What Does Your Money Say About You?
Posted by Gail | Filed under Money Management, Take Control
When I’m working with a new family, the first thing I do is take a look at what they have been doing with their money. They send in six months’ worth of all their paperwork – bank statements, credit card statements, line of credit statements – along with completing a budget for how they think they’re spending their money, and a list of their debt. I look at everything that’s been entered into a spreadsheet and start noodling.
It usually takes between two and three days of analysis to get a good picture of how the money has been used, their perception of how they’re using their money, and the gaps that have grown over time. It’s an interesting process, a little like putting together a jigsaw puzzle. And it tells me a lot about how people are behaving. Once I’m done the “financial” analysis, I have a look at their casting tape – done prior to my meeting them – and that fills in many of the gaps. Now I’m ready to tell them what I see.
So, what does your money say about you? When you look at how much debt you’ve built up, where your money goes every month, and how you’re doing on the whole, what picture do you see?
If you’ve racked up a wicked amount of debt on consumables – that’d be debt on your credit cards and lines of credit, or debt you’ve hidden in your mortgage when you consolidated consumer debt the last time you renewed – that may speak to a lack of self control. Or maybe you’re just way bad at planning. Or you’re a gambler, a drunk or a junkie. Maybe food is your drug. Maybe shopping is your aerobic workout.
If you haven’t ever looked at how you’re spending your money, maybe you’re an ostrich in huge denial about the mess you’re making of your life. Maybe you’re refusing to take a good hard look because you’re so afraid it’ll mean that you’re going to have to do things differently and you just don’t wanna.
Maybe you’re doing a great job: your budget balances, you’ve got little or no consumer debt and you’ve dotted all your i’s and crossed all your t’s when it comes to creating a sound financial plan. You pat yourself on the back and keep on keeping on.
How we manage our money is often a reflection of who we are in life too. I’m a planner, so I don’t do anything, including spending, without a plan. And I’m a buttoned-down, detail-oriented girl, so I don’t like to guestimate. I’m organized 25 out of 30 days and that shows in my money management. When I go off track, I give myself a stern talking-to and fix what I messed up PDQ. And I’m completely risk-averse so I don’t carry debt, I’m well insured and I’ve got my Will in place.
What does your money say about you? And if you’re not happy with what you’ve done so far, what are you going to do differently?
It’s all well and good to say, “Hey, I’m not a planner, that’s just not who I am. I can’t do this budget thing.” But if the rest of your life has gone to hell in a handbasket because you refuse to do any planning, this may be the time to take stock and make some changes.
I know its hard. It’s always hard going against our “nature” to do something differently. But if your child’s nature was to only eat sweets and never touch a vegetable with a ten-foot pole, would you say, “Oh well, that’s just how she is?” Or would you teach her how important it is to eat well, and give her incentives to add a couple of bites of vegis to every meal?
“That’s just not me,” is a very childlike thing to say. It’s how teenagers respond to things they can’t imagine because they have very limited life experiences. But grown-ups know there are lots of things we must do that wouldn’t be our first choices. From cleaning up puke to wiping dirty bums, from washing the kitchen floor AGAIN because of the gravy slopped on the way to the dinner table to rewashing the sheets we just washed because the cat peed, we do thousands of things we wish we never had to do. We do it because we know we must.
The same holds true for how we deal with our money.
So, when you look at the picture your money paints of you and your life, what do you see? And are you happy with the picture?
September 25, 2009 at 7:22 am
The picture that our money paints of our lives is that we love to go out for food or entertainment. Not all the time, but enough that we are blowing through that budget each and every month. I don’t like it. We end up balancing our budget by borrowing from other areas in our lives, usually the money for car repairs.
We are working towards being more honest with our money. Recently we’ve made the commitment to start using the jar system. We’ve traacked all our expenses and income for the past 18 months and we’ve been doing pretty good with debt repayment. We want to increase the debt repayment and we think the jars will help prevent us from going over. Now if the money isn’t in the jar, we don’t spend it.
regards,
Jason
September 25, 2009 at 7:28 am
[...] News Sources wrote an interesting post today onHere’s a quick excerptWhen I’m working with a new family, the first thing I do is take a look at what they have been doing with their money. They send in six months’ worth of all their paperwork – bank statements, credit card statements, line of credit statements – along with completing a budget for how they think they’re spending their money, and a list of their debt. I look at everything that’s been entered into a spreadsheet and start noodling. It usually takes between two and three days of analysis to get a goo [...]
