Your Greatest Financial Risk Is Not What You Think?

Risk is everywhere. 

The potential for loss and its negative financial impact has allowed for the vast and complex world of the insurance industry to develop and thrive. As adults, we learn through many different lessons that we should fear economic loss, and that the best way to manage that risk is to make sure we have the proper insurances in place.

Often, our first introduction to insurance happens after getting a drivers license. Then, when we complete college and get our first job, we start to sort through health insurance. Life then continues on, and at some point, we start the process of building our family. We get married, buy a home and have children, which bring on another host of insurance policies to purchase: life, home owners’ and disability. 

Stay with me, I know talking about insurance and risk management is about as much fun as getting a root canal, but I promise I have a point.  

Now that your family is growing, you start to think about college savings and retirement planning, and you realize that you not only need insurance, but you also need to be setting aside money for the future. So, you and your wife start to faithfully put money into your companies’ 401K plans.  You are no longer the kid learning to drive and hearing about insurance for the first time; you have a complex life with many different financial responsibilities.

Then one day, it happens: the financial risk you did not plan for, nor can you insure against or save enough money to prevent: divorce.  

This news rocks your emotional, spiritual and financial life. Everything changes. All the hard work of building, creating and maintaining financial security evaporates, and  myriad of questions about your financial security open up. 

What can you do? We don't get married for financial support, do we? We (hopefully) get married because we love someone. Yet, over time, we come to trust our partner, and there is a financial element to the relationship. This is the very reason why we buy life insurance; we don't want to leave our spouse with an unreasonable financial burden in the event of our untimely death. 

Creating marital stability and security at times can seem overwhelming, frustrating and exhausting, but the effort is far worth it. While financial security should not be the determining factor in making a decision to stay married or get divorced, it is important to get help in really understanding the full cost of divorce from an emotional, spiritual and financial perspective.  

There is hope for restoration in marriage, even in the darkest of days. Consider working with a trained marriage and family therapist to help keep your marriage on the right track. 

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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Money: Nothing But a Number or Nothing But Emotions

To say that my wife and I respond to and see numbers differently would be an understatement. Okay, okay - I know there isn't a couple who hasn't had an argument about  finances in their marriage. But how many couples feel like they understand why they get into so many of the same arguments?

Recently, I shared with my wife just before she walked out the door for work that we needed a certain amount of money to cover some upcoming bills. When she got home that evening, she told me that she worried all day about it. I was surprised, because I thought what I shared was objective, but in reality, it was interpreted as us not having enough to pay our bills – which wasn’t the case at all.

But wait - numbers are objective, right? I mean, what do you think when you read the word “two?” The number, I would imagine. But what happens when I add more context and write “$2?” Suddenly, the meaning changes.

Numbers in and of themselves are objective pieces of data, but what they represent can be very emotional. That is why you can have two people look at the same budget, financial goal or investment and feel very different about it.

Bottom line: it is important to take time to slow down and understand what the numbers represent to your spouse and how they are interpreting them.

Sure, it would be nice if we all saw the situation objectively, but that’s not always the case. For example, if I typed “$1,000,” what would you think? Now, what if I added that that’s what I brought in for the week?

Talking about money from an emotional perspective can be both exciting and refreshing when we keep a few simple tips in mind.

1. Time it - If you regularly get into fights about a household finance topic, set aside a specific time to address it.

2. Explore it – Ask your significant other, “What does this information mean to you? How does this information impact you?”

3. Define it - Create shared definitions of what it means to budget, invest, save, to have money, to not have money, and any other terms where you typically got stuck.

4. Delve into your family history - Learn about how money was used in your spouse’s family of origin. Ask how their mom or dad viewed and talked about finances.

5. Exercise patience and persistence - Remember that talking about money  can be hard, and you will not always agree. Be willing to stick it out and learn more about your spouse.

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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Don't Shoot The Messenger

Making good financial decisions can be hard work. Most of us arrive in the adult world never having taken one class on personal finance. Sure, you saw your mom use her credit card at the department store and your dad go off to work every day. But what did you really learn about how to effectively manage personal finances?

Family life can be very demanding, and the basics of living often don't get covered in daily conversations. Heck, many of our parents never learned how to manage their personal finances, so can we fault them for not teaching us how to do the same?

Our families are the messengers of life lessons. We grow up watching our parents’ every move. We are students of what they do and don't do. We notice the small things, like when Mom says she’s a saver, but never seems to have money for the really big things. Or when dad gruffly reflects, "Another day, another dollar.” These messages  teach us to view money in a certain way. The family language of money often has to be decoded, and we must examine the money messages our parents give us. Unless we tackle our financial uncertainties, we can be left feeling stuck, frustrated and scared about managing the financial resources we have.

Yet, in rare cases, there are those who feel financially secure. Yep, I said it: there are people out there who feel totally, unconditionally, 100% financially secure… but they are not who you think they are. They are not always the richest people in town - they are the people who have a good sense for what money can and cannot do for them in their life. 

How did these people get to a place of financial security? It was not magic, I can assure you. They took the time to look at what they learned from their family, determined what was helpful, then intentionally integrated that into their way of living. They also determined what negative views of money they had and let go of them. The financially secure identified the gaps in their knowledge of how to manage money, and then took time (and continue) to learn how to better manage the resources they have. Common learning experiences include reading books, attending classes and finding trustworthy advisors to help teach them how to manage money and expectations well. 

IMPORTANT LESSON: While learning to save, budget, and invest is important, the number one tip to financial security is to learn how to manage your expectations. It is the gap between where we are and where we expect we should be at any stage in life that is most likely to make us feel financially insecure. 

Don't get upset with your parents because you did not teach you everything you need to know about money. Don't have an attitude with your wife because you are not on the same page about money. Chances are your spouse didn't get all the right money messages, either. There is a significant possibility that you and your wife share some financial views. Likewise, there is a strong possibility that you will also think differently on certain topics.

To address the similarities and differences in money management approaches in your marriage, take time with your spouse to list out where you are on the same page and where you are different. When you identify those differences, realize that neither of you may be right, and that there may be other options for managing that situation then what you have considered. This is where learning about personal finance together can introduce new ideas to your family. If you don't take the time to study personal finance, then all you will have to base your decisions on are the lessons from your own family, which won’t always serve you well.

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

For all your communication needs, she is all you need.

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