For more than twenty years I was a financial counselor helping people to use their money wisely. Yet, this is the first blog I have written on the topic.
Some people are hoarders; others are spenders. And between those two boundaries there are other money personality profiles.
Although most of us tend to think the next raise or a better paying job is the answer, it isn’t. More money helps, but the real solution is better financial management. Set your priorities and know where your money must go first, and what you have left for spending.
Problems with money must be solved right where you are and not in some future when you will possibly have more money. Money has a crucial place in our lives, but we so often have irrational ideas attached to it that create issues for us. And those ideas help create our profile as a money manager and our problems living within the money we have.
Let’s take just a few paragraphs to examine a couple of those ideas:
I should be able to be generous and do things spontaneously at all times. This leads to overspending, and the credit card debts with their high interest adds up quickly. In reality, the gifts we treasure over a lifetime are usually not the expensive ones, but the ones which reflect the giver’s time, effort, and love. The heirloom passed down to a child or grandchild, the handknit sweater, the perfect dessert for a family where both adults work full time, an evening’s free babysitting for a single parent or time out for an adult caregiver, a plate of fresh-baked cookies delivered with a half hour visit to the widower on the corner, an invitation to a single soldier or a new lonely neighbor for a holiday meal. The list is endless.
The person who earns the money should decide how it will be used. Many couples have one partner a spender and the other the hoarder. Neither extreme is going to make this couple satisfied and arguments and unhappiness will be an ongoing problem. If you know the amount left to spend after essentials like rent or mortgage, the car payment, taxes, and social security deductions, etc., you can set up an agreement on how the rest is handled. It may be an equal split, or it may be more for one at certain times and then reversed at others as individual needs and wants are addressed. But the big consideration is that both partners are pulling their weight, have needs, and should be considered. A full time at home partner is worth his or her keep, just as the working partner is.
I shop because it relieves my stress. This is the temporary relief that costs more in the end. The credit card’s unpaid balances build up fast and can take years to pay off. Anything you put on a card with a balance begins to earn interest at the time of purchase, not at the end of the billing and grace period as it would be if the card was paid off each month. I think of those extra amounts as “paying for a dead horse.” This method always produces more stress in the end than it relieves in the beginning.
Money, gifts, and possessions are an indicator of a person’s worth. I have been poor and not poor, but I have never been uncomfortable without a lot of money. One of the happiest times of my life was when I was living in a “shack” on the beach. And my childhood was a garden of joy where I lived in a bathing suit, a pair of jeans or shorts in the summer and had only a few choices of school clothes. When I married, the challenge in creating a home brought out my creativity. It never affected my worth. I did very well in school and with my work, but most of all I never felt poor even though money wasn’t available like it is now. Worth is based on inner qualities not outward appearances, and lack of money can only affect our worth when we allow it to. It is our choice to see ourselves as a victim or as someone enjoying life to the fullest even when our pockets are empty.
Here are seven other detrimental ways people think about money. We often learn ideas that hinder us from seeing how our parents handled money. We may adopt their ideas or deliberately do the opposite, but these seven, like those discussed in detail above, can create problems in our finances.
1. I should be able to provide for all my needs and those of my family and friends. 2. I don’t plan. The future is out of my control, and my plans never work out. 3. People should only spend money or resources they have earned themselves. 4. Money is more of a burden than a gift. 5. It is my right to allow people to take care of me and for me to be dependent. 6. There is a right way to handle money, and it makes me mad when someone disputes my decisions about money. 7. My problem with money is that it is controlled by others or by circumstances.
The solution to money problems begins by taking stock of the ideas held about the purpose and use of your money. The statements above, as well as a few others, are all thoughts that interfere with the effectiveness of your money. If you agree with any of the statements, perhaps you would like to discuss them with a financial coach and hear from the other side of the coin. However, a brief word of warning…while a traditional financial coach may be welcome since they tell you how to get out and stay out of debt, your need in financial coaching is to look at why you have detrimental ideas about money and how to use it. These are the issues causing money deficits and arguments, and if they are not faced and evaluated all the technical support of how to handle money will be for naught.
Here are some other resources. If you and your partner fight about money and its use, try the book The 5 Money Personalities: Speaking the Same Love and Money Language by Scott Palmer, priced at $4.99 Kindle, $8.61 paperback. Another helpful book is Lorna McLeod’s Make Peace with Money; it deals with common financial misconceptions that lead even the wealthy astray, and how self-limiting beliefs sabotage your efforts and keep you in a state of anxiety. Cost of McLeod’s book is $14.99 paperback; both books can be found on Amazon.
I am not a fan of most money personality quizzes, but there are some on the web. Try a few and see if any are fruitful for you. A better resource would be AFCPE.org, which has a financial coaching program. They look at underlying causes for financial problems and may be able to put you in touch with a counselor. Their website is www.afcpe.org/certification-and-training/financial-fitness-coach/. Get the education you need to handle your money wisely, but remember your personal attitude towards money will color how you use that education.