September 25, 2009 at 9:08 am
I’ve found that I’m much more visual with my items than I thought. I like to see things in black and white, in money technicolour and in wistful longing. I too am on the jar system and plugging away at it. I have a renewed sense of vigor with my debt as I truly want it gone. I have set up my budget to take care of this, enjoy paydays for the bill payments I make and am finding new ways of doing things.
I’m on my last creditor in terms of payments. I chastise myself regularly because this creditor could have been paid off months ago if I’d just stuck the course. It’s amazing how one decision nearly 2 years ago adds time to your debt freedom date.
Best of luck to everyone on their introspective, honest mission of discovering what their money truly says about themselves. for those of you who already know and are on a plan to change that keep at it. And for those still in the dark, you’ve come to the right place. Read everything and make a date with yourself to get started.
September 25, 2009 at 9:15 am
I think my money used to say I was a) clueless b) afraid and c) in denial. I would like my money to say that I’m a) responsible b) smart and c) organized. I proud that I’m about 95% of the way to those three positive attributes (I think)
I love the example of the veggies and kids. I think this applies to so many behaviours people struggle with. For another example, until my late 20s I was a lifelong couch potato. The interests I’m drawn to are mostly sedentary (playing piano, reading, writing, etc.) so I could easily say “exercise is just not me”. However, as an adult who would like to stay healthy, I know I need to do it. I had to find a way to make it work for me. Now I exercise about 5 days a week, and I actually enjoy it now. Go figure. I think if people who don’t think money management is “them” could learn to enjoy the benefits of it, even if it takes some effort at the outset. With articles like these, hopefully they “get off the couch” and start!
September 25, 2009 at 11:53 am
Great post Gail!
September 25, 2009 at 11:54 am
Great Post Gail – and great responses everyone.
I know that a look at my finances would state that I’m still far from being honest with myself. However, I have come a long way — I pay off my credit card every month and pay off my student debts, although not aggressively enough (I admit).
I agree with psychsarah — the kid/teenage analogy is very true. Being aware and mindful of our self-talk, then taking steps to change, is life enhancing! This applies to health in general — financial, physical and, of course, emotional.
Great post!
September 25, 2009 at 12:25 pm
Jason, we too found that eating out/food has in the past taken up a large portion of our money…quite substantial if you tally it up over time.
We’re using cash-only now.. and have very little entertainment budget as we’re farily aggressively paying down debt. What we’ve recently started doing – to save money while still getting the ‘treat’ of good food and the convenience of eating out – is to go through the weekly grocery flyers together each week.
We make a list of the essential items(on our usual list) and where they are on sale. We also add to this list any convenience items (i.e. gourmet cook-at-home pizzas, frozen entrees, deli counter deals and the odd Subway or McDonalds coupons) and if through our use of coupons and sale finding we’re able to cover our usual list with budgeted money left over – we use that ‘left over’ cash to splurge on some of the convenience items.
While I realize we haven’t ’saved’ money in this way, we certainly haven’t gone over budget and it makes it a fun challenge to get a good deal grocery shopping so that we can have a treat too. One week we were able to trim the cost of our usual list down by almost $40 using coupons and strategic shopping…that was a lunch out AND a gourmet pizza or two to eat-in another day!
September 25, 2009 at 4:52 pm
The picture I see is one of two people who have been and are generous. Hubby and I have been givers from the get-go. We raised our two children the best way we knew how, going without ourselves at times so they would have what they needed (and I mean needed, not wanted). Loving them, supporting them and being there for them through everything.
)
As adults they both have thanked us. So it has been worth it in spades. Both are very good with their money. And that in a nutshell is what parents do. Am I wrong?
(Yes, we put debt on our LOC – it’s been up and down for years. However, I’ve been Gailvazoxladeized – my word since I ‘met’ Gail – and I have been working very hard to pay it off and its working)
Even since my epiphany, with others, we give what we can. Should I consider this a fault?
Hubby buys takeout meals in Toronto a couple of times a year when we go and hands them out to the homeless, usually the kids on the streets and he feels good doing this. They are always thankful and eat it all right away. And for us on these trips to Toronto I pack some of our own food so we don’t spend a lot eating out (it probably helps that I have such a strict diet and this is easier too!) Yes I budget for him to buy the takeout and for us to eat out as well. So, would it have been great to put that extra $40. – $50. he has used to buy the takeout food on our LOC? Probably. But, we both feel for these kids and we try to do just a little bit to help others and that means more. We don’t agree with handing them $$$.
