Why are some people better with money than others?

[BangBang]

@Anne_Neville

Or it may be that marriages between people with very different approaches to money are less likely to last than marriages between people with similar money styles.

I don’t know if this is true in general, and in fact our money styles are quite similar now, but my partner and I came into this relationship with completely opposite money styles. I was frugal to the point of obsession and he was extraordinarily generous and had some bad debt with a terrible credit rating.

To be fair, I was working my way through uni, supporting myself by working 3 low paying, casual jobs and studying full-time. I got a discount on my uni fees by paying upfront. It was around $8K pa - live in Australia and our unis are govt subsidised - but still a huge chunk of my savings and income. I really had to be a little bit obsessive to survive.

My partner spent money like it was going out of fashion, was constantly shouting his friends things like expensive meals and, because he never had money, had the perception that his spending was low, and that he was frugal. I think he thought that he was good with money because he could afford things like paying for nice restaurants, he really didn’t associate the downside.

I was monitoring my spending using a home finance package but could not convince him to participate, much to my frustration, he felt he was good with money - he just didn’t make enough… Eventually I just took a 3 month dump of his bank statements, split it into ingoings and outgoings, put it in a chart and showed him “this is what you make each month, and this is what you spend, and this is what I make each month, and this is what I spend”

He was soooo shocked when he realised how much he was really spending and he has pretty much let me run the finances since then (I am an accountant BTW). I don’t restrict his spending, he actually is pretty good with that, but if he starts going crazy I’ll gently let him know he needs to pull up and, after a little resistance, he does.

It’s definitely not a one-way street though, he taught me that it’s ok to spend money to increase your quality of life now, that you can’t delay all gratification. Without him I’d be living on baked beans in a shoebox, would never holiday, would rarely buy new clothes. I think I still have some stickers from when I was a kid which were “too good to use” (not a hoarder, it’s just a random sheet that got caught up in my filing) We do have a cleaner, once a fortnight - which is a quality of life thing and for us totally worth it. It costs a little over an hour of work (yes I do that too).

So I guess now I see balance as a good thing, and I do think we’ve both improved our quality of life through learning from each other. I guess you really have to be willing to learn though, if either of us had just dug in then there’s no way we’d still be together.

[Barrett_Bonden]

@Voyager

Maybe. But it is also possible that having more money will result in more expenditures. I managed to save money in grad school. What is he spending money on, anyhow?

I agree that within reason, one can usually tailor one’s lifestyle to one’s income.

My friend has always had expensive (and good) taste, so he spends more on day-to-day things like clothes and food than I do. Then there’s tuition, somewhat reduced by assistantships. He’s still paying off an SUV; his job requires him to be at work regardless of road conditions and roads can get pretty scary where he lives. His family leans on him when they come up short, and he feels obligated to help them out. And he’s a Mac person.

Even so, he seems to be at a “balance” now, not going into more debt. There will be large tuition debt in the next couple years, but a large salary at the other end. I feel pretty sure that since he reached equilibrium at his current condition, then he won’t have too much trouble managing when his salary balloons.

The spender mindset is still one I have trouble understanding, but I can understand the reasoning behind it, even if I would never be comfortable living it.

[Cat_Whisperer]

@Anne_Neville

<snip>
Don’t go shopping for fun or for something to do. Shopping should be something you do only when you need to buy something specific.<snip>

I would amend this to “Don’t go shopping for fun or for something to do unless you’re someone who can do it without buying stuff.” I’m like that - it’s a nice long walk for me to go to the local mall, so I go there for exercise, and then I look at all the pretty stuff, then I go home without buying anything.

@Voyager

<snip>
All excellent advice. We never pay full price for Starbucks beans - we wait for sales and then buy a ton. Supermarkets have sales cycle, and for nonperishables you can do very well following them.<snip>

They really do. I shop for groceries a couple of times per week (I walk there with my little cart), so I’m constantly checking the prices of things we normally buy, and I know when it’s time to buy and when it’s time to hold off for a little longer. It helps to have some storage room, too - when the peanut butter goes on sale two for one, it’s nice to have room to store that extra jar.

