Disagreements involving financial issues are a problem for many couples. Even in normal times, these issues are difficult to resolve. Today with layoffs, pay cuts, and general financial uncertainty finding common ground and an agreeable way to handle personal finances has become more challenging. Joining me to discuss the skills for achieving real financial teamwork that can lead to better joint decisions about your money is Megan McCoy, Ph.D., professor of Financial Therapy at Kansas State University. We focus on the importance of understanding the benefits of a holistic approach to finances and ways you can reach financial harmony.
Program Length: 19 minutes
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Welcome to the Your Life, Your Wealth network, helping you find clarity and comfort for your life.
Well, now here’s your host. Financial adviser and CEO of Cordasco Financial Network, Steve Cordasco.
Welcome to the Your Life Your Wealth podcast. Joining me today is Megan McCoy.
She’s a professor at Kansas State University. And Megan is a fireball who wants to bring attention to the world of money talk and the discussion of money through sun, also therapy.
And she’s here today to tell you more about the subject of money therapy. Hopefully, we’ll get some tools and tips to help those in need. Megan, welcome to the Your Life Your Wealth podcast.
Hi. Thank you so much for having me.
So glad you’re able to join us in our program of ties here to Philadelphia. That’s on your training towards your day at Drexel University right here in our backyard. Welcome back to the Philadelphia region again, at least through through teleconference. You’re an advocate for financial teamwork and a believer that financial teamwork can help achieve success. A company that I’m with, Cordasco Financial Network, we’re big believers that it takes a team to achieve financial success. We even have a multi advisor approach, which is unique compared to other registered financial advisory firms. Can you tell us more about the skill of financial teamwork? What skill set that takes and why? Financial teamwork is something you showcase as important.
So I work a lot with couples and what my research has found is that qualitatively many fights are just different than other kinds of fight. There’s a great researcher named Jeffrey Do who discovers that money has all these different meanings for us. And so when couples start talking about money, sometimes they’re talking about two different things that they can’t work on a unicycle. And so I love using multiple resources, multiple professions to really aid in giving couples skills to talk about money so that they can get past all those obstacles and roadblocks and really not only reach financial well-being, but overall well-being.
Now, why? Why don’t more take that approach? The name of my company is Cordasco Financial Network. That network is so that we can help someone when it comes to where their money meets their life. We can reach deep to other professionals. And even among our own team, we have specialists and individuals that have kind of unique talents and removing one or two or three aspects of the many aspects that come into financial planning, financial well-being. But it still seems that when it comes to working with someone on your finances, your money society is still in this silo place where there’s one person who wants to be your broker when it comes to stocks or if an insurance person when it comes to your insurance or tax person when it comes to taxes. But it doesn’t seem that that formula is the key to really have the higher probability of success when it comes to the world of navigating money where it touches people’s lives.
I think there’s so many reasons. I think we tend to think of money as something like there’s a right and wrong answer. We just need to get a formula or get a spreadsheet and everything will be perfect. Like when I was talking to Morningstar about an app they’re creating. We were talking to a couple about how much you want to spend in the house. And they were having an argument about and we talked about it for a while. And then someone on the team who was I.T. person said, well, why don’t you just tell them the right amount of money that they should spend right around amount of money, depending on millions of variables, as well as like your internal sense of financial stress and and what you want and what you privilege in life. And so I think we tend to think of we just need to get the right answer when really the right answer looks unique to every single one of our clients. And it’s only through addressing them holistically into the care of their and their whole financial needs and as well as their couple needs and their future desires that we can really address their financial well-being. No spreadsheet or formula is going to give you that book.
And it’s so non black or white. And that’s what thirty 35 years of me trying to help navigate people. That’s the beauty of helping someone with their finances in less than really intimately know the individuals and what they want from life. Money connects to life, but it’s not A plus B equals C. It’s not so black and white. You use the word holistic and that’s been around for a little bit. But I still find people kind of scratch their head. What does that mean?
I think holistic is the. Hear that? People call it like like plaiting or Lenny. And there’s all these terms to say we can’t just look at just your taxes. If your taxes are going to impact your impact, your estate planning, it’s going to impact your saving plan. It’s going to impact all these other vehicles of your life. And then all of those aspects are based on your values, your needs versus your wants, your future goals and what are you working towards. And so holistic to me is taking care of how Clinton has been called the internal and external aspects about money. We need a spending plan in place. We need tax plan in place. But we also need to know what are your future goals, your money? What will make you feel safe with your money? How much risk can you take on how much stress will you be under if you take on this risk? All those things. And so I love how he talks about internal and external side of money. And I think that’s a great way of thinking in a holistic care of the person.
You know, you’re doing God’s work because you are training the next generation of those who will take over for me and you’re training them in something called a financial therapy certification. And you can maybe clarify that for me. But my question is this for our audience. Can you share with us what financial therapy is and what you’re actually teaching and what the end result will actually look like at Kansas State?
