We are born into this world with certain predispositions, natural ways of thinking and acting. This is obvious when it comes to personality. Are you an introvert or an extrovert?
I bet if you spent 15 minutes with a group of five new people, you could fairly easily sort the introverts from the extroverts by the end of the conversation.
We often wear our personalities on our sleeves, so to speak, for all to see.
Similarly, we are also born with certain tendencies when it comes to money. Are you a spender or a saver? Like personalities, there aren’t just two types, but those two are the most notorious.
Here’s the problem: Unlike detecting a personality trait, it can be exceedingly difficult to identify the type of money mind an individual has. We often make educated guesses about people that turn out to be entirely unfounded.
Want proof? Meet Jane and Sue.
Both women are hard workers. Jane owns her own business and Sue is a top executive at the largest employer in town. Both women are well known in their communities, and both are considered successful.
Jane, the business owner, lives in a modest, ranch-style house on the edge of town. She drives a nine-year-old car, and her children go to public school. She and her family do not often take vacations, and when they do, they are usually to locations within one day’s driving distance.
Sue, the executive, just built a spacious two-story home a mile outside of town on 20 acres of land. She drives a brand-new SUV with shiny wheels, and her children go to private school. She and her family take one big vacation every year, flying to one coast or the other. And every three to five years, she and her husband travel internationally to a vacation spot.
Who is the spender and who is the saver?
From all outward appearances, Jane is the saver and Sue is the spender.
But appearances can be deceiving. What if Jane makes $100,000 a year in her business, and Sue makes $500,000 working at the largest employer in town?
It is possible that Sue is saving appropriately, but because of her high income, she can also spend what appears to be lavishly.
What if we found out that both Jane and Sue make $150,000 a year? Then, it would be obvious that Jane would be the saver with her more modest lifestyle and Sue would be the spender, right?
Perhaps. But what if we discovered that Sue’s husband is the beneficiary of a trust fund that pays him $250,000 a year? Wouldn’t that change the picture a bit?
And that’s the problem with judging people’s money minds. All we have to go off of is outward appearances. But that’s not enough to make an accurate judgement. For that, we must know their full financial picture, which is not typically public knowledge.
We all have certain peculiarities when it comes to money. No one has it all figured out.
The truth is, I’ve seen spenders successfully prepare for retirement, just as I have seen savers do it. And I’ve also seen savers with gobs of money who are miserable, right alongside those who are constantly looking to their next purchase for fulfillment.
There is no right way. There is no wrong way. Someone else’s right could be your wrong. And that’s okay.
After all, not everyone is an extrovert, either.