@Voyager

It just struck me that no one has mentioned budgeting. I think that keeping track of income and spending through Quicken or a spreadsheet could be very helpful in forcing oneself to face how much they are spending and where. <snip>

That can be a critical first step in becoming better with money - learning where you’re currently spending it.

@BangBang

<snip>
He was soooo shocked when he realised how much he was really spending and he has pretty much let me run the finances since then (I am an accountant BTW). I don’t restrict his spending, he actually is pretty good with that, but if he starts going crazy I’ll gently let him know he needs to pull up and, after a little resistance, he does.

It’s definitely not a one-way street though, he taught me that it’s ok to spend money to increase your quality of life now, that you can’t delay all gratification.<snip>
So I guess now I see balance as a good thing, and I do think we’ve both improved our quality of life through learning from each other. I guess you really have to be willing to learn though, if either of us had just dug in then there’s no way we’d still be together.

My husband and I are like that, too - he’s not bad with money, he’s just not as frugal as I am. He encourages me to spend a little and enjoy ourselves now, and I look at the long-term, big picture as well as the day-to-day and keep our rudder in the water.

[Eyebrows_0f_Doom]

I was taught to always pay off your credit cards in full each month. It always shocks me when people only pay the minimum. I treat credit cards exactly like cash. I buy what I know I can afford and always look for sales & bargains. And it’s not like that means thrift stores & cheapo crap. If there is something I want, I’ll just wait until it goes on sale or find it online for cheaper. For example there was a pair of Levi jeans I wanted, but I’d never spend $80 for jeans. So I just waited until they had their 50% off sale and got them for $40.

If you don’t have the “must have it now NOW” attitude, and know what you can afford, you’ll avoid most money related problems.

[Wesley_Clark]

@Dangerosa

But is that what he wants? More free time? And is that available to him in his career? Or is that what you would do if you were him? And, are you completely aware of all the variables in play for him?

Often, folks his age are scared to death of retiring before they need to. I’m scared of it and I’m a lot younger. I’ve watched the market crash three times - and take years to recover - but I’ve seen booms as well. I’ve seen my grandparents get $.30 on the dollar for their pensions when the companies they worked for went under. I’ve seen $1500 a month medication bills after Medicare for my grandfather. I’ve seen my mother return to work in order to be able to afford “luxuries” like visiting my sisters out of state (and because, it turns out, being retired is BORING). And I’ve watched our government demonize Social Security, not do COLAs, and leave Seniors high and dry.

From talking to him he wanted more free time. But he wasn’t able to find affordable health insurance to make it happen. And he was locked into a job since he couldn’t find another one that offered the wages and benefits he was making.

Either way, living broke is a crappy way to live but so is dying rich if you denied yourself things you wanted or causes you believed in when you were alive.

[perfectparanoia]

@Anne_Neville

Or it may be that marriages between people with very different approaches to money are less likely to last than marriages between people with similar money styles.

Alternatively, one of the main reasons (aside from my personality and stunningly good looks) my husband married me is because he was very aware of his terrible financial habits.

He looks at the ability to let me take care of the money as one of the benefits of being married to me. (Much like his ability to reach tall shelves is one of mine.)

Honestly, he has more toys now (living on a budget without any real money to call his own) than he coudl afford before we got married. I keep us focussed on the things we really need which gives us money for some of the things we want.

[Anne_Neville]

@perfectparanoia

Alternatively, one of the main reasons (aside from my personality and stunningly good looks) my husband married me is because he was very aware of his terrible financial habits.

I’d believe that a marriage between people with two different money styles can work in some conditions:

1. If each spouse grants that the other’s approach to money might be valid, at least in some conditions.

2. If they agree that one spouse will handle the finances, and the other will just go along.

Still, money is one of the top causes of marital fights.

[Anne_Neville]

@Cat_Whisperer

I would amend this to “Don’t go shopping for fun or for something to do unless you’re someone who can do it without buying stuff.” I’m like that - it’s a nice long walk for me to go to the local mall, so I go there for exercise, and then I look at all the pretty stuff, then I go home without buying anything.

As long as you’re willing to be honest with yourself about whether you really are someone who can shop for fun without buying stuff, or if you just think you are. That includes not buying stuff while on the actual shopping trip, but the shopping trip makes you want to buy more stuff online later.

