Do you deal with money in your household? Have you ever found yourself at odds with a family member or partner when it comes to money? Has that tension seemed like it started when you got together? There is more to the use of money than just what appears on the surface.
Why You Spend And Earn Money The Way You Do
In the same way personality and habits are developed over your lifetime, earning and spending habits have also been shaped over time. At first, parents and perhaps siblings provided insights as to how money was earned and used. Later on, friends provided an influence that was outside of the observations from parents. After moving out of the house and moving into the work world, there were additional influences on the earning and use of money. Over time all of these influences went into how you think about money, how you earn it and how you spend it.
A Few Examples
One man I knew was a workaholic. He had more money than he could spend even after buying nice things for himself such as a Mercedes sports car. He could easily afford to take time off from work and enjoy his wealth, but instead he didn’t take vacations and worked long hours from his teenage years until way past his retirement years. He always felt that he wasn’t doing enough and needed to work more.
My grandfather lived through the Great Depression and when I knew him later in life, he was always focused on how much money people made and how much something cost to purchase. This was an external influence as an adult (and husband and father) that had become very important to him.
He knew what it was like to not be able to find a job and to have very little savings resources to use. Even after he made enough money to live comfortably, he still invested that savings extremely conservatively so that he would never lose the principal.
Last weekend I was at a museum and someone from the volunteer’s organization for the museum had a table where they were selling raffle tickets. The cause was a good one (supporting the museum), but I did not buy a ticket.
Although one could consider this to be a donation, I couldn’t bring myself to support this cause. This is because I was taught growing up that gambling is wrong and is a waste of money. This has so colored my perspective that even when it is for a good cause, I don’t buy into raffles or 50:50s.
Learning To Understand The Why Instead Of The How
As you can see from the examples, there were reasons behind the money habits. These reasons can be developed from an early age resulting in life-long perspectives about money.
These perspectives are taken into the work place, into recreation and into relationships. This can result in disharmony between spouses or partners or other situations where money is earned or spent in common. Sometimes this disharmony is so great that counseling is required.
One woman tended to go shopping on Saturdays and although she would intend to just browse, she would often come home with clothes she didn’t need and having spent money she didn’t have resulting in high credit card debt.
She found that the reason stemmed from difficult family relationships when she was a little girl and her mother would give her money (or a credit card) and send her out on Saturdays to pick up a few things which she would then show to her mom. Her mom gave her positive feedback on the nice clothing. This was a bonding opportunity between this woman and her mother. Her shopping was related to a desire to retain memories with her now deceased mother.
One tool that can be helpful for understanding how money habits have developed is the Financial Autobiography. A regular autobiography is a document written by you of your life, whether it is very detailed or just highlighting parts of your life. Likewise, a financial autobiography is a written document of your life, but focused specifically on your financial life. Once written it can be a used to look back at your life history and determine what influenced you at different points in life.
If you have a significant other who you share money roles with, it can be very helpful to have both of you create a financial autobiography. These can be sources for conversations between the two of you to better understand why you have the money habits that are now exhibited by each of you.
There are two templates that I’ve come across that are focused on writing the financial autobiography. In both cases, these tools help direct the process by asking questions for you to answer. One tool is oriented toward someone of faith and includes questions associated with money and faith. However, the questions about faith can be skipped for someone who is not religious.
The other template is an entire e-book workbook that starts with an introduction to the process and provides places to write in your answers to the various questions. It also has examples to show how money has influenced other people.
Don’t Get Overwhelmed
If the thought of writing an entire autobiography is daunting to the point where you won’t even start, the key is to break it down into much smaller sections. Start with just answering the question, “How did your father handle money?” and perhaps “How did your mother handle money?” when you were as young as you can remember. After answering those two questions, set aside your work for the same time the next week so that you can develop a habit of writing each week until you are done.
Here’s how I might answer one of the questions. My mom always handled the documentation and I remember her sitting with receipts and a spreadsheet that she entered numbers into. I remember my dad being responsible for the bills and once a week in the evening he would get out the bills and the checkbook and write checks.
Once your financial autobiography is complete (and your partner has done the same if you have one), read through it with your partner and exchange information with either other from your biographies. Another helpful resource is a daily money manager who provides financial counseling. The daily money manager can assist both with a timeline for filling out the document as well as spending time reviewing the document and using it to set goals for changes.
The desire for money management changes may be strong, but going through a financial biography can help determine why you’ve developed those habits. By working through the emotional issues, the financial issues can be addressed with the knowledge of what may also need to be changed to get back on-track.