What makes someone financially astute and others just hopeless? Can a financial wizard be trained or are they born that way? When considering these questions it helps to ponder people you know who are fi-nancially aware.
The real question is whether our financial personality is burned into our DNA or whether we can change our attitude to making, saving and spending money
I was considering this question and initially realised that many people who are ‘careful with their money’ (I don’t want to say mean) had a tendency to be born around the end of March, early April.
Before all those who are born around that time start sending e-mails, I am generalising here. However, I know a number of people with these birth dates who are extremely thrifty, who are savers and very money aware.
Alternatively, those who have lived through hard times, in particular through the war years and times of depletion, tend to be thrifty, not only with money but with food, material goods and the needs of life in general.
Compare this with a younger generation who has had mostly what they wanted throughout their lives. They have never experienced depletion of food, goods and material items, and note how money has no true value to them in terms of saving for that desperately desired item.
In general they can usually have something more or less immediately. The concept of saving over a period of time is alien to the younger generation.
Usually because if they had to save for a year for the latest IT product, it would be out of date by the time they bought it.
On that basis, could life experience cause someone to be financially astute, turning them into savers and making them financially a-ware and ultimately better off financially?
Another example is children of wealthy and celebrity couples.
We see a couple who has come out from a poor background, work hard and built a successful company, career or empire.
The resultant children are then given material items beyond anyone’s wildest dreams, never having had to work for them. Is this good for the development of the child and does it instill a culture of understanding value?
Alternatively, where do accountants come from? There is no doubt that people who work in the financial market do so because they have a leaning towards this type of work. Those who are artistic have a gift which they are born with, probably in the same way; those who excel with figures are also born that way.
To identify children with a financial personality, looking at the way they play games is a good guideline. How did you, or do, you play Monopoly for example? It is possible to observe those who are born bankers, negotiators or those with a competitive spirit.
In his book Where’s my money? 10 sure-fire ways to keep, earn and grow more money, Jason Cunningham identifies a number of different investment personalities, based on the characteristics of birds.
Ostriches bury their heads in the sand and don’t want to know anything about money or its impact on their lives.
Chickens represent the average Joe or Jill. They might be able to pay off the mortgage and their credit card, but they never really get ahead.
The laughing kookaburra is way too busy having a great time to bother about money.
Kookaburras are focused on the here and now and think worrying about money is for the birds.
Peacocks love to show off their money. They can be reckless and love spending money on flash cars and expensive clothes. But even though they’re earning money, they’re not spending it in a way that’s going to generate income.
Eagles take a long-term, big picture view of their finances. They can see into the future and understand the importance of putting a little aside now to support a more comfortable lifestyle when they stop working.
Magpies save everything they earn just in case they need it down the track.
It’s fun to try to pick which bird you are. But the real question is whether our financial personality is burned into our DNA or whether we can change our attitude to making, saving and spending money. I suspect it’s the former not the latter. When I look around me, I see very few examples of people who have gone from being a spendthrift to a saver – or vice-versa.
There is a train of thought that says the way we behave financially is a product of our intrinsic nature and our environment. So if you were brought up in a family of financial risk-takers, you are also likely to be a financial risk-taker. But if you’re brought up in a family that’s financially conservative, that’s how you will behave, too.
Speaking from personal experience I know someone who was brought up with a parent who was not a financial risk-taker, saved every penny, and was extremely careful with money.
The child grew into a massive risk-taker, huge spendthrift and total opposite to his parent. So what do you think? Can you change the way you approach money? Or are we stuck with the financial personality we’re born with?
kathryn@maltanet.net