Excerpted from the book Happy Go Money by Melissa Leong
When I was young, I tackled trick-or-treating with tenacity and strategy. I plotted a map for maximum door knocking and allowed for a mid-evening candy drop-off to reduce weight. I cut across lawns to save time. I brought my manners and my jokes to the door and then sprinted off. I would’ve donned a new mask and doubled back to the houses that gave chips if my dad would’ve let me. At home, I’d lay the loot out and sort it in order of preference and expiration (because back then, we’d eat anything including the cling-wrapped brownie). I’d make my haul last until the following October 31.
Even as a kid, I was a planner and into spreading out the joy. Were you like me? Or were you like Mofo [my husband], hoovering your candy within the week?
When it comes to how we approach our money, some of our behaviours and habits are innate while others were learned. To be happy with your money, you need to understand what your default is and how you feel about spending, saving and risk.
Scott and Bethany Palmer, co-authors of The 5 Money Personalities, say our money tendencies are baked into us at birth. “We are totally convinced with all of the research that we’ve done that your money personalities are cooked into you,” she says. They identified five money personalities:
- Saver: You take pleasure in saving, in discounts, in spreadsheets, in being frugal.
- Spender: You have no problem parting with your cash.
- Risk taker: You’re a gambler. Driven by optimism, you like the thrill of the chase.
- Security seeker: You’re risk averse. Financial security and planning are your number one and two concerns.
- Flyer: You fly by the seat of your pants and don’t think too much about money. Often, relationships are more important to you than money.
Palmer says people are often a combination of two of these traits (a primary and secondary) and many times those traits can be opposing forces.
“We knew our kids’ money personalities at ages three and four. The way you can tell is the way they handle Halloween candy,” Palmer says. “A saver is going to want to save all of their candy. A spender is going to want to eat it all. A risk taker is going to want to trade it. A flyer could care less and give it all away. A security seeker is going to make their candy last a year.”
In addition to our innate money habits, we come from different families and histories and will inevitably learn about money from those influences. My dad meticulously plans our family finances and prizes security. He reads the fine print. He doesn’t take risks. He fretted about me going to Taiwan because I was risking my full-time stable job (stability in journalism, ha!). Meanwhile, he is generous with money and he will not scrimp on things that he enjoys. I remember an argument that my parents once had because my father bought the expensive toilet paper and my mom deemed it to be a waste. I vividly recall the anger and the declaration of what my dad’s butt deserved.
Conversely, my mom shops for sport. But she needs sales like she needs air. She will spend four hours in one store, looking for the best deal, and she considers her time well spent because she found a purse for 90% off. She’ll do anything to save money. She is infinitely creative — sewing clothing, bedding, upholstery, anything — to get beautiful things for less.
I am a sum of all of these parental parts.
Like my dad, it actually hurts me to gamble. I once received a free $10 voucher at a media event to bet on a horse race. Rather than lose (or win), I cashed out and spent the $10 on poutine for my best friend. And like my mom, I get off on discounts. I’ll eat the expired jam to save a few bucks and I would spite my ass with construction-paper-like tissue.
If you’re a security seeker, what will make you happy is putting money aside for your priorities. But don’t get so caught up in making sure that every plan is safe that you don’t act and you say “no” to opportunities. If you’re a flyer, you’re content and you’re not motivated by money, but as a grown-up, you need to think about money (you need to file taxes!) and looking up in the clouds could result in you falling into a money hole.
You have to know you. Then you have to work with that.
“Knowing your two money personalities and how they work together gives you clarity about your past; it gives you clarity about your present because you can think clearly about how to approach your money decisions and it gives you direction for your future,” Palmer says.
Too cheap for your own good.
Some of you are uber frugal. Even though that description sounds wonderful, like a smart, minimalist Ikea shelf, it might mean you are robbing yourself of joy by not investing in other priorities or hurting your relationships by being cheap. For hardcore savers, spending can also come with unnecessary pain. Every time we pay, it’s okay to feel a pinch, a sting, but not a cramp. We pay for a lot of things and if you fret every time, the surge of cortisol and other stress hormones through your body will have ill effects.
Here are a few tips to lighten the hit.
Every time you pay for something and you feel like crap, think of everyone who benefits from your purchase. If you’re buying groceries, feel gratitude about taking care of your family. Feel happy about supporting farmers and workers in your community. Feel proud that you’re buying from a mom-and-pop store or an ethical company. (Okay, if you’re shopping somewhere that employs underpaid children, then I can’t help you with this.) But feed your brain some positivity. Announce in your mind (out loud if you have no shame),
“This purchase is in line with my values.”
Designate a fun fund you’re comfortable spending each month that won’t compromise your larger goals. (More on this in an upcoming chapter!)
Adopt an abundance mindset as opposed to a scarcity mindset when it comes to your money. My entrepreneur friend Christa announces, “There’s more where that came from.” With the scarcity mindset, you become tunnel-focused on what you don’t have. You fixate on the short term because of your limited resources. The alternative is to approach things with an abundance mindset, the thought that the world is your oyster and there are enough opportunities, resources and successes out there for everyone. It builds confidence which inspires your behaviour, opens you up to look for new money opportunities and encourages you to collaborate with others rather than compete. There’s more where that came from, indeed.
Excerpted from Happy Go Money by Melissa Leong. © 2019 by Melissa Leong.
All rights reserved. Published by ECW Press Ltd. www.ecwpress.com