We teach financial therapy as something you do. And what we see, financial therapy is kind of like counseling, like skills. Like there was this whole series of articles by Jim Bosky incest, and where they found something like 75 percent of financial planners had clients crying in their room, telling them secrets. Asking them if they should get divorced.
And so what we realized is that, by the way, I don’t mean to interrupt, but that’s my office. There’s a lot of twosomes that you used. And it’s everything from, you know, could there be at a divorce to a loved one that might have an addiction issue or just somebody who retires and never realized it was gonna be so lonely, especially on the men’s side of things, because they’re not so emotional and they don’t talk about their feelings, but they feel lost sometimes afterwards.
So I get what you’re saying.
Kansas State is just trying to give counseling like skills to financial planners. They don’t want them to be therapist, though. We want them to learn how to ask the right questions, how to how to navigate couples dynamics so that you’re working on the entire couple, just not the partner who speaks up the most, how to apply. What do we know from the research in family therapy and psychology and counseling that can be adapted to your work as a financial planner? There’s also the Financial Therapy Association, which is taking financial therapy even further, and they’re working towards creating a separate professional certification therapist that are truly cross-trained. But at Kansas State, we teach financial therapy something you do inside your home, discipline that word therapy is a fear.
We’re out. And I found that in my practice. And you can come up with the word coach or you can come up with something different or do you not even label this and you make it a practice. That word is so scary to some that they would rather have financial chaos. About fifteen years ago, somebody challenged me to the success of my business. Why was their success? I started asking people I work with. And they came up with. You talk to us a certain way. And as I dug into that, I realized we weren’t talking so much about numbers. We weren’t so much talking about lines on a tax return were percentages. We were talking about the life side. And that’s I learned more about this. I’ve learned that there’s this thing out there of getting people to open up. And I guess technically that’s therapy. Here’s my problem right now. We’ve dropped the word coaching and therapy. Now let’s just make it part of the practice. It’s the way we act and engage. I’m at the point where I separate. If it’s a husband and wife, if it’s two individuals looking to join together, maybe there’s they’re thinking about getting married, maybe currently married. I’d like to talk to them independently, almost separate, because we can’t seem to get that full, deep openness because one person wants to wait to the other person answers a question or response to something nobody nobody’s practicing. And it’s so odd that people look at this and say, well, wait a minute, how come you want to talk to my spouse and not me? I’m the person who handles the stocks and bonds. It’s their money, too. Can we start to build an open relationship? But why is that so hard, especially for baby boomers today? And why are we doing it wrong?
Well, I don’t think you’re necessarily doing it wrong. If you use those separate sessions to give the person who doesn’t have the low esteem. Yeah. Right. That doesn’t the boy. Have a voice in front of their partner. So I think eventually, if you do separately, to get them to be honest and to create that that trust and bond you need with both partners. And then bring them together with the skills to be assertive. That’s something we learn in couples where it’s not couples that fight that you that is the couples that avoid conflict that you really bad. Because through conflict, through a being assertive, you’re able to tell your wishes to your partner and they’re able to respond to your wishes. So I think if you’re able to bring them back with you skills to feel confident, to say their wishes. That’s the goal, is to get them more open with one another. Otherwise, they may become that you are too much in between.
And it takes training and it takes the ability. But it’s not so much going in by design. I like it when a lot of things just happen organically and it just evolves. I’m not here to say that somebody is intimidated by spells or some cases like that. But the rare you kind of see it and I look for it in the communication of the initial engagement, or if I’m working on problem solving or dealing with a pain point that somebody might have as a client. I try to read the room a little bit. I try to read the relationship. And there’s many relationships. We have work. There is a husband, wife and there on the phone together or they’re in together. And one person leads and the other one tends to not their head and they look like they’re on the same page. Can we talk a little bit about how you coach or teach? Is you’re hoping those get that certification? How much does demographics play in? Because I find it I’m dealing with the children of my clients who tend to be baby boomers. They have a total different relationship around money. If they’re married, they tend to be very open, a very even at least the bulk of what I’m seeing. But yet, if I’m dealing with baby boomers, it tends to be more lopsided. There tends to be more of one individual that wants to talk about the money. And there’s another person who kind of leaves it up to them. Not as much. How do I put I don’t wanna say togetherness because there is togetherness, but the priority of money is different.
One of the things I think of thinking of when you’re talking is that, you know, we talk about opposites attract. But the research shows that that’s actually true, that we tend to marry people who are very similar to us except for when it comes to money. That’s where you’ll see the dynamics of people being attracted to their opposite. The saver falls in love with the spender or the money avoidance falls in love with the person who’s vigilant. And so I think sometimes it’s difficult to branch out because there’s so many reasons why they move. They might not be working as a team, potentially. One partner feels insecure about their ability to talk about money, like they feel like they don’t know enough to talk or potentially the example you gave. They don’t feel like they contributed enough, even though they did in a different way, that they don’t think the power to talk about it. Oh, it might be that they just don’t like talking about money and just want to avoid it. For that reason, they’re glad that their partner takes the lead. And so I think figuring out the why the dynamics are and is really essential, because even though the presentation is going to look the same, I think there’s a couple of different reasons why they’re presenting that way.
