Tax season is over — and so is the financial stress that comes with it.
But what happens if financial stress affects you year-round?
Confidence and the belief that you can do something are the most important parts of behavioral change, according to Megan McCoy, associate professor of personal financial planning at Kansas State University.
McCoy is both a licensed marriage and family therapist and a certified financial therapist. She joined Here & Now to talk about how to manage financial stress year-round.
7 questions with Megan McCoy
How can you stay upbeat when it comes to paying taxes?
“No matter what you get or if you’re paying or getting money, I feel like it brings up a host of emotions, a lot of it around like, ‘Did I do it right? Did I miss anything? Am I making any mistakes?’ And I think that’s really common. And I hope that people who maybe do have to pay a little bit this year see it reframed a tiny bit that this payment isn’t a reflection of a failure, but it actually means you earned money, you did well, you participate in the economy and you’re supporting the systems that we all rely on. And that doesn’t mean it feels good, but hopefully you take some of that emotional sting out of it.”
If you did get a refund, what should you do with it?
“I love the work around mental accounting. Even though each dollar should be treated exactly the same, it feels different to get a refund. It feels like a bonus, almost like grandma sending you birthday money. And so I just hope people are intentional before spending pause and ask what would make the biggest difference in my life? Maybe take a little time before spending it. That might mean catching up on bills, making an emergency cushion. But no matter what you do like, I hope that is intentionality and aligned with your values and your other financial goals. And it doesn’t mean that you can’t save a little bit for some of the fun, because I think balance is amazing.
“I might get in trouble with my other financial planners, I think that’s great to have savings. But sometimes people save with that intentionality, like we’re saving just for savings purposes and I hope you’re saving because you want to take care of your family or you’re worried about an emergency or you want to reach a goal one day. And I hope you use it in line with those goals.”
According to LendingTree, Americans have more than $1.2 trillion of credit card debt. Talk about the stigma that comes with debt.
“I hate that stigma around debt. Sometimes, psychologically, we make mistakes. Sometimes we can use that to learn from it. But many times, debt comes from external situations. The number one reason for bankruptcy in the United States still is medical bills. Sometimes that debt is from extra things that you weren’t expecting: taking care of children, taking care of our aging parents, being stuck in the middle, all these other external factors. But even if it is a failure of not staying out of Target enough, shame isn’t going to help you get out of debt, right? So it’s going to help you shift to say, ‘I have power now to make a difference moving forward. So how can I make a plan? How can I work with a professional to help me pay down the debt?,’ instead of focusing on beating ourselves up.”
You have an amazing personal story about getting out of debt. How did you do it?
“Oh, absolutely! I detested thinking about money. I wanted to give all my money to other people. I felt like I didn’t have the skills other people did with money. So I end up getting six figures in student loan debt as a young person without any hopes of making money.
“Six figures to be a therapist! That math didn’t math! I realized slowly by making a plan, by being intentional, by making these small victories in line with the tiny habits literature, that each small step got me one step closer. And not only did I pay off my student loan debt, but I now have a better relationship with money where I don’t think of it as binary, good or bad, with money, but something that we can practice and spend aligned with who we are and our style.
“Tracking spending. I focused on how could I spend less in the areas that don’t bring me joy? How could I work to increase my pay? Find side gigs. Find other strategies for increasing my income, while at the same time I was being more focused on where my money was going. And those small, not perfect, but small, consistent behaviors over time helped me get out of the debt.”
You are also a licensed marriage and family therapist. Talk about managing finances when partners may have differing opinions.
“Oh gosh, it is so easy to project onto our partners. We don’t see all the times our partners don’t spend money, right? We don’t see all the times they make an intentional decision to make the right financial decision. So it’s very easy for couples to blame their financial situation on their partner. And I think as much as we’re improving around financial communication, we’re still not great about having open communication. So couples aren’t able to get on the same page about what are they making sacrifices today for gaining in the future? And the more couples can talk and get on the same page and put the onus on what they can do instead of what their partner should do, I think the more aligned they will get. I always knew I was going to be a therapist, and it was when the Great Recession happened that I looked at my clients and saw financial stress eroding not only their physical health, but their mental health, but their relational health, too. And I was like, this is how I can make a difference in my client’s life by getting control over our finances, we can improve all those other areas of functioning.”
How can we make smart decisions in the year to come and avoid stress?
“I just hope your listeners believe in themselves. I spent so many years saying ‘I just don’t understand money. I just don’t know money. Other people are better at money than me.’ And I wish that that self-doubt that was so present in me wasn’t present in anyone else. It is an exercise, and if you do feel like you don’t have the skills within you, I hope you see a financial planner. I hope you see a financial counselor that’s often offered for free through your employee assistance program.”
When stress gets extreme and you feel like you are on the verge of losing your home or you can’t afford health care, what can you do?
“I think it is a plan, it is finding the resources and community to support you. It may be relying on friends and family short term while you create a plan on how you’re going to move forward. I want your listeners to believe that no matter how dire their financial situation is, there is hope, there is optimism, and there are professionals who are available at pro-bono and volunteer basis to support them, and I hope they reach out and get the support they need.”
This interview has been edited for clarity.
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Jenna Griffiths produced and edited this interview for broadcast with Catherine Welch. Griffiths also adapted it for the web.
This article was originally published on WBUR.org.
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