How your money management plans
reflect your goals and personality
are key to their success
Palatable financial planning
starts with knowing your
own fiscal personality
FIRST OF THREE PARTS
She's the kind of person who drives 15 miles out of the way to save 3 cents on a tank of gas. While he used to a retailer's dream, the sort of shopper who would find a shirt he liked and buy the whole clothing line.
Their financial personalities didn't initially mesh, but Glenn and Heather Morrill of Pearl City have learned that it's possible to set a budget and stick to it despite having varied spending and savings styles.
Of course, it's no fun, said Susan Olson, editor of ihatefinancialplanning.com, and that's why most people choose Glenn's earlier method and take a procrastinator's approach to financial planning.
"Budgeting involves getting on top of how you are spending your money and that knowledge will have consequences," Olson said. "It's no fun and most people put it off because of fear of the unknown, but it's a very productive tool to help get your financial life in order."
A person's money style affects whether they are a diehard budgeter like Heather or somewhat of a procrastinator like Glenn, and opposed to intense budgeting. The two represent opposite ends of the spectrum, but a good budget can complement both of their personalities, she said.
"Someone who likes to fly by the seat of his pants might put his budget on a scrap of paper," Olson said. "Someone else might build an intense software program devoted to finding every penny. There has to be a relationship between your personality and what your budget might look like."
Setting a budget works, even for procrastinators, if it is tailored to meeting their needs, said Judy McCorkle, senior financial planner for Financial & Investment Management Group Ltd. based on Maui.
GEORGE F. LEE / GLEE@STARBULLETIN.COM|
Heather Morrill and her son, Foster Morrill, show off the 2-year old's bedroom, which was designed by Heather and executed by her husband, Glenn Morrill, with hand-made furniture and accents.
"You have to be honest about your values and goals and how far you are willing to go to cut costs," McCorkle "I've yet to meet anyone that could stick to a budget that didn't fit their personality."
Couples like Glenn and Heather are ripe for financial clashes, but a budget might provide a point of discussion to understand where the other person is coming from, she said.
There is so much dysfunction surrounding money, that financial planners often joke that it has a greater potential for conflict than sex, McCorkle said.
People commonly fall into about nine different money personalities, identified in Kathleen Gurney's book, "Your Money Personality" including: entrepreneurs, hunters, highrollers, safety players, achievers, perfectionists, money masters, producers and optimists, she said.
People who can identify their money type will be able to see where they are conflicted about money and can use this information to set financial goals that they can live with, McCorkle said.
"It's really funny how this worked out, but the fact is, I found that I had more money after I got married and added more responsibilities," said Glenn, who acknowledged he grew up in the kind of home where money was no object and had trouble adjusting to his adult means.
Before the couple got married, the now 28-year-old fire control technician was a young U.S. Navy sailor with few bills and even fewer dollars in his pocket because carefully managing his money wasn't one of his priorities, he said.
"In my single days, if I'd blown all my money before pay day I'd curb expenses by sitting in my room and watching TV and eating my meals in the galley," Glenn said. "A week before payday, there was always a whole group of us just sitting around."
Then Heather, who was raised in a more economically conscious Satellite Beach, Fla. home., came on the scene and everything changed.
"My grandmother raised me and I grew up in a very frugal home," the 30-year-old music teacher said.
Heather's grandmother, Gloria Rogers, had been a stay-at-home military wife with five children to raise, and while they had everything that they needed, the family always was conscious of how they spent their money, she said. Rogers made most of Heather's clothes, taught her to cook from scratch, and to reserve credit cards for emergencies.
"We were just really economical," Heather said. "Whenever we went out to eat, I'd always try to find the most reasonable item on the menu. I never had lobster until I married Glenn. It just wasn't something that my family would have bought."
Heather's grandparents had pre-paid her college tuition to the University of Florida, but the drama major had to come up with room, board and other living expenses herself.
"I was completely scrapping by," she said. "I survived on Ramen noodles and Pop-Ice for about a year, before I found ways to cut expenses."
It was during her college years that Heather learned how to comparison shop and identify deals. She also learned to use coupons and how to take advantage of happy hour specials -- getting a dinner of free pupus for the price of a coke.
"They can't require you to buy an alcoholic drink," she said. "I'd order a $1 soda and eat all the appetizers that I wanted."
Imagine her shock when she and Glenn went out and he ordered whatever he wanted to eat off the menu, regardless of price.
"I just didn't understand his way of thinking," she said.
And, initially it was hard for Glenn to understand why saving a few dollars on food mattered. He didn't get the concept, until he left Heather in Bremerton, Wash., to go on a three-month submarine deployment. He returned to find that without his spending habits dragging them down, she had managed to save $2,000.
"I'd never had so much money in a savings account before," he said. "I couldn't believe it."
As they say, money talks, and the rest is history. Suddenly, Glenn could find several thousand reasons why Heather's tight financial plan had a purpose.
"Budgets don't work unless they are aligned with someone's values and in the case of a couple, a budget has to reflect the values of both or it will get sabotaged," McCorkle said.
By adopting a budget that they can both live with, the couple has expanded their net worth along with their family, which now includes 5-year-old Emory and 2-year-old Foster.
Glenn has learned the concept of waiting for a sale to make a purchase and has even gotten so coupon savvy that he's agreed to make a pit-stop at the airport to pickup an Oahu Gold discount book before going out to dinner.
"He's learned that if we only have to pay for one meal out instead of two -- it means we can go out more often," Heather said.
And Heather has learned that sometimes its OK to splurge. She's investing in her education by taking online graduate classes with the computer she agreed to let Glenn purchase last year.
"It took me five years, but we're making progress," he said with a grin. "I finally convinced her that a computer was a sound purchase."
Glenn and Heather are the first to say their budget wouldn't work for anyone else, it's tailor made to fit their personalities.
Glenn couldn't do without soda so Heather, who thinks those kind of drinks are a waste, compromised and acknowledged that their budget could accommodate the lesser priced 2-liters. The budget also includes entertainment for the family; but the couple supplements that category by taking advantage of coupons and promotions like kid's eat free night.
And since the family likes to dress nice, they don't rule out shopping at their favorite name brand retailers.
"We just wait for the sale," Heather said.
Budgeting to suit personalities is exactly like dieting, McCorkle said, it won't work unless the parties commit to making a change in lifestyle and the use of their resources.
"You can't just have a budget that makes sense on paper, it has to fit your lifestyle," she said.
BACK TO TOP
Knowing your financial personality is key to coming up with a long-term spending and saving system.
Have successful careers. Are highly motivated. Might not necessarily be good with money.
Involved with money management and investing. Like conservative low risk investments. Practical. Don't believe money equals status.
Like the thrill of risk. Are emotionally driven. Enjoy spending rather than saving. View money as status.
Passive with money. Feel out of control, but aren't worried. Believe their money situation is due to outside forces.
Anxious and worried about money. Critical of their financial decisions and those of others.
Frustrated that their hard work hasn't brought financial success. Have difficulty asking for what they want or need. Find value in accommodating others.
Successful in accumulating assets. Confident and content with money. Trust their money decisions.
Avoid risk. Enjoy emotional spending. Use money as a reward
Content with their financial situation. Want somebody else to handle their finances. Believe no matter what happens everything will be fine.
Source: "Your Money Personality," by Kathleen Gurney
About this series
Tomorrow: Making small changes in spending habits can pay big dividends toward retirement or other goals.
Tuesday: Socially responsible investing lets you put your money where your mouth is.