Developing a Healthy Relationship With Money
What's your earliest memory about money?
For me, it's the anxiety I felt as a boy, sitting in my father's apartment, waiting for his unemployment check to hit our mailbox. He suffered at times from anxiety and depression, which wasn't understood very well back then, so steady work was always a challenge for him. I remember buying him lunch at a malt shop once I started working -- not because I was trying to show how grown up I was, but because we really needed the five dollars.
Those formative experiences drove me to a career that taught me how to take care of my own finances and help other people do the same. After nearly 30 years in financial services, I'm positive that there's a real connection between money memories, good financial habits, and mental health that influences our relationships, our emotions, our careers, and our progress towards a safe and secure retirement.
To help me explore these important intersections, I'm thrilled to welcome Dr. Megan McCoy to today's episode. Dr. McCoy is a licensed Marriage and Family Therapist and a Certified Financial Therapist-I. At Kansas State University, she's a Professor of Practice and Director of the Financial Planning Masters Program and key faculty in the Financial Therapy Certificate Program. Dr. McCoy is also an Executive Board member for the Financial Therapy Association and the Associate Editor of the Journal of Financial Therapy.
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Escaping the "vicious cycle."
Our emotions and our money can be so intertwined that it can be challenging to address what's really keeping us from living our best lives. Money problems could be making us feel anxious or depressed when the bills start rolling in at the end of the month; market volatility and inflationary concerns could be causing anxiety that makes us worry about our money.
"A friend of mine equates it to a 'vicious cycle,'" says Dr. McCoy. "What we know is nearly half of the people with debt out there now have a mental health diagnosis. We don't know which one came first. And we also know that almost all the people with mental health and debt issues say their debt is making their mental health worse. So those with depression are not going to get out of their financial struggles unless their mental health and their financial health are taken care of together."
"Money doesn't buy happiness."
Now, I'm a financial advisor, not a therapist, and my team and I know how to stay in our lane. But over the years I’ve found that talking through some misconceptions about money and happiness can help folks start to feel less anxious around their money and discover the real value that a financial plan can provide.
"Money doesn't buy happiness," says Dr. McCoy, "but it buys the opportunity for happiness. If our basic needs are not getting met, that stress is just going to erode our wellbeing. But once we get those basic needs met, we need to understand that having money is not necessarily going to make us happier. We need to figure out how to line up our financial behaviors to our values, to helping others, to making our wellbeing better, to finding time to spend with the people you love. Those are the ways that money buys happiness, not being Scrooge McDuck with all those coins in your vault."
Of course, most folks know that already. But really internalizing this idea and living it is easier said than done. When we're working, we're very focused on maintaining a good lifestyle for our families while building our nest eggs. Once retirement rolls around, it can be very hard for some seniors to switch off that "saving" mindset and start enjoying their assets. I've worked with many people over the years who look up in their 70s or 80s, see more money than they know how to spend in their accounts and feel like life has passed them by. They've spent decades living with unnecessary stress around money, waiting for "the right time" to exhale and have some fun. Or, worse, they spent too much time and energy trying to "keep up with the Joneses" rather than enjoying what they had.
"Financial anxiety often hits those who have plenty of money in the bank," says Dr. McCoy, "but they have the sense of, 'I don't have enough.' Overspending and underspending are both unhealthy. What we want to find is that balance in between."
"Money is so taboo."
Perhaps the biggest challenge when it comes to unpacking these complicated issues is that, as Dr. McCoy notes, money is a very taboo subject. That's doubly true right now when so many people are struggling to pay their bills and worried about the state of our world.
I think one of the most important services that we provide at Keen Wealth is giving people a comfortable, nonjudgmental environment where they can talk about their money memories, their concerns, their differences with their spouses, and their long-term goals. Again, we don't presume to have Dr. McCoy's expertise when it comes to mental health. But we are experienced in facilitating conversations that can help you put your emotions and your financial decision making in their proper contexts.
"What are your earliest money memories?" asks Dr. McCoy. "How did your parents handle money? What do you want to leave behind? Financial advisors asking these questions allows people to start thinking about money and talking about money out loud for the first time."
I hope you'll listen to this full episode, as Dr. McCoy also shares some exercises you might try to help you get more specific on your feelings around money. And if reflecting on these issues raises some questions about your financial planning, call up my team at Keen Wealth and let’s schedule a conversation.
About Bill
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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