What’s Your Fiancé’s Financial Personality?

Whats Your Fiances Financial Personality Header ImageIt’s wedding season! And while that means wedding planning (for those about to tie the knot), it should also mean taking some time to get your budding family finances in order.

One way to approach the issue is to learn more about you and your fiancé’s financial personality. These are the basic sets of behaviors that define your relationship with money, and they can offer important clues as to your loved one’s hopes, beliefs, worries, and even bad experiences.

Just remember, personality is only the beginning. There are no simple answers or solutions when it comes to integrating your finances. That’s why it’s so important to take the time to talk not only about the quirks of your money personality, but the fears, emotions, and dreams that might come with it.

First and foremost: Remember that money is often related to emotion

It’s important to note that one critical aspect of most money personalities is how we experience and handle financial anxiety.

Each of the financial personalities has a potential source of stress and worry underpinning the behavioral pattern. While it isn’t a certainty that you (or your fiancé) have any particular concern, talking about your money personality can help to foster bigger discussions about what you fear, how you cope with it, and how you might work together to manage your money in the future.

After all, if you can convert money from a source of potential stress to a foundational element of your bond with your partner, you can help avoid some of the major conflicts that arise over the course of managing a joint financial life.

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The Money personalities

The Social Spender

Slogan: “Drinks all around!”

Strengths: Generous…

Weaknesses: …To a fault

Social spenders love to splash out on their families, friends, and even strangers – this is the person who likes to buy gifts “just because.” Your social spender will never let a friend pay for their birthday dinner and will tend to make sure your kids get the presents they’ve secretly (or not so secretly) been longing for.

This can obviously be wonderful, but social spenders can get into trouble if they let their generosity take charge of their finances. Sometimes, their focus on others can lead them to forget to focus on themselves.

Potential sources of anxiety underlying this personality could involve fears about being lovable or fitting in. It’s also possible that the generosity is part of a desire to be the recipient – maybe your fiancé (or you!) utilizes gifts as an expression of love, and would be happy to cut back if you stepped in and offered more “thinking of you” surprises.

The Ostrich

Slogan: “If I can’t see it, it doesn’t exist.”

Strengths: Does not react to down markets – because they don’t want to know about it

Weaknesses: Might avoid financial problems until they’ve become unmanageable

Ostriches don’t really want to deal with money. This personality is more likely than any other to “forget” to open bank statements and other financial correspondence. When markets go up, they may be happy to talk about it, but when markets go down they’ll typically refuse to log into their accounts.

That has major pluses – a lower likelihood of selling everything when markets fall is a big one – but on the other hand, a refusal to deal with financial stresses or questions can result in a growing pile of problems, particularly if your budgeting or saving aren’t where they should be.

A feeling of financial intimidation could be a cause of ostrich-like behaviors, as could more general concerns about feeling competent or even powerless. It’s important to talk about these feelings so that you can develop a plan for working together when financial issues arise – just knowing that there’s a “process” in place can help to allay some of the fear and stress.

The Field Marshal

Slogan: “I’m not micromanaging, I’m managing!

Strengths: Will never overpay on a mortgage

Weaknesses: Could end up tinkering a portfolio into oblivion

The field marshal always knows exactly how much money is in the bank and what percentage of the portfolio is allocated to equities. They can tell you their credit card APR and have probably recently renegotiated the mortgage.

Field marshals are fantastic for keeping on top of the details, a trait that’s sometimes highly appreciated by those less inclined to take the lead on family finances. However, they could be at risk of going overboard – especially when it comes to portfolio management. Chasing returns or moving in and out of positions too frequently can have the opposite of the intended effect by racking up fees and realized losses.

Sources of anxiety around this pattern of behaviors could be a need for control or a desire to avoid mistakes at all costs. Talk through these issues and about the importance of utilizing this management skill instead of becoming a slave to it – that could mean developing a proactive strategy for when and how to deal with issues like downturns.

Whats Your Fiances Financial Personality Info Image

The Saver 

Slogan: “See a penny, pick it up – and put it in the bank!”

Strengths: Fabulous commitment to and patience for saving

Weaknesses: Overly cautious approach may undermine some of the benefits of those good habits

Savers are, well, amazing savers. With or without a large salary, savers can often accrue immense bank balances through sheer attention to spending alone. Their appreciation for the art of the long game when it comes to money can also make them great investors – patient and willing to let time do its work.

But there’s also a downside to being too careful: keeping all your money in the bank might make for a stronger feeling of safety, but over time inflation will tend to erode the value of your cash. It’s also not a viable long-term plan if you need investment returns to help fund your nest-egg in the future.

Talk about what’s underlying the behavior – was it a financially precarious childhood, perhaps, or maybe a desire to avoid taking any unnecessary risks? You might want to discuss the pitfalls of conservatism and how it could make sense to diversify – or spring for a family vacation. Methods to allocate some of your money to goals other than pure saving can, in this situation, be an important part of the conversation.

The Gambler

Slogan: “Risky, you say? I’ll take five!”

Strengths: Can utilize the ice-water in their veins to take lucrative calculated risks

Weaknesses: That same ice-water can also bring the shock of unnecessarily significant losses

Gamblers love the thrill of taking a risky investment and the rush of earning a payoff. Whether an entrepreneur or not, Gamblers can be visionary in spotting new opportunities and mercenary in their ability to handle risk.

Unfortunately, gamblers can sometimes let that vision get in the way of the downside assessment – and their confidence can get in the way of their clarity. This means a risk of significant losses and a volatile asset base, which can be incredibly stressful for family members and loved ones.

If it’s the adrenaline rush that underlies this behavioral pattern, it’s important to find more appropriate outlets – or a set of sturdy guardrails for your family assets. But there could be more: a deep desire for material success, a need to impress, or even more existential concerns about everyday life. Talk through it to see where you can make allowances and how you can still provide some stability.

Next steps

You might recognize yourself or your fiancé immediately in reading this, or you might see yourself as more of a combination of traits.

In either case, the underlying message here is the same: start talking – before the wedding.

This is important whether or not you and your fiancé share a money personality – in fact, it’s even more critical if you’re on exactly the same page because you won’t naturally start to compensate for each other’s weaknesses.

Talk about your money tendencies, where some of your behaviors might be coming from, and what you can do to work together to manage your money. As tough as it is at first, finding ways to work with your tendencies is typically much more sustainable than trying to ignore or work against them.

And now that there will be two of you, it’s even more critical to get started.

First came love – but have you thought about the baby carriage?

For many couples, the first major joint financial undertaking isn’t a wedding – it’s a baby. Between diapers and dependent status, there are a significant number of financial changes that come with being a parent. Are you ready?

Download Making (Financial) Space for Baby: A Guide for New Parents, our free guide for new and prospective parents. It covers everything you need to know about preparing your finances, and your financial life as a whole, for a wonderful addition to your family.

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A new baby is the start of an incredible journey – one that usually involves more than a little personal growth.

Let Us Help!

We can discuss this topic and more at a complimentary appointment. As a bay area retirement planning coaches, we can give you a review and make suggestions based on your retirement objectives.

Whats Your Fiances Financial Personality Infographic

Important Disclosures

The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by United Planners.

To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk.

Neither diversification nor asset allocation can ensure a profit or prevention of loss in times of declining values.

Further reading

For more on the benefits of the “ostrich” approach, please see: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2339287

For more on over-trading and over-confidence, please see: http://faculty.haas.berkeley.edu/odean/papers%20current%20versions/doinvestors.pdf