Thursday, September 27, 2007

Where Do our Money Personalities Come From?

At times, it just seems like some people are savers and some are spenders. If this is true, I fall pretty squarely in the "saver" camp--at this point in my life. I used to be more freewheeling--like when I was in high school, wielding my dad's credit card with aplomb at bookstores and coffee shops from the Upper East Side to TriBeCa.

But as soon as I was really responsible for myself financially, my attitude changed dramatically. My junior and senior years of college, I lived in an off-campus apartment, and while my parents paid my living expenses, they did so by writing me one check at the beginning of the school year based on a reasonable budget that I'd proposed and we'd discussed. I managed that money for the rest of the school year. I guess if it had ever run out, I could have asked them for money, but I made sure it didn't. I had a job on campus, and I saved every penny I made (it wasn't that much).

My money management skillz were honed even sharper when I got my first job, last September, and began making my own way in the world for real. But there are plenty of people who get their first paycheck and go, "Whee!" and blow it at the nearest boutique. What makes the difference between my reaction and that reaction? I wonder if it's not some personality thing, rather than the oft-repeated platitudes about financial education, because I certainly didn't have much of a financial education. All that meant was that I had to go out and get one.

For me, my desire to manage money wisely is intimately connected to a sense of insecurity, a feeling that I'm on a highwire and I need a safety net, a nervousness about my own ability to succeed. It's also connected to a need to achieve: I get a kick out of setting goals and meeting them, and a thrill from being precociously good at things. There's also a certain cautiousness, a hedging-of-bets, that is not unrelated to the other two: it's a fear of failure.

I'm not saying that there are not very good reasons to save money. Obviously, there are. But are those good reasons my real reasons? I'm not sure they are. I'm not sure it's not all a little less rational than that.


MEG said...

I think our money personalities spring from our values--which are usually ingrained (for better or worse) by our parents and others we grow up emulating/watching. Values that lead you to become wealthy can vary: security, independence, power, greed, and vanity are all different motivators, after all. Others simply value a strong work ethic, a minimalist lifestlye, or a solid education and become rich without ever really trying to.

I didn't have much of a financial education either as a kid; I consider myself lucky that I happened to latch onto a veritable obsession with investing and personal finance at a young age. I read books/articles voraciously, awed by the compounding interest charts usually found in the chapter on saving for retirement.

I think my saving tendencies are more the result of my personality/values in other areas. I was an avid reader growing up. It makes sense I would latch onto personal finance books; I doubt I would have absorbed a parental lecture on the subject. It just so happens I found a book on the subject at age 14...I also value prestige--I will admit that a huge motivator for me continues to be the knowledge that I'm doing better than other groups people (my peers, siblings, whomever).

Really interesting post! It's definitly got me thinking...

My Road to Wealth said...

Very thought provoking entry! Yes, money to me is security. And I think my money personality, like you, also comes from being independent and responsible for my future success.

beth said...

Actually, I think you gained a financial education in your junior and senior years of college. If you sat down with your parents to discuss a reasonable budget, clearly there were some lessons being taught--even if it wasn't step-by-step. You're smart, so you probably didn't need a formal lecture on finance.

My parents taught mostly by example. Some of the values (particularly financial) I hold strongly are ones my parents hold strongly, without them ever saying a word.

However, some of it is probably nature, too. My dad is a saver, and my mom is a spender. Big Brother is definitely a saver, Baby Brother is definitely a spender, and Wee Sister and I struggle between the two. Wee Sister is 22, so I'm trying to move her towards saving. (She still lives with our parents, and just bought a car--used--with cash. I'm proud of her!)

Moneymonk said...

Money to most women is security. Most personalities comes from our upbringing. We mimic what our parents do, because we think it's the right thing. Sometimes we do the extreme opposite. But that where it starts.

rama said...

I’m not always a wise money handler. I went through so much pain when I got buried in credit card debt. So much embarrassment while trying to discover any debt elimination solutions. Well, we all learn our lesson. At least, I’ve become wiser because of that mistake :)