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Ken Partch: Money Often Emerges as the Root of You and Your Issues

An understanding of your interior design may help you gain control of your goals, finances

A number of years ago, the church I was attending was in transition. The pastor left and the search committee was interviewing candidates. The congregation was privy to what the search committee wanted and that was for the candidates to preach on tithing. I thought then and still do that it was a difficult and controversial topic, especially when a recently minted theologian might better show off his or her theological prowess and oratory skill on topics such as grace, mercy and forgiveness.

Don’t worry, I won’t be talking about your level of giving at your synagogue or the church you may or may not attend. Instead, I will be delving into an issue and asking you to look into the crevasses of your psyche and make the determination if you are held back in any way from mixed messages on money from your childhood. I am not going to make you relive your childhood years, but I will admit to wishing you a great 2011, though.

Here is the problem as I see it: Many Americans are in bad financial shape. The basics of financial health are quite simple, however. You need to spend less than you earn and invest the difference for your future. Honestly, Americans like to spend and not save. Not until the financial crisis of 2007-2010 did consumers begin saving. It took a meltdown for Americans to do what they should have been doing all along.

A recent study by the American Psychological Association determined that financial concerns are the leading cause of stress in America, with 72 percent of Americans naming money as the No. 1 cause in their lives, above such stressors as work, children, debts, family matters and health issues.

A common misconception is that disordered money behaviors are caused by a lack of money. It is a seemingly logical conclusion for many that having more money can cure problems with money and related stress. Research consistently shows this is not the case, however. Research also shows that there is no significant correlation between happiness and money once household incomes are above $50,000 per year, and attitudes about money have been found to be independent of a person’s income. Moreover, the significant economic gains experienced by Americans in the past few decades have not been accompanied by a rise in life satisfaction, and are actually correlated with increases in distrust and depression.

Over the past couple of years I have noticed something about people who have high levels of debt, compulsion spending habits and even pathological gambling habits. Any one of these or more often triggers a depressed state in an individual. Personal relationships and job performance often suffer. The shame and lack of transparency distance spouses and bring up fears and self doubt as to what the future holds. I have had people in my office who will just as well tell me about infidelity, chain smoking, cheating on their income tax than tell me their money troubles. When I inquire where they learned this, they most always say they saw it growing up.

Maybe this is a good place to ask yourself a question or two. Do you have symptoms that may include anxiety, worry or despair about your financial situation, a lack of savings, excessive debt, bankruptcy, conflict with family or others around money, compulsive overspending or hoarding, financial dependency, or excessive financial risk-taking? These maladaptive patterns of money beliefs and behaviors persist despite their emotional, relational and financial consequences.

In the years I have been an advisor, I have had the pleasure to work with all sorts of clients who either had wealth or wanted to create it. Yet most financial advisors want to work with people who already have money — which is sort of a no-brainer. Author and psychologist Brad Klontz writes in his book, Facilitating Financial Health: Tools for Financial Planners, Coaches and Therapists, that combining planning and therapy is a new concept incorporating financial planning with more traditional tools and techniques associated with financial counseling.

A therapist will typically work with a financial advisor to “mine out” old messages and reinsert new ones. The therapist offers cognitive behavior and the advisor offers education.

For too long, investment advisors have been focusing on what call I the “exterior” of a client. The exterior components of a client’s life might include past actions, such as previously filed tax returns; present actions, including a client’s cash flow and net worth statement; and future goals, such as retirement and estate planning. Basically, advisors only consider the quantitative aspects of a person’s financial life.

The equally and far more important descriptor is what I refer to as the “interior.” By this I mean the attitudes someone holds about money and they way they relate to personal financial issues. Interior components maybe include past beliefs and emotions; present issues, which consist of factors such as awareness and authenticity; and future issues, which include a client’s dreams, aspirations and unnamed goals.

In most cases of “traditional financial planning,” financial advisors have given greater weight to the importance of the exterior position of the client. I think that while this is well and good there remains far more constructive conversation when you blend the two together.

I certainly don’t hold myself out as a therapist, and while this week’s message is not the obvious New Year’s message filled with challenges for a bright future, happy times and a seasoned financial advisor’s best picks, it indeed needs to be told. This issue is rarely discussed in an advisor’s office because the discomfort of dealing with such issues is often so shameful it is usually only when years have gone by and relationships severed that the truth of the matter surfaces.

So as we enter this first week of the new year, know that although financial education, positive reinforcement and positive visualization are all valuable, alone these methods are just the beginning, rather than the end-result of the process of rerecording over old messages that can bring real wealth. Remember, my goal for you is that you look deep inside of yourself to determine whether you correctly perceive your money issues or if you are stuck and need a professional to help you get back on your way.

Note: If you think you are depressed about your money problems or anything else that holds you back, I would suggest you speak to a professional about it. Santa Barbara is blessed with many consummate professionals. I would also point you to Dr. David D. Burns’ book, Feeling Good: The New Mood Therapy.

— Kenneth Willard Partch is a registered principal offering securities and advisory services through Independent Financial Group LLC (IFG), a registered broker-dealer and investment advisor. Member FINRA/SIPC. Santa Barbara Wealth Management is not affiliated with IFG. California Insurance #OA5470. Licensed to sell securities in California. Views and opinions are provided as a courtesy. They are intended for educational purposes only and not to be interpreted as specific investment advice. Ken Partch can be reached at 805.563.7699.

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