Where Our Finances Go: Blending Financial Personalities

In our years of marriage, Husband and I have determined that our financial "personalities," while quite different, are compatible. Since he was a philosophy major in college, one outgrowth is that we are both conscious of how our worldviews shape what we do with the money God provides through work and gifts. How have we blended our two personalities in this aspect of married life?

How Do People Deal with Money?

I grew up in a debt-free, no-credit-card family, with parents with opposing money personalities. So, that clash influenced what I heard and what I internalized in childhood in terms of what my money values turned out to be.

Financial Personalities

There are quite a few classification systems for financial "personalities." I've highlighted a few here: 

Investopedia and Refinery29 say 5:

• Big Spenders/Risk-Takers = spend a lot, don't search for bargains, risk-tolerant in investing
• Savers = opposite, debt-free, "frugal", risk-averse in investing
• Shoppers = get a dopamine hit from buying anything, variable investing
• Debtors = owe a lot, don't think about or track their money
• Investors/Planners = looking to retire eventually on passive income, risk-medium in investing

Myers-Briggs 4-type classification:

• Confident Money Manager = long-term steward with good abilities
• Short-term Strategist = careful steward but doesn't keep up over time
• Value-based Planner = views money as a tool for other ends
• Laid-Back Balancer = feelings over plans, applying money to other ends

Ken Honda's 7-type classification:

• Moneymakers = life goal of accumulating money in various forms for its own sake
• Worriers = generally well-off but never not anxious
• Compulsive spenders = apparently 73% of the population
• Compulsive savers = fearful, not necessarily investing
• Gamblers = addicted to risk in any form
• Indifferent-to-money = happy, not noticing influx or outflow of money, delegating money management to someone else
• Saver-splurgers = saving first, impulsively spending at other times

I would classify myself as a Saver, somewhere between a Worrier and Compulsive Saver. I don't see any Myers-Briggs category wherein I fit because each of their categories assumes that one invests outside of regular bank-based savings accounts, which I don't. Husband, meanwhile, fits in the Shopper and Indifferent-to-Money categories.

Dave Ramsey?

Growing up, I attended one or two Dave Ramsey-based workshops. After completing my physical therapist education, I've been in a good place for a number of years where applying his 7 Baby Steps toward personal financial freedom makes sense. Here they are! 

1. Save $1k for emergency starter fund
2. Pