Monique Young has been the co-owner of an upscale hair salon in southern New Jersey for four years. Business is great, but her relationship with money is anything but. “I overspend a lot,” admits the 31-year-old single mother. “I have a fetish for handbags and a high credit card balance to prove it.” She blew so much cash during a recent shopping spree that she had to take out a payday loan to make her mortgage payment.
“I love treating myself to nice things. The money gets tight sometimes, but I always land on my feet.”
Everyone has different philosophies when it comes to money. Some scrimp and save, while others squander their dough the first chance they get. “It’s just the way we’re wired,” says financial expert Julie Stav. “It also goes back to our childhood. The silent messages we got from our parents as children play a role in our relationship with money as adults.” In her book, The Money in You!, Stav invites readers to use the characteristics of their financial personality to build a better life. “It’s about being aware of how you relate to money and using the information to make better choices,” she says.
Here, Stav offers insight into the patterns and habits of three familiar financial personality types—Splurger, Penny Pincher and Givealista. If any of these behaviors hit close to home, Stav suggests ways in which you can tighten up your finances.
Strengths: Clever, goal-oriented; superb networker; sees the glass as half full
Weaknesses: Lives a feast-or-famine lifestyle; overspends; masks her weaknesses by buying things she can’t afford.
Mentality: “I work hard for the money, so I should be able to spend it on whatever I want.”
Lifestyle: The Splurger usually has to borrow money from a relative because she overspends at the mall on payday. She’s a slave to the image she feels she has to maintain. She shops to fill a void and usually has a closetful of clothes with the tags still on them.
Solution: Set aside cash for frivolous spending. “As women, we know how to work for our money, but we don’t know how to make our money work for us,” says Stav. “The Splurger needs to dedicate 10 percent of her income to what I like to call a diva account. It’s money just for her to spend however she likes. Women need to have emotional spending funds, because without that, we feel desolate and destitute.” While the Splurger works on building up a nest egg, Stav suggests that she sell the clothes she no longer wears. “She can use the extra cash to start buying a few shares of stock; then she’ll see how investing is as sexy as spending—or more.”
Strengths: Very organized; understands details and is a mastermind at creating budgets and goals.
Weaknesses: Programmed to be more afraid of losing than excited about gaining; bypasses great moneymaking opportunities
Mentality: “No one is going to take care of me, so I have to take care of myself.”
Lifestyle: Holds on to every dime and rarely spends extra money to go on a vacation to unwind or see a movie with her girlfriends. She never considers investing out of fear that she’ll lose money. She’s typically anxious in situations when her budget isn’t balanced or she might overspend.
Solution: Enjoy your money. “The Penny Pincher is so scared to spend money that she really shortchanges herself in life,” says Stav. “This woman needs to understand that there are places you can have guarantees like annuities and Treasury Inflation-Protection Securities, where you can put your money safely, and you’ll keep up with inflation.” Stav also recommends that you write out a wish list of all the things you want to do and work with an accountant to do some projections. “She needs someone to show her that her money is going to last as long as she is—or longer.”
Strengths: Stellar visionary; speaks from the heart; keeps companies on their toes
Weaknesses: Always puts herself last; has a messiah complex
Mentality: “I want to help everyone.”
Lifestyle: Will give her last dime to help a family member pay her rent instead of using the money to sock away extra savings; finds joy in manipulating her finances so she always has enough for others while sacrificing her own financial needs.
Solution: Just say no. “Givealistas need help saying no,” insists Stav, “and the best way to do that is by tying up their money into a oneyear CD or an annuity. This allows her to tell the person asking her for money: ‘I can’t take that money out because then I’ll be hit with a big penalty.’” Stav suggests setting up an automatic payroll deduction to keep from being tempted to give the money away. “It cannot go through her hands or it’s going to go into someone else’s,” she says. “Being self-sufficient should be her number-one goal. Women have to start putting themselves at the beginning of the line. You’re not being selfish by doing that. You’re giving yourself the place you deserve.”
Figuring out who you are moneywise and how your personality relates to your spending habits is a necessary step in the journey to taking care of yourself from the inside out—financially or otherwise.