Budget, budget, budget. That is the operative word. After being off them for the summer, I’m back on the jars as of today (well, actually it’s a coupon holder that works much better – furbabies don’t try to knock IT on the floor to smash into pieces)
So, picture this please. A couple of old crocks smiling
September 25, 2009 at 5:14 pm
Awww Catherine, your post was so sweet!! Keep doing what you are doing
September 25, 2009 at 11:36 pm
I knew there was a reason I like you, Gail. I am also a planner, highly detail-oriented, and risk averse. I am a saver, and I live within my means. Luckily, I married a man who shares my perspective. Sometimes I worry that our money says we aren’t having any fun, but I think that as long as we are happy and secure, that’s what really matters. Having my financial ducks in a row helps me sleep at night, I know that much for sure.
September 26, 2009 at 11:02 am
Our money picture shows us as very aggressively paying down our debt, to the detriment of our savings. I have long thought that it was always better for all of the money to go to the LOC debt–reasoning that, if I needed some, I can still take it back out, but in the meantime I’m cutting down the interest while that money is in there. Lately though, I’m starting to think putting more to savings/emergency would be beneficial. Last week I had to put over $1k back on it (even though I’ve paid 1400 on it this month) because I didn’t have enough savings….so definitely rethinking that one.
Otherwise, it shows a couple who enjoy golf and the occasional pizza out–sometimes a few too many pizzas out.
We do have a golf jar though–any extra cash (ie birthday money, rolled change, work bonus) goes into it for golf games. It works quite well–we never have to feel like we’re using day to day money for it. We’re saving for two passes over the winter so the cost of golf will be further reduced to gas and beverages per day. 
September 26, 2009 at 10:14 pm
It is no wonder some people’s financial house is in a shambles, what with advertisers throwing twists at us. I just came across a full page ad in a magazine – a young Asian woman, with hands full of shopping bags, looking at a mannequin in a shop window. Across the top of the page were two repeating questions – RENT MONEY? A NEW SKIRT? RENT MONEY? A NEW SKIRT? As parents, we need to start teaching our children the downfalls of all the ‘gimme gimme’ advertising on TV and in magazines, especially with Christmas coming up. The instant gratification mentality is pounded into their heads from all angles, and if what our kids see is the adults indulging themselves because they don’t have to pay for six months, or the payments are only ”$40″” (forever), they will grow up believing that they can and should have it all – RIGHT NOW. We need to remind ourselves, and pass it down to our younger generations, of the habits of our grandparents style of shopping – saving the money first, and not putting anything on credit. My mother always tells me about her first job. On payday, she paid her rent, bought minimal food, and paid all her bills; she never spent another penny until her next paycheque, just to make sure she got one. Then she might splurge on her favorite treat – an orange pop/ice cream float, which in the early 50’s probably cost 30 cents! I was once called frugal in my youth by a man trying to talk me into some payment plan purchase. After I got rid of him, I had to look it up to make sure he wasn’t calling me a bad name… I am proud of my frugality, my practicality, and my creativity – which allows me to indulge my desire to own a horse. I don’t drink coffee, get my nails done (ever), and get my hair cut maybe twice a year. I think my money picture shows a middle aged woman who has it all together, now if only I could remember where I put it!!
September 27, 2009 at 12:16 am
Hmm. This was a good question! When I first started thinking about what my money says about me I thought words like: prudent, safe, responsible. But I also saw that we spend a significant portion of our budget on supplies for our many flaky/odd do-it-yourself projects.
We spend money on wool for my knitting, or wood for his cider press, or supplies for our ever expanding garden, or bits for his computers. I used to panic about it, until I realized that this spending 1) keeps us busy, 2) is used to produce things we value. And that we are saving enough money for the future.
I guess our money says that we are willing to make it ourselves, rather than make do with what is available. Also that we are a little crazy.
September 27, 2009 at 10:43 am
@ Suzanne – right on! I see ads on TV as well as in the papers for buy now, don’t pay for 12 months. That’s scary. Now, if you were the type of person who would put away the total divided by 12 into an account every month, perhaps it would work? I wonder how many would.
@GirlMakesSense – thank you for your kind message. I have so many thoughts flying through my head about being right/wrong in my thinking.
September 27, 2009 at 12:16 pm
Hi Catherine – actually my dh and I have on occasion purchased now – pay later. I set up the acccount at ING and work it out to pay it by the 11th month – just to be safe and pay it off and not get hit with any interest charges.
September 27, 2009 at 8:24 pm
HI Dianna ~ I think I want to be you when I grow up! That is awesome that you have succeeded in having what you want now and paying later.
I’m a newbie at this…but am making headway having $$$ saved up for upcoming expenses like taxes, Christmas, renting a cottage next summer.
I’m a work in progress
December 23, 2009 at 2:44 am
I think our picture is of a couple of young people who have made their mistakes, but they are getting better. Hopefully the mistake we have made are inexpensive and minor compared to the sucesses ahead.