We Get Along Financially, Except

When I tell people that I am a marriage counselor that specializes in working with couples and their money, I usually get one of two responses. The first is diving straight into the details of their marriage and financial lives and some specific event that happened to them.

The other is a more cautious response. It goes something like, “We are really fortunate. We get along well on that page.” Then there’s a positive explanation about how good things are. As I listen for a bit, I acknowledge and say that is wonderful.

Recently I was talking with a doctor who thought my work was really interesting, and he said he and his wife get along well in that department. He went on to say “We are blessed”. To which I responded great not expecting much after that. Then came the exception, he said my wife thinks I have too much insurance. I think oh, is that so? Now this was a social setting so I did not get into the details, but this is one of many examples of what I hear once someone feels safe enough to share with me about their life. The reality is that we all have financial sticking points in our marriages. So the question becomes, are these sticking points driving a wedge into your relationship with your spouse? Is it affecting your ability to enjoy each other’s company?

Most couples can navigate a few minor disagreements, but stack a few together and the stress increases. The reality is that there is often both an emotional cost and a financial cost when it comes to financial differences.

In the case of the insurance for this spouse, it was a common source of tension. Even if for this doctor he is spending $200 a month in extra premium for insurance that is not necessary—that adds up to $2,400 a year. Peace of mind just became more expensive for this couple. But the bigger question becomes why is this insurable risk so important to the person?

Without knowing the details, we could assume that it was a disability policy that the doctor has. But the policy might not be technically necessary for a number of reasons. Beneath the surface the of that decision the doctor's father became disabled at a young age, and that memory lays in the back of his brain about the need for disability insurance. Perhaps this is not a connection that he has made, but it then becomes a clear explanation about his desire to have more disability insurance than would normally be reasonable. Further yet, the disability was caused by a motorcycle accident. The doctor does not even own a motorcycle and won't ride one. So does he really need this disability policy? Perhaps not. Hopefully this demonstrates that insurance policies can become about meeting more of an emotional need than a financial need. Yet if we remain overly-insured based on subjective needs, then we may be cutting off cash flow that could be used to allocate towards other important goals for the family.

What Is Your Financial Story?

The power of narrative is often missed and misunderstood in the process of financial planning.

We all have an untold financial story that is working in the background of our lives. Bringing light to this story helps us to find our way forward.

I don't know when the first story was told, but I know that it was thousands of years ago. For as long as we can go back, stories have carried the power to pass along values of the family, community and broader culture. Modern day Hollywood has figured out how to tell the best stories, and they make huge money telling stories. They’ve become so adapt at telling stories, that I wonder if we have lost the ability to tell our own stories—the stories of our families, and the challenges and triumphs that they’ve overcome and yet to overcome.

Stories, when told by the people who have lived them, do not miss the little details of family history and the meaning associated with different events. Stories are often how we learn best, as there are strong emotions associated with stories, which tie into the facts and figures of our lives. Stories take us on a journey and carry us through to the next generation. Yet as I meet with people to talk with them about their finances, I am surprised to learn how little they know of their own story, that is, their family story—how they came to be, what values they stood for, and what direction the family is headed. Sure they can tell me a few details, the highlights, but the deep knowledge of family story is not there.

Yet more often than not, it’s the deep family story that continues to carry forward strong convictions and beliefs about how the world works and should work. People with all levels of educational achievement will often refer back to something their mother or father did, and how that has shaped the way they do something now. While they may gain new knowledge that advances the direction of the family, there is still a pull by the family back into what they’ve been told.

So as you face looking at your finances, what is your story? Here are 10 questions to help you start to open up and look at your own family’s story of money.