There’s something called a DIY that’s a do it yourself investor. And so for do it yourself, investors tend to get them later in life where they’ll come to me, especially in times like this with health things going on. People have health concerns, but it’s gone. What’s happening in the world and they’re worried about their loved ones and their loved ones not being prepared if they should pass away because they’ve been the one doing it all the time. And so we get later in life individuals who have faced either a health crisis or now are seeing a health crisis around them, starting to not feel as comfortable and confident about what happens to their wealth when their life is no longer part of it and their other loved ones are going to be part of it. So we’re in the challenge now of trying to take someone who never used an adviser. But you needs an adviser because they don’t have confidence to those around them being able to do what they did. How do you work with that? What advice can you give in that area?
I think a big one. It is empowering the people they feel are capable. I think that’s a really big thing because it sounds like their goal is to keep the 100 cent control of their finances are trained for that, control the finances from them to you confident them to their partner. And so I think it’s you know, when we talk about over under functioning partners, we have to do both things. The overfunctioning around them. Money needs to trust their partner. It’s capable. It needs to believe in them, needs to know that they’re giving. You’re going to help give them the skills to be capable while the under functional needs to get empowered and. Believe in themselves and see this as something important as well. And so I think addressing both partners, if it is husband, wife or diet like that or if it’s a parent child, again, doing that, because even though it’s a loving thing to take care of everything, that overly taking care of signals in a person that you don’t believe in them, that you don’t think they’re competent and even those are loving action, teaching them that, like you’re accidentally saying to your partner or to your child that you don’t believe that they’re competent.
And here’s what’s interesting. Even Brautigam down to the children. So let’s say somebody is in their 70s. Maybe they’re using the N-word or some kids. You know, something could happen to me. I just lost a friend.
I never thought that my life would change like this. Were there watching the news and assume all that’s going on. We really tried to bridge that gap with their children. But yet so many advisers avoid the children because their children tend to be tech savvy. Kind of crazy to, like, go in. But to me, I really like embracing kids. But that’s where that teamwork comes in, because we’re all a team. It’s not like we’re jumping in here. We’re going to control mom and dad’s money here. And and we’ll bring you in later. You know, one of those things that are really scary for it, do it yourself personally in Lisbon at Vanguard Fidelity to doing most of their stuff their whole lifetime. And pulling in the team can be a scary thing for many advisors. They just tend to focus on one. And so that whole teamwork thing is so important. So I get I get what you’re saying there. Hey, what tips can you give for those that don’t open up so easily about this topic? Those listening to us right now and scratch your head and say, you know what, I really as open as we should be and even for those who are listening to us, might not work with a financial adviser. There’s things out there I know you’ve been developing things like tools and apps that can actually get people’s started down this path of being more open and fair in the relationships they have and where their relationships in their life touch their money. Right.
I think what’s interesting is that many truly is the last Habu like I know as that was the therapist, we talked about sex and religion and all these other taboos so easily. But money was still hard for us. And I think that’s so important to recognize that money conversations are difficult to navigate. And being compassionate to yourself and your partner, that you’re going to say the wrong thing by saying something is better than not saying anything at all like you can’t do wrong. If you take an open mind, come in there with a not knowing stance and really want to share this information in a kind way and that you’re getting skills to your partner, your children by having these ofri conversations. And so I think the biggest things I want to say is normalize that it’s difficult and emphasize how much of a gift you’re getting by entering into these conversations.
Really, really appreciate the work you’re doing and helping those financial advisers and those that work in the world of money, getting them prepared, because I do believe, at least for my children coming up, I’m hoping my industry looks a lot like what you’re teaching. And that is it’s not just about the numbers. It’s about you, what you want out of life, where you find your happiness and where your money needs that life that you want to live and love back.
I left that. I hope all your listeners go and talk to their partners and their kids today about money.
Thanks for taking time away from the kids and your husband and joining us. Thanks again.
Thanks for having me. Have a good one.
You’re listening to the Your Life Your Wealth podcast. I’m Steve Cordasco. If you think you need an open and honest conversation with family members, maybe your children, you, your spouse, be more than happy to reach out. Every day I talk to different people. And that’s the fun part of my job. If I can help make a breakthrough and our team can help you break through when it comes to your wealth and work touches your life.
We’re here for you. Look to be able to have that conversation. Have a great day. Thanks for being part of your life, your wealth podcast.
If you’re interested in learning more about applying the principles we discussed to your personal financial circumstances, please visit Cordasco Financial Network at CNN Plan dot com or call our office at two one five five five eight. Thirty five hundred. We hope you’ll join us again next time on the Your Life Your Wealth network.