Being able and willing to be honest with yourself is something that will at least be very helpful, and might be required, to be good with money. Being willing to take a good look at the evidence (as shown by a credit card bill or other objective source) of where you’re spending money and act on it even if it goes against your feelings about your spending couldn’t hurt, either.

[perfectparanoia]

@Anne_Neville

I’d believe that a marriage between people with two different money styles can work in some conditions:

1. If each spouse grants that the other’s approach to money might be valid, at least in some conditions.

2. If they agree that one spouse will handle the finances, and the other will just go along.

Still, money is one of the top causes of marital fights.

We’re 2. We haven’t had many arguments about money.

[Nava]

@Voyager

It just struck me that no one has mentioned budgeting. I think that keeping track of income and spending through Quicken or a spreadsheet could be very helpful in forcing oneself to face how much they are spending and where.

Or a notebook; I can pinch pennies until they squeal (another one who managed to save while in grad school), but part of the process is to jot down everything I’m spending, and I mean everything. Yes, buying a box of chewing gum counts too, jot it down. Once I’ve done it for a couple expense cycles I’ve identified where my money is going and I can stop doing it.

Like those keeping a food diary, sometimes you discover that you’re spending a lot on small things.

Also, sometimes an item which would improve your life means a big change in your expenses: having a car is nicer than borrowing your landlady’s, but it costs a lot more. Figuring out which of the things that improve your life give better bang for the buck helps a lot when you’re having tight times.

[BangBang]

@Anne_Neville

I’d believe that a marriage between people with two different money styles can work in some conditions:

1. If each spouse grants that the other’s approach to money might be valid, at least in some conditions.

2. If they agree that one spouse will handle the finances, and the other will just go along.

Still, money is one of the top causes of marital fights.

We’re number 1 & 2! We have an unusual arrangement, we split shared expenses (rent, bills, car expenses) and I track our individual in and outgoings which gives us each a running total of our personal equity in our shared assets (which is everything.)

We have a formal, documented agreement about what to do in the event of a relationship breakdown - entered into to protect my partner when the house went into my name alone, also because I brought significant savings into the relationship.

Effectively we treat our relationship like a partnership, most people think this is a bit ruthless, but we rarely fight at all, and even more rarely fight about money - if he wants to blow $500 on a big night out with his mates? That’s fine, it’s his money, I want to buy another pair of shoes? No problem.

I’ve been tracking my own spending for my entire adult life so it’s not a lot of effort to extend it to my partner and it keeps us focussed - it’s great seeing our net worth rising every month!

[jeffersonfaudan]

Everyone likes to have nice things… who doesn’t? I still envy nice stuff i see… i still get them BUT i wait after the “hype” is over… i may be a bit “delayed” but still, i get to enjoy it and get the item at half or even quart its price… it’s a matter of how you perceive things… before i purchase stuff, i always ask myself, “am i buying this because i needed this?” or “am i buying this because i need to feed my ego” and this often applies to things that are non-appreciating items such as clothing, gadgets etc… but then there are those times when i REALLY REALLY WANT IT so i go for the “can i get this in a wholesale price somewhere?” and after the search is over and i couldn’t find it at a price i am willing to pay it for, i give up and move on an return to the idea of “after the hype is over”

my family has taught me to ONLY purchase things that has a “resale value” and a “appreciating value” … resale value is, you still can sell the item in a lower price so you still get at least half the money you spent for while “appreciating value” are things that becomes even more expensive overtime…

back when i was a kid, my classmates would have pringles for snacks and i don’t, my mom rather provides me sandwiches which at times i trade to classmates i know have a snack that i want and they don’t… so that’s probably how i earned my trading skills through subconscious learning… well, of course there was a point when i envy bringing those pringles to school myself, so i would slip it to the grocery counter, but my mom at an early age would ask “how much are these?” and i’d give her the price… then she’d respond, “is there any difference from that certain potato chips you used to get?” and i’d say “no… only the slices and some added spices” so she’d say “return these and get the same number of value for those chips you used to purchase according to the equivalent price tag price that’s stated on your previous choice of chips”. so, somehow in an early age, i was taught that when i want something, i always have to look for an alternative that would be cheaper without compromising the quality despite having to cut on some corners… as she used to say, “if you want those chips to turn sour and cream, dip it in mayonaise”