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Discovering Your Money Personalities

When we talk to others about their Money Relationships, we're more interested in the "relationship" part than the "money" part. Money is a tool, a means to an end. And that end is always the relationship.

You spend money on your spouse to demonstrate your love for him or her. You save money for your children's educations to help launch them into adulthood. You set aside money for your retirement because you want to relax and enjoy time with your friends and family. You invest to make sure your future is well funded.

Even when you argue about money, you're really fighting about the relationship. One of you feels disrespected by the other. Or you are afraid that your spouse is going to ignore your financial plans and leave you without a nest egg. You argue because you feel misunderstood or ignored. When you get mad at your partner for buying $100 shoes after agreeing that you could only afford to spend $50, it's not the extra $50 that bugs you. It's that this person you love and trust violated your agreement.

This idea that your relationship matters more than your money is central to what we're talking about in this book. You have a Money Relationship with your partner, but you also have a Money Relationship with each of your children. And we know that you want to make that relationship as strong and healthy as possible, not because you hope your kids will save 30 percent of their allowance or know how to calculate interest, but because you treasure your connection with your kids.

But so often, we meet families who are struggling to keep that connection strong because of money. Mom and Dad disagree about how much allowance little Zack ought to get and what he should do to get it. Now that she has her first job, Candace can't keep a buck in her pocket, and her seeming irresponsibility drives her parents crazy. Ben is a sophomore in college and can't get his credit card debt under control, no matter how much his parents harp on him about it. In all of these cases, the Money Relationships between parents and their kids is starting to crack. And no one is happy about it.

That's why it's essential that parents not only have the practical tools to talk about the nitty-gritty details of money management but also have the kind of relationship tools that help keep them close and connected with their kids.

And the best tool of all is understanding something we call your Money Personalities.

We all know people who have very different ideas about money than we do. It doesn't take long to rattle off a list - your buddy who can't wait to show you his latest purchase, the friend who clips coupons and outfits her kids with thrift store finds, the coworker who's always playing the stock market and the one who gets nervous every time the market takes a dip. And then there are those people we know who don't seem to care about money at all. Spend it, don't spend it - they don't give it a second thought.

What we've come to see in our years of working as financial advisors is that everyone has his or her own unique way of thinking about and dealing with money. And those particular ideas are what make up a person's two Money Personalities.

We (Scott and Bethany) happen to have lots of similar ideas about money. We both love to spend, spend, spend. Our family vacations are a blast! We don't even care if we spend a lot of money. When we were first married and working hard to get our financial footing as a couple, we would still find ways to scratch that spending itch. It could be a stop for ice cream on the way home from work or a weekend getaway or finding just the right gift for a friend or even donating a good chunk of money to a cause we were passionate about. It has never been about the stuff for us, but about the enjoyment we get from spending.

So when we meet people who love to save money, those people who would rather wear a ten-year-old suit than splurge on something new or who will shop for day-old bread just to save a dollar or two, well, we don't get it. And those people who don't think about money at all? What planet did they fall off of?

You have two Money Personalities, your parenting partner has two Money Personalities, and each of your kids has two Money Personalities. While you might have some shared ideas about money, it's highly likely that you also have many differences in your Money Personalities. It's those differences that create tension in your Money Relationship.

Remember, almost every decision you make has a money component to it, so the way you think about and deal with money has a huge impact on your daily life and your interactions with other people. That's why it's so crucial to know your Money Personalities and to figure out your children's Money Personalities.

So let's get to it!

There are five basic Money Personalities:

Saver

The Saver loves to save money and gets a huge thrill out of getting a good deal. Whether he has loads of money or barely a penny to his name, the Saver is always looking for ways to spend less. Savers love to save money and also get pure enjoyment out of helping others save money too.

Spender

It's no surprise that the Spender is all about the enjoyment that comes from spending money. It doesn't matter if she's spending on herself or giving to others. It doesn't have to be a lot - the thrill of buying a new car isn't all that different from the thrill of buying a pack of gum. OK, maybe it's a little different, but for a Spender, buying is buying, and it's awesome.

Risk Taker

These are the entrepreneurs, the visionaries, the ones willing to put every dime they have into a high-risk venture. They are as likely to end up billionaires as they are to end up bankrupt. But it's their love of adventure, a new deal, or the unknown - not their bank accounts - that drives them.

Security Seeker

Security Seekers are always looking ahead and thinking about the plan for the future. The strong sense of planning gives them the secure feeling they need.

Flyer

This is the most unusual Money Personality of all. Flyers fly by the seat of their pants when it comes to money, because they always put relationships over their money decisions. Money barely registers as something that needs to be considered. They rarely talk about money, think about money, or care about money.

Of these five Money Personalities, there will be two that fit you - a Primary Money Personality and a Secondary Money Personality. Think of these two as a team, partners that work together, balance each other out, and even compete with each other. Sometimes one of your Money Personalities drives decisions; sometimes the other takes over. Once you figure out your Primary and Secondary Money Personalities, ask your parenting partner to do the same.

You can look over this list and know fairly quickly your Primary and Secondary Money Personalities. Since this book is focusing on your children, we're going to spend the next chapter talking about Money Personalities as they relate to kids. But all the conversations we're going to cover will go a whole lot better if you and your parenting partner know your own Money Personalities as well.

To confirm your Primary and Secondary Money Personalities, take a few minutes to pop over to our website, TheMoneyCouple.com, and take the Money Personalities Assessment. It's quick, it's easy, and it will be a great help to understanding yourself before working through money issues with your kids.

As the two people who matter most to your children, it's essential that you and your parenting partner approach the conversations that follow as a united team. You might have very different Money Personalities. It's quite possible that you have your own issues when it comes to money. Maybe your marriage ended because of money conflicts. But this is the time to put all of that aside so you can work together to help your kids avoid those same problems and arguments down the road.

In each age and stage section, we'll discuss a few of the "button pushers" that might come up for you as parents when your child's Money Personalities clash with yours. For example, if you're a Spender/Risk Taker and you have a child who's a Saver/Security Seeker, you might be endlessly frustrated by your child's anxiety about saving money and the future. But when you recognize that her anxiety is part of her Money Personality and not some character flaw on her part, you are better equipped to help her deal with those fears objectively and without getting into pointless arguments.

If you and your parenting partner are struggling to get on the same page as a couple or as parents, we highly recommend you check out our book The 5 Money Personalities: Speaking the Same Love and Money Language and our website (themoneycouple.com) for some quick resources to help you get past your own issues and start working together. One of the best gifts you can give your children is a great relationship with your parenting partner. It's the best way to give your children a better chance of having great relationships themselves. And because money affects just about every decision you make as a couple, having a strong Money Relationship is a huge part of building a strong partnership. When you model that kind of communication and mutual respect, it will have a lifelong, positive impact on your kids.

Learning how to work through money decisions together is going to go a long way toward reducing tension in your family. It's going to bring you closer together. And it's going to help all of you learn more about yourselves and each other. Plus, it can even be kind of fun.


Excerpted with permission from The 5 Money Conversations to Have with Your Kids at Every Age and Stage (Thomas Nelson Publishers, December 2014) by Scott and Bethany Palmer.

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