Knowing Your “Money Attitude” Helps You Plan for Your Retirement
Excerpted from How Much Is Enough? Balancing Today’s Needs with Tomorrow’s Retirement Goals (Wiley, 2005, ISBN: 0471738719), by Diane McCurdy.
The four Money Attitudes will help you understand why you are the way you are and the Attitude quiz helps you determine which one you are!
The Spender
Spenders love money for the things it buys them. They prefer to have something concrete like cars or trendy gadgets over having something as abstract as savings. “They enjoy having the newest ‘toys’ and are often the envy of their friends, much like the fabled Joneses,” McCurdy insists.
They can get into trouble when they spend everything they have – or more. This category of people has the most difficult time saving money. A spender who doesn’t pay off his monthly credit card debt, for example, may find himself on a very slippery slope toward bankruptcy.
Tip: Each month take out your allotted savings and expense money immediately. The rest is yours to spend however you wish.
The Builder
Builders see money as a tool. They use it (and sometimes risk it) to turn their dreams into reality. Builders receive joy from the creative process involved in their projects and may even work at mindless jobs just to have the resources to build their dreams. (They probably dream at work!)
Most entrepreneurs and corporate leaders are builders and they make excellent mentors because of their creative endeavors. However, they are prone to miscalculating the funds and risks that are involved in their projects and neglect to leave themselves a margin of error just in case.
Tip: “Developing a portfolio is a building activity,” McCurdy says. “Once Builders get interested in using their creativity here, they’re on the escalator!”
The Giver
Thank goodness for Givers! Society couldn’t get along without them, as they make up the volunteers, charity donors, and do-gooders of the world. They buy extravagant gifts for friends that they would never purchase for themselves and deny their own wants so they can give to others. “Givers put their time, money, and energy into what they believe in,” McCurdy writes. “Some of them view having money as almost a sin; therefore, the only proper thing to do with it is to give it away. They also find pleasure in making other people happy or in doing good.”
Givers tend to get in trouble because they may ignore their own needs. They also may hurt their children by not teaching them how to take care of money.
Tip: If you first take care of yourself, you’ll be better suited to take care of others.
The Saver
Savers are lifesavers. Without them, who would the rest of the world borrow from? Savers create a fortune in the bank very quickly, while still living a comfortable life, sometimes even on a tight salary. “Savers are great at spotting money-wasting activities and avoiding them without thinking twice,” McCurdy insists.
These types are organized and not impulsive buyers. They don’t like risk and require a cushion of savings for their own peace of mind. But they can be too conservative and often avoid investments that could actually make their money grow! They also may postpone enjoying their money for so long that it is soon too late.
Tip: Determine how much savings is “enough” to meet security needs while still allowing you to actually enjoy life along the way. Once you reach this number, keep your peace of mind but spend a little money on something nice that you deserve. Life is just too short.
Now you understand the four attitude types, take the quiz:
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