Tuesday, July 22, 2014

The Funnel of Trouble - Stealing Financial Peace


Our thoughts consume us. How we understand the world impacts the decisions we make in subtle and not-so-subtle ways. Yet, when we have a framework for understanding the many factors that influence the way that we make decisions, we can start to set our selves free from the burdens of limiting and inaccurate thinking.

As this relates to our finances, making true progress in the name of our goals is often cumbersome, frustrating and fraught with ambiguous decisions.  Fear further slows down the process. As we contend with our own thoughts, we also contend directly with our spouse’s thought life.

Every couple struggles to varying degrees to communicate about money. This ultimately happens because of what I call the “funnel of trouble.” In the funnel of trouble, there are seven layers in which ideas rapidly and often unknowingly pass through our minds before a financial decision is made. The same is happening for your spouse, and by the time the same idea passes through the respective funnel, you likely come out with very different answers.





Let’s take the idea of financial security, for example, and pass it through the funnel of trouble. Financial security first meets with your understanding of how the world works and what it means to be a global citizen. Next, it reaches the national level. Here, you likely have more distinct ideas about how things work and why things are either going to work out or not work out for financial security (i.e., politicians are ruining everything, the economy is not what it used to be, etc.). 

After that comes the mid-section of the funnel, where financial security is subject to your experience of living in a particular region. Let's say you call the Rust Belt home. Do things look bright or bleak? From your regional perspective, financial security moves into your local community, and now you are getting a real face-to-face familiarity of what’s going on. You live and see activity in your community daily. You drive down the streets with store fronts full of vibrant commerce or littered with “for lease” signs. You know if the city parks are kept up or run down. We have moved from indirect knowledge of what is happening at a global, national, and regional level to a more personal observation at the community level. 

The first four levels of thinking are influenced by people you don’t know intimately. The last three levels, I believe, are the most influential and put lasting effects on your financial thinking: your family, your spouse, and lastly, you. Your family most certainly has beliefs and attitudes about money that will influence you, have influenced you and will have residual influence on whatever financial ideas flow through your funnel. Even closer and more intimate than your family of origin is your spouse. Your spouse has their own funnel that influences the way they make decisions about money and thus directly influences you. Lastly, there is you and all of your life's accumulated experiences that cause you to respond to incoming financial information in a particular way. Ultimately, your responses are a conglomeration of the previous six layers, and what passes out the bottom of the funnel is what you uniquely and distinctly think about financial security, as the example may be.

So, what are you supposed to do with this new-found understanding? Take time to slow down and think about how each level of the funnel is influencing the financial decisions you are making. How do you feel limited by each level? Understanding each of these layers directly affects your spending choices,  whether you realize it or not. 


Feel free to give me a call to talk more at 980-275-1627.

Ed Coambs


Edited by Reena Arora of Arora Media, connect on Facebook
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