Your Money Personality:
Know Your Financial Habits
When it comes to taking control of your money, the
best advice is to “know thyself.” How we handle money - earning it,
spending, saving, giving, borrowing – largely reflects our attitudes
toward money. Someone who is uncomfortable or afraid of money, for
example, may be less apt to take the necessary steps to invest for
long-term goals. Another person may believe that money brings happiness
or power, and will therefore take unwarranted risks with investments or
spend money impulsively. Money colors our relationships with our
spouse, children, friends and co-workers. In fact, conflict over money
is the number one cause of marital strife!
We need to control money instead of letting it
control us, and we can do that by understanding our attitudes and
values. The following is a series of questions about your basic
attitudes toward money. There are no right or wrong answers! They are
intended to stimulate your thinking about how emotions affect your use
of money and your current financial situation. If you are married, sit
down with your spouse and go through the questions together. Find out
how each of you perceives the other person’s money personality.
How did your parents
handle money? Children take many of their cues about money
from their parents into adulthood. Did they budget, save and invest
wisely? Or, did they spend like there was no tomorrow? Did they fight
about money? You may be just like your parents, or you may go in the
opposite direction, but either way your personality takes root in your
upbringing.
Do you worry a lot about
money? Worry and fear can prevent people from taking actions
to save, reduce debt, pay bills or invest.
Should the person who
makes the most money in the family have the most say about how it is
spent? Money squabbles in a marriage often reflect deeper
and conflicting attitudes toward independence and sharing.
Is money more important
than sex? A Worth magazine poll found that 40 percent of
those surveyed thought more often about money than sex (13 percent).
Do you spend money to feel
better when you’re depressed? This behavior can run up huge
debts, and spenders feel even more depressed over the fact that they’re
in debt.
Are you afraid of
investment risk? Fear of making the wrong investment can
immobilize you from making wise investments.
Do you see money as the
root of all evil? Popular misinterpretations of wise sayings
can lead to unwise actions.
Do you prefer to spend
money on luxuries or practical items? There needs to be a
balance because you can be foolish on the one hand or unnecessarily
miserly on the other.
Do you trust or distrust others with your money?
A strong distrust or obsessive desire to control your financial affairs
can undercut efforts to seek professional advice from a Certified
Financial Planner™, CPA, or other financial experts. Excessive trust
may open you up to scams or poor financial advice. Experts still have
much to learn about the psychology of money. But just being aware of
your attitudes, emotions, and goals regarding your finances can help you
take charge of your financial life.
*****
Cal Brown is Vice-President of The Monitor Group, Inc., a fee-only financial planning firm located in the Tyson's Corner area of McLean, Virginia. As a nationally recognized wealth management firm, The Monitor Group provides investment and financial planning services to more than 190 high net worth client families in Northern Virginia, Maryland, Washington, DC and across the country. Click
here for more information about Cal and The Monitor Group, Inc.
Back to Table of Contents
|
