- Guest: Dr. Megan McCoy
- Host: Adam Walker
- Publication Date: June 7, 2022
[00:00:00] Dr. Megan McCoy: To me, financial freedom is really this like
belief in oneself that you have a plan in place and you're going to be okay. I
think that to me, it's financial freedom.
[00:00:20] Adam Walker: Debt. We've all heard of it. Most of us have it. Debt is an almost unavoidable reality of life. But what happens when it starts consuming life? The experts at Money Management International believe that financial challenges aren't meant to be faced alone.
On this podcast, we hear stories of people whose lives have been changed by MMI’s role as their toughest coach and loudest cheerleader. Their stories are unique, personal, and inspiring. So stay tuned, because we're sharing each guest’s Long Story Short.
Dr. Megan McCoy is a professor of practice and financial planning at Kansas State University and is a licensed financial therapist, researcher, and writer.
On today's episode, we'll talk to Dr. McCoy about the intersection of emotion and finances in her work with the Financial Therapy Association and Money Management International. Dr. McCoy, welcome to the show!
[00:01:27] Dr. Megan McCoy: Just one minor thing. I'm actually a Licensed Marriage and Family Therapist, and Certified Financial Therapist. Which is good to say, though, because no one knows what a Financial Therapist is.
That there was only a great study by my friend, Sherry, who talked about how many people thought financial therapists were all shrinks. And there was recently a study by Kristy Archuleta and her colleague at University of Georgia, and we found out 70% of people who consider themselves Financial Therapists now are actually financial professionals, financial planners, financial counselors, and financial educators.
But, it's so new that I think a lot of professionals and clients don't know who they are or how they could possibly help. So I think it's fun to kind of have a chance to kind of talk about that a little bit more.
[00:02:09] Adam Walker: No, yeah. Really appreciate you giving us that clarity. I didn't even know that that was a thing. So that's, and that's why we have these conversations. That's fantastic. Well, listen, this is exciting and such an important topic for us to talk about. So let's start with kinda your fly over about who you are, your education, and how you got involved with MMI.
[00:02:29] Dr. Megan McCoy: Yes. So it was all luck, honestly. So I went back after I was working as a Licensed Marriage and Family Therapist for a while because I wanted to go to school to get more practical practitioner skills. Right? Did not know that's not what a doctorate degree is. So I'm in my PhD, stuck in statistics classes, mostly sleeping my way through my time in Athens and being like, what am I going to do next? Like this isn't for me.
Thinking about dropping out, like what's going to be my next step? And the Financial Therapy Association came to town. It was their second ever conference. So this is back in 2013, like it all developed because of the Great Recession and I probably wouldn't have gone except for they let grad students in for free. So I walked into this conference, very last minute, still thinking about what's my next steps. And I saw a live demonstration of financial therapy.
At that point, it was two practitioners and an actual mental health professional, a wonderful, neat one named Dave Jetson and a financial planner named Rick Taylor who's amazing. And they showed a demonstration of financial therapy. And I was like, oh my gosh, like, this is what my clients need. This is what I need. Like, I need this help. Like I had no idea that my emotional well-being was so tied to my financial health until that moment in time. And it opened the flood gate. And so I jumped into these financial literacy courses. I actually started with capstone course in financial planning, which is not the greatest place to start for someone who doesn't know anything about money, but it was a great baptism by fire.
I loved it and I'm still in the midst of it over a decade later. All I want to do is help people start talking about this connection between money and overall wellbeing and help people understand that there are these cognitions, these beliefs that are holding us back from doing exactly what we want to do with them. Hmm.
[00:04:25] Adam Walker: Wow. I love that. I mean, honestly, I'd really never thought about, you know, I think about that that money issue certainly cost stress. Right. But I don't think about the emotional connection of it. And I don't think about how the effects of overall well-being, aside from like a place to live in and things to eat, right? But it's much deeper than that, right?
[00:04:43] Dr. Megan McCoy: So much deeper. And I'm so happy that the Certified Financial Planning Board, the regulatory body that now controls who can become a CFE, what education do they need? What do they need to know for the exam? They recently added a client psychology domain and that domain is just like you were talking about.
Not only do we know the intersection is important, but we know we can tell our clients, until we're blue in the face, what they should do. But if they have these beliefs or thoughts or past experiences around money, they're not going to be able to implement those changes we want them to do. So, yeah.
