for the academic aspects of the college experience.


Lewis Walker ended his introductory column on life planning with the reminder: “It all starts with a conversation.” Let me say Amen to his comment, and add that the conversation with clients experiencing a life transition often needs to start by addressing the right-brain, emotional issues before you offer left-brain, logical advice.


  1. Miller, M. A., and R. H. Rahe. 1997. “Life Changes Scaling for the 1990s.” Journal of Psychosomatic Research 43, 3: 279–292.
  2. Ibid.
  3. The study is the National Study of Student Engagement, which examines two critical features of collegiate quality. The first is the amount of time and effort students put into their studies and other educationally purposeful activities. The second is how the institution deploys its resources and organizes the curriculum and other learning opportunities to get students to participate in activities that decades of research studies show are linked to student learning.
  4. Salisbury, Mark H., Ryan D. Padgett, and Ernest T. Pascarella. 2009. “The Effects of Work on the Educational Experiences and Liberal Arts Outcomes of First Year College Students.” University of Iowa.

Want to discuss these issues with colleagues or pose questions to the author?  Visit the life planning community at FPA Connect to take part in the conversation.

General Financial Planning Principles