1. What financial successes did your family have?

2. Who made the money (did one member make much more that than the other)?

3. When where you left wanting for something but could not have it?

4. Who controlled the money and why?

5. Who spent the money and why?

6. What arguments over money existed?

7. How does your spouse view money?

8. How do you view money?

9. What did your family say about rich, middle class, and poor people?

10. What did you learn about money from watching your parents?

These are just ten questions to help you start to examine your own story around money. As we become more familiar with our family story around money, and how we want things to either stay the same or change, we then gain new insight into the directions that we can head.

In the stories we create, we want to look for places of consistency, and when there are exceptions to the rule. We want to start to look at how we want to rewrite the story so that it goes forward. While it is important to understand the story up until this point, we also want to start to look to the future to determine how we would like the story to look going forward. What would the script of your financial future include? How can you start to write into your new script?

In my next blog post see how your story may have led you to fall in love with a profession and not a person.

Written By: Ed Coambs

Edited By: Joey Glass

From Simplicity Towards Mastery

We run around frantically looking at our most vexing problems in life for simple solutions. For many people they are either marriage and money. We as a culture are hungry for answers and yet seldom find satisfaction in the answers that we receive. Why is this? I would suggest that we have become accustomed to bland and dull information. Information that is broken down into tiny pieces for us, but with no way of putting it all together. Sure this is the very promise of 12 step programs, 7 habits, etc. Yet the reality is that a journey into deep knowledge can not be summed up in a few simple steps or 5 minutes a day.

The path to mastery is fraught with challenges, set backs, frustrations, and yet for those that choose to journey on the path towards mastery find great joy in the journey. They are not disheartened by setbacks and frustrations, rather they embrace them as they come. At the same time I am not saying pursue them either. This is the place that I have often allowed my own mind to wander. That somehow I have to make the path to mastery difficult or it will not be worth it. This is all wrong, rather it is in the pursuit of mastery that the challenges will come, and with those challenges eventual solutions.  This all of course does not happen in a straight line or on a fixed timeline as much as others would like you to believe.

Think about it, how much would you have appreciated your kindergarten teacher telling you that if you would just learn the alphabet that you would then be able to read. Not the case at all, the alphabet is the simple 26 charters that lead to the development of our language but mastery of the alphabet does not give you mastery of language. Sadly this is what we get with 8 step articles, we get building blocks, but not the whole thing.

Simplicity is important, as it helps us to bunch information together, but at the same time if we don't take the time to dig deeper into the meaning behind the simplicity then we can never fully appreciate the simplicity that is before us. Again with the alphabet. If we were taught that the alphabet was enough to succeed, we would say that is foolish. We all recognize that the alphabet seems simple because we memorized it by the end of kindergarten but we would be missing the significance of how it has deep meaning in our life given the complexity of ways in which it is used in our life. And so the same is true of our marriage and money. We can acknowledge basic patterns about marriage and money from an early age, but if we do not take time to become students of both subjects then we will remain shallow in the way that we go about approaching these relationships.
The reality is that your elementary education teachers are much like your parents in that they lay the foundation for your understanding of a subject, but they can not be an end point of your education. In order to reach the deeper uses of the alphabet you must continue on in school, and the same is true of our marriage and money. If we stop at what our parents taught us then we will be sorely disappointed with life, just as we would if we stopped our education at the 5th grade.


Both Marriage and Money are exceptionally complex topics that can not be reduced to a simple formula. Our understanding and engagement with both subjects and then how they interact with each other are significant and will not be easily mastered. Yet you are not alone on this journey. There are people who are further ahead of you on the journey that can help mentor and grow you as you face the challenges that come with dealing with marriage and money.

The Damage of Shock and Awe

Last night I watched a few minutes of The Biggest Loser and while admittedly I used to enjoy the show and think that what they where doing for people was really tremendous, I now have my doubts. In the last three years I have learned a tremendous amount about how people change and make change last over time.

In our culture we celebrate shock and awe, pull your selves up by your boot straps, and 5 steps to change your life. While these tactics work in the short run, they seldom leave the person in a better place in the long run. At the core, these methods use guilt, shame, and coercion to get people to do what they "should" do. Why are they so popular, because they get results quickly. Which is what so many of us are hungry for, yet what we don't see after the entertainment of watching someone being radically changed, is them slipping back to their old ways often coming in the forms of rebellion.