[00:05:17] Adam Walker: I mean, so it's interesting that you mentioned that like so much of what we believe about ourselves affects the actions that we take, right? And if we believe the wrong things about ourselves, we take the wrong actions. But if we can start to believe the right things about ourselves, we can start to take the right action.
[00:05:35] Dr. Megan McCoy: And the right things about money. You like the reason I think financial therapy is still a rather small domain is that not only do financial planners rather work with the numbers sometimes. Like they rather, like, let me get the best spreadsheet for you. But mental health professionals also don't want to go into the numbers. Like we have these beliefs around money not being important or somehow being about greed or, or superficiality. And so we don't engage in those conversations either.
But what we know from great researchers like Jeffery Doom and so many more is that money is what we project our deepest fears and dreams and hopes onto. And so by having these conversations in both our fields, we're able to get our clients dreaming and hoping and uncovering their fears.
[00:06:20] Adam Walker: I love that. I mean, so it was a really in a lot of ways, the way that someone looks at money as a microcosm of sort of who they are, right? And in a broader sense. Wow. I never thought of that. That's kind of amazing.
So let's, let's dig in to debt for a minute because you know, that's such a, that's such a critical topic. How does debt impact a person's story? You know, personally, professionally, emotionally. And how do you see debt counseling factoring into that picture?
[00:06:53] Dr. Megan McCoy: Yeah, debt means so much more. Like we were going back to those beliefs around money and some of us believe money isn't important, so we don't spend enough effort or energy on it. There's others of us who equate our self-worth to our net worth. And this is especially true around some gender dynamics in our country. That if I have debt, that means I've failed as man or a failed as whatever identity has gotten tied into financial success. And so debt has these burdens of not only the, the possible stigma of, of needing support from the government, or other agencies, or just even financial professionals who can help.
But it has this also secondary burden of like, I somehow failed, I'm not adulting, or not doing what I should be doing. Then that is compounded by the fact we don't talk about money. So we think we're the only ones who are in debt. We're the only ones who are going through this. Because no one else is sharing their own struggles and experiences around it.
[00:07:52] Adam Walker: Yeah. I mean, so to your point, right, and which is my next question, is there's a stigma around debt. And, and what strikes me about it is that, and maybe I'm wrong. Tell me if I'm wrong, but what strikes me is about it is that I feel like everybody deals with debt and nobody ever talks about it right. I mean, is that, is that right?
[00:08:13] Dr. Megan McCoy: It's so true. Like you, I remember I teach like a financial lite racy class to my undergraduates. And there's always one slide on how much debt Americans have and it's insane.
Like we have so much student loan debt. We have so much credit card debt. We have so much housing debt. So much has been exasperated because of COVID and yet no one's having conversations around money with their family, with their friends. It's just something so taboo. My friend Ken White and I have used this data data set a couple of times that talks about like financial communication and almost 90% of the sample has not talked to anybody about money and over a year.
Those are so many opportunities to say I'm in debt too, here are the resources I've pulled in, here are the things that have helped me. Instead, we're so ashamed, we keep it hidden, and we can't learn from one another.
[00:09:05] Adam Walker: Well, and then it, it, because we keep it hidden because it's that stigma, it also causes this level of stress that's really profound and we just carry the stress and we don't know what to do when in fact there are solutions, right? And we can just talk to people and, and find those solutions if we're willing to just have the conversation. Right?
I'm curious then how, how do you think about creating those conversations? If, if you're, if somebody is listening that that realizes, you know, maybe they have credit card debt or maybe they have other debt that they, that they don't talk about. Like how do they start that conversation with somebody?
[00:09:42] Dr. Megan McCoy: Yeah. I think being vulnerable is very scary, but it can be couched in your plan. You know, like I'm in this debt. I got underwater and I'm figuring out a plan and I'm reaching out to everyone I trust and respect to hear if they've ever had similar experiences so I can learn from them.
So here are my strategies I've come up so far. Have you had any of your own that you could share with me? And so then it comes from such a place of debt is not unsolvable. Like Dave Ramsey's is, has helped a lot of people. There are some limitations in what he suggests, but the reason he's helped so many people is he very much projects the big stories of people overcoming massive amounts of debt. These at the end of the day, we know if you have a plan in place, we can figure it out. If, if, if you figure out how to make your cash outflow a little bit less, just a little bit less, than your inflow. Over time, you will be okay.
And I can speak personally, because part of the reason I needed financial therapy so much as I got into a massive amount of student loans, because I wanted to go to school for ever. I almost attempted, and I was almost succeeded, but I got into a lot of student loan debt and I had this coping strategy of just saying it was such a big number, I was never going to get over it. So why should I care? Why should I try?
And then I got a plan in place and it was a really long plan of like 10 years of paying it back and 10 years in your 20 seems like an eternity. Almost an hour is like, not that long, but when I finally got through it, I was like, that really didn't take that long. You know, I could, I got, if I can pay off six figures in student loans debt, anybody can overcome any kind of debt as long as there's a plan, as long as you trust the time is on your side.
[00:11:29] Adam Walker: Yeah, and, and, and in thinking about that, right? Like we're, we're, again, coming back to this concept of conversations, I feel like what prohibits people is this concept of, if you talk to a friend and say, I've got this blank debt, you know, whatever that is that I'm dealing with, I feel like we're, we're, we're assuming the friend is going to look at like we have three heads and be horrified.
But in reality, the statistics show that very likely the friend is going to look at us and go, you too? And then it, and then it's an opportunity for the friendship to go deeper. But it's also an opportunity to share learning and resources and opportunities to help one another.
[00:12:06] Dr. Megan McCoy: Right. Right. I mean, if your friend somehow managed to never get debt then I promise you their parents, or their siblings, or another friend, someone close in their life has experienced it. It's touched too many people's lives to not be a universal experience at this point.
[00:12:23] Adam Walker: Yeah, that's right. That's right. So, looking at the other side of the coin, recognizing that most everybody's dealing with this, what does freedom from debt look like from your perspective?
[00:12:34] Dr. Megan McCoy: Yeah. You know, one thing I, I talk a lot in my nerdy lessons is the difference between financial stress and financial anxiety. So oftentimes financial stress, what it means is that there's something clearly stressing you out. There is an external factor that is causing you stress. You don't have enough. You don't, you want more. You have your needs not getting met. What happens over time is that we're not meant for sustained stress and after a while, the stress becomes anxiety. Anxiety, no longer has an external factor. It's no longer pointed at one thing. It becomes this ambiguous shape within us that we worry about finances and it becomes almost like bleeding into other aspects of our life.
The financial anxiety is harder to conquer because you don't have to fix one number on a spreadsheet. Now you have to have a sense of okayness, a sense of I'm going to be okay.
And I think financial freedom does not mean well, does not mean a number in the bank account. I know very, very wealthy people who still have all this financial anxiety looming upon them. I also know people who are just barely making it by who are not worried about their future. They know they have a plan in place.
So to me, financial freedom is really this like belief in oneself that you have a plan in place and you're going to be okay. I think that to me is financial freedom.
[00:14:01] Adam Walker: I mean, I love, I love that. Because if we have a plan, you can look at it. You can see the end goal. You can see where you're at in the plan. You can see, oh, let's see how far you can look back and see how far you've come with the plan. And it gives you that peace of mind. Right? Cause that's really what we're looking for is that, is that, that comfort, that, that stability, that peace of mind. And that's what that plan gives you.
[00:14:25] Dr. Megan McCoy: There are two, at least two, there's probably more, but two great books I've read on behavioral change recently. Called, one's called Tiny Habits. One's called Atomic Habits. Both of these books, underlying it, is that we cannot eat off the whole thing right away and we shouldn't either.
Because like, let's take my six figures in student loans. Right. I paid it off recently and it felt so great that first day. And then the next day I was like, oh, that was pretty cool. And then like a week later, I found myself not thinking about it at all. But if you create a plan with all these little tiny goals, tiny accomplishments, where, like you said, you could track over time, this progress you were making, you get to have all these mini celebrations and you, what we know, is that mini celebrations create more long lasting happiness than one giant excitement. That plan is key.
[00:15:17] Adam Walker: Well, I mean, and I love, I love that you mentioned Atomic Habits because it's one of my very favorite books in the world. And, and honestly, like that's where that concept of the way that you view yourself affects the actions that you take. Like that's where that came from for me, because in a, in a different realm, like, so, so not talking about financial, but for me, exercise, I never really considered myself to be very physically fit. And then what I was, I was listening to Atomic Habits and I decided you know what, I'm going to start viewing myself as an athlete. Like that's my persona, I'm going to take that persona. I am an athlete.
