Last weeks post I talked about some of the struggles that can arise from being in a relationship with someone with a differing money personality and many times, this tends to be the case. In things like our values, we tend to seek people that are the same or similar to us, but when it comes to personality or habits, typically opposites attract. Often, we seek to find someone that compliments us. The contrast doesn’t have to be great, or polar opposite, but typically it is there.
Money personalities that classify people into two opposite spectrum can be dangerous and misleading. I am referring to the ‘spender’ and ‘saver’ labels that circulate the personal finance community. Labels like these can be misleading, limiting and simply incorrect.
Between saver or spender, I am more of a saver…but its not that simple.
After delving into the money personality topic deeper and taking money personality tests of my own, I realized that yes I like to save money, but its not that simple. In addition to doing some general reading on this topic, there were two money personality tests I did to help me determine whether I am saver. I completed the free Money Personality Assessment from MoneyCouple.com and Money Habitudes by Syble Solomon.
Both assessments revealed that although my underlying desire is to save/invest our money, the reason behind this desire is quite different from a traditional saver.
When completing the Money Personality assessment, I scored highest as a security seeker followed by a saver. For the Money Habitudes my two biggest habitudes were targeted goals followed by selfless.
A traditional saver typically has these money personalities, some of which I can relate, but others not so much:
- Savers get a genuine rush from saving money. It is a source of pride to get something for less. I like to save money but only to the point where I don’t feel that I am trading in too much of my time and effort to strike a great deal. For me, time is more important than money. Also, the level of effort expelled needs to match with the cost and value that I hope to get from what I am buying. For example, when planning our family vacation, I will go through some effort finding the best deals and fun activities on the cheap for us to do while away. In contrast, even though I know Shoppers Drugmart sells their eggs $1.00 cheaper than Superstore (most of the time), I won’t go out of my way to drive to Shoppers just to get the eggs unless I was planning on buying other products there. I am happy when I save money (who isn’t’), but I wouldn’t say I get a ‘rush’ from it. Most of the time I won’t lose sleep over a deal I missed, especially if the time and effort needed to get the deal was more than I wanted to take on.
- Savers are organized and trust worthy with money. OK this part is true. Spreadsheets and I go way back and I have always been a long-term planner even more so now that we are debt free.
- Rarely spend impulsively. They plan every detail of the purchase before making it. Sometimes true but not always. I have spent impulsively in the past, even after debt freedom. Why? Because we have the funds to cover it and I can shift some things around to ensure we don’t go into/ or stay in debt. I don’t encourage impulsive buying and rarely do it myself, but debt freedom has given me the ability to do this. Because we always ensure our retirement savings is taken care of from each paycheque and we both live frugally to begin with, a splurge here and there is something I can live with. I have no problem spending money, if the ‘musts’ are taken care of.
- Avoid credit card debt at all costs. This is true. Credit card debt is expensive debt and does nothing to increase your investments or overall net worth.
I have no problem spending money, as long as my ‘must haves’ are taken care of.
This led me to fully understand what money personality I am. I am a security seeker whose spending decisions are determined by targeted goals. What the heck does that mean?…. Glad you asked.
Prior to giving a damn about my money, I would spend unwisely, not caring about the future repercussions of my spending decisions. I had no targeted goals when it came to money and lived day by day caring about the immediate.
I could blame it on the lack of money conversations in our home growing up or on youthful ignorance, either way, I was a spender.
Fast forward to my late 20’s, a master’s degree and a combined $120,000 of student loan debt between my husband and I and suddenly, things got real. Out of necessity, I started setting targeted goals the first being, to get out of debt. During the 2.5 years needed to accomplish this goal, I started learning better money habits and developed an insane level of discipline when it came to delaying instant gratification.
The skills I learned from paying off $120,000 of debt in 2.5 years made me a security seeker first, then a saver.
I no longer wanted to live in the stress and highs and lows on ‘just getting by’ and from this cultivated my desire to save and invest my money. Once the debt was cleared, I was accustomed to setting long-term financial goals. The next logical step was to set our retirement savings goal. My desire to live a comfortable life during retirement and not have to work after the age of 60-65 propelled the need for me to implement an ambitious savings rate of 25%-30% from our take-home pay and 50% savings rate from windfall income.
After getting a taste of what debt freedom looked like, I couldn’t settle for just getting by. We avoid life style inflation so we can enjoy our money now and in the future.
My desire to live a comfortable retirement also makes me a security seeker, but not in safe investments, but an ambitious savings rate.
Most money personality assessment label security seekers as individuals who like to save their money in extremely safe investments. They are terrified of losing their money and will prefer safe investments at all costs. That could not be further from the truth for me.
It may be my business background or the fact that I know how inflation and safe investments can do more damage to a retirement nest egg than the stock market, but my long-term objective is to increase our net worth, and that requires risk. However, knowledge is power and looking at the history of the stock market and cyclical events has helped minimize my risk of losing money long-term.
Except for our emergency fund, all our long-term savings are invested in the stock market across different geographical locations, industries and product types.
The security I seek is making sure we have a healthy savings rate for as long as we can. I am not worried about the markets because my time horizon is 30+ years, but you can’t invest money if you are not saving it first.
So yes, I am a saver, but I am also a spender, a security seeker and someone who always has targeted goals (financial or otherwise) in mind.
Do you find money personalities limiting? What money personality are you and do you think its an accurate assessment of how you manage your money?
Categories: Money & Relationships
Tags: couples and their money, dealing with debt, dealing with debt after college, dealing with money issues, dealing with money problems, money and relationships, money habitudes, money personality assessments, money values