The real process of change for the positive is a long and slow one, seldom with quick and obvious signs of change. Yet over time, real transformation begins to emerge. This type of transformation comes from internal motivation for change, change that can not be imposed from the outside, but rather can be facilitated by a trained professional who is truly vested in the best interest of the person desiring help. Being able to help people change is hard nuanced work. It can be painful and slow for the facilitator of change, but when they are able to stay in the process and walk alongside, not in front of or behind the person desiring change, then lasting change can begin.

How do I know all of this is true, well sure I have read loads of books about it and earned two masters degrees, but this is not what helps me know about the change process most, rather it is my personal experience of growth. I have experienced both the shock and awe methods of change, as well as facilitated change. The lasting change in me, that leaves me feeling deeply stable and secure has come out of facilitation, not a process of I know what is best for you.

I have only begun to realize my own internal motivation for change, and while sometimes it has not always come out of proper motivation, it has been the strongest propeller of change. Fourteen years ago, I could not have ever imagined having two graduate degrees and one advanced professional certification. The change has been long, slow and difficult, it has had moments of triumph and utter despair, but I am a different person.  A person who is well equipped to help others make lasting change. Am I am done in the growth process? Not a chance. There is still much to learn, and I know that it will be a life long journey that no six week program is going to satiate.

When we only look at growth or change as a six week program, or five step plan we are destined to frustration and despair. While those programs can serve as catalysts for moving forward, they alone will not sustain your growth. Your desire for growth and change must come from within.

What Do You Say About Money?

I know that I am not the only one walking around with voices in my head. No, I am not crazy, and neither are you. We all have these different voices playing back messages to us about who we are and how we should live our life. Many sound like the messages our parents told us. In psychological terms, these voices are called scripts. They are messages that replay over and over again in our head and guide the way that we make decisions and live our life. 

In Mind Over Money: Overcoming The Money Disorders That Threaten Our Financial Health by Dr. Brad Klontz and Dr. Ted Klontz, the authors talk extensively about scripts and how they are formed and influence our financial decision-making. The book highlights nine common relational money scripts, several of which I recognized as my own, and others as ones I have heard from people with whom I work. 

Take a few minutes to review this list of common relational money scripts and see which ones resonate with you. Think about why that may be the case and where you learned them. 

- Take care of your children now and they’ll take care of you later.

- You can tell how much someone loves you by how much they spend on you.

- If you hold others financially responsible, they will reject you.

- Spending money on others gives my life meaning.

- One of the ways to keep friends and family close it to give them gifts and loan them money.

- There will always be someone I can turn to for money.

- I’m not competent enough to take care of myself financially.

- I don’t need to learn how to manage money.

- It’s my duty to take care of less fortunate family members.

Each of these scripts has elements of truth but often gets distorted and misguides the way that we make financial decisions. The challenge is that, when we live out these scripts, they usually end up having both practical and emotional consequences on the way that we view and use money. 

Let’s take one script for example: "Spending money on others gives my life meaning." While this is one of the greatest truths of our culture and spiritual lives and grows out of a teaching that is it is better to give than receive, when taken too far, we rob ourselves of financial security and deny the receiving party the opportunity to learn how to support themselves. When we give too much to one person or group of people, they become dependent upon us, and they lose the opportunity to learn how to support themselves. 

Continually taking time to evaluate your scripts for their truths and distortions can start to set you free in the way that you handle your finances. To start identifying other scripts you may replay in your head, ask this simple question: “What do I believe to be true about money and relationships?”

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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How Facebook Can Help You Understand Compound Interest

Compound interest is one of those financial terms that gets thrown around a lot but is seldom understood. It’s like the sharpest knife in the kitchen block. When used to your benefit, it can carve the most beautiful masterpieces of food, but when mishandled, you can quickly cut your hand off while trying to prepare a delectable meal. 