What does an athlete do today? An athlete exercises. So that I've been exercising more consistently than any other time in my entire life because of that one change in how I view myself. And so from a financial perspective, right? If, if people can view themselves differently, then they can begin to make different decisions. So I'm curious with kind of framing that up for you. Like, what are some personas financially that you would suggest people take on to consider themselves that way?
[00:16:19] Dr. Megan McCoy: Yeah. You know, I can help it resonate about how I used to call myself like bad at money. Right? And I think I've met a lot of people like this. Some of us think we're bad at money because we're wasteful. Some of us think we're bad at money because we just don't know the tricks of the trade or all these different reasons.
But if you could reframe yourself as someone who is competent with money, like. I am someone who knows money is important to reach my needs. It's not that money is going to make me happy. It's that money is going to give me the opportunity to reach the goals I want in life that will make me happy and I have the skills to get there.
I think that is an amazing shift into thinking about this persona of like, of confidence of, of like we talked about that belief in yourself, the belief in the plan belief in your future will be wearing. You know, not to get nerdy. I don't want to lose any of your listeners by talking about theory, because I remember again, sleeping through my doctoral programs, but so much, I think, of our problem in Atomic Habits touches this, too. Is that early Econ theories, early theories we use to describe people's personal finance always had a very big focus on self control. Like people aren't doing the right thing. Because they don't have enough self control.
And I think that's BS. I don't think that's true at all. I don't think it's self-control, I think maybe you're coping or you're, you're having different priorities, or you're in pain, or you need some more scaffolding. I don't think it's self-
control and if we just keep on battering ourselves that we're not doing the right thing financially, because we don't have self-control, we're just going to end up black and blue from our beatings. Not actually better around our finances.
We can make, finances have enough defaults nowadays that we, we can make things easy around finances that it doesn't have to be about self-control. It could be so many things automated, so much about daydreaming about future goals and so you're no longer making sacrifices just to being self self-control. You're making sacrifices for that future
trip to Europe, or paying off that car, or getting your dream home and your partner. That's a lot easier to work with, then you need to have more self control.
[00:18:27] Adam Walker: I love that. I love that perspective. That's so great. And I agree because when you, when you focus. I need more self-control, that's not a good way to get more self-control. It doesn't work that way. That's a terrible, terrible methodology.
[00:18:38] Dr. Megan McCoy: You have to go shopping to make yourself feel better for a beating yourself up.
[00:18:42] Adam Walker: Yeah. Yeah. It's it's it's crazy. Well, well, Megan, this has been amazing. So two last questions. The first though, before we get too deep into it if our listeners want to hear more from you, are there places online they can find you and connect?
[00:18:56] Dr. Megan McCoy: LinkedIn is my favorite. I am a little bit what they call a geriatric millennials. So I'm not great about all social media, but I am good with my LinkedIn. So please join me there. And if anybody's nerdy and likes to read, I have what's called a Google Scholar profile where he can see all my articles I've written on the intersection of financial health and wellbeing. That's a fun one. And you can always email me. My email is email@example.com.
[00:19:22] Adam Walker: Wow. That's fantastic. So last question. Are there any final thoughts from anything we've discussed so far that you'd like to share with our listeners?
[00:19:29] Dr. Megan McCoy: I just love that part of your underlying message was to get support. If you find that your money is getting in the way of your emotional wellbeing, or if your emotional wellbeing it's getting in the way of your financial behaviors, reach out to support. I mean, every financial professional I talked to through my K State program just wants to be more than an accountant to their clients. They want to be that listening ear. They want to be supportive. They want to be caring and they can really be a wonderful resource for you.
[00:19:59] Adam Walker: Wow. That's fantastic advice. I so appreciate it. And thank you for joining us on the show today.
[00:20:04] Dr. Megan McCoy: Thank you so much, Adam.
[00:20:09] Adam Walker: Thanks for listening to this episode of Long Story Short, brought to you by Money Management International. To learn more about how MMI helps people from all walks of life get unstuck and out of the vicious cycle of debt through personalized solutions that inspire hope, visit moneymanagement.org. This episode was produced by Edgewise Media. Scriptwriting and production by Clara Jennings, editing by Brandon Ellis, and show hosting by me, Adam Walker.
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