The impact of compound interest works in two ways. 

1.) Compound interest works for you when you are saving and investing.

   

2.) Compound interest works against you when you are borrowing. (Not all borrowing is bad.)

So, what is compound interest? How can you better understand it?

Let’s use Facebook as an analogy. Do you remember when you first registered for an account? Let’s say on day one, you find  30 friends. The next day, Facebook recommends 10 other friends you could add. Why is that? Because there was a base connection amongst your first 30 friends, and so Facebook could go out and find who else you might know. After two days, you have your 30 original friends, plus 10 from the next day, which brings your friend count up to 40.  You take a few days off, and by day five, Facebook finds another 13 friends for you to connect with. Now you are up to 53 friends. By the end of the week, you start to realize how many people you are connected to and have met in the past. A year has now gone by, and your Facebook friend count is in the hundreds. Why is this? Because you made a small investment of your time and told Facebook who your friends are. Facebook then started to help you connect with others from your past. This is the job of Facebook, to continually help you try and find ways to grow and add to your initial investment of connecting with friends. 

While Facebook’s job is to grow your social network, the financial market’s job is to grow your financial network and net worth. The more connected you are to the financial markets, the greater the value they create for you. 

The expectation is that, when you put money into the financial network, it will grow over time and at an ever-increasing rate. 

Important Words to Know

·      Principle = Money you initially invested

·      Interest = Money you earned on the principle

·      Compound Interest = Money you earned on both the principle and previous interest earned

Short example:

You make a $100 investment. For investing that $100, you expect a 10% rate of return.  (The rate of return simply represents the level of risk the investor is taking on.) 

At the end of one year, assuming you get the 10% rate of return, you will have $110. This is your original investment plus $10 of interest earned. You are happy that things worked out this way and so you decide to stick with your investment. You leave all $110 invested. Again, your investment earns 10%. This year, the 10% was earned on not just your principal $100, but also on the $10 of interest from the previous year. So you earn $11 dollars of interest, which is 10% of $110. Add that $11 to the account, and you have a balance of $121. If you keep up with this pattern, by year three, you would earn $12.10 in interest, bringing your account balance to $133.10.

To recap:

·      In year one, you earned $10 in interest and have an ending balance of $110.

·      In year two, you earned $11 in interest and have an ending balance of $121.

·      In year three, you earned $12.10 in interest and have an ending balance of $133.10.

As you can see, every year you earn a bit more interest than you did in the previous year. While it initially happens in small increments, the magic happens when you stay with this process over decades. Let me jump to the 10, 20, 30 and 40-year marks.

·      Year 10: You earned $23.59 in interest and have an ending balance of $259.37.

·      Year 20: You earned $61.16 in interest and have an ending balance of $672.75.

·      Year 30: You earned $158.63 in interest and have an ending balance of $1,744.94.

·      Year 40: You earned $411.44 in interest and have an ending balance of $4,525.93.

Okay, so by now, you are thinking one of two things: “Wow, this is amazing! How do I get a piece of the action?” or,  “This sounds great, but this is not what happens in reality. This is too good to be true.” It is natural to feel skeptical about what is really possible in the financial markets, yet I would encourage you to know that this is how it works mathematically and in reality. I have seen the impact personally and through the accounts of clients with whom I have worked. 

However, I do have one short warning for you to consider: there are few, if any, investments that will consistently give you a high rate of return. What you should be thinking about as an investor is, “Over the long run, what will my average return be?”

Two Key Assumptions of Compound Interest

1.) When you investment money, you should get a financial increase for the risk that you are taking.

      2.) Over time, the financial markets will continue to grow and become more valuable.

Best of luck in continuing to grow both your social and financial network. Give it time and some attention, and in the long run, you will be impressed with the return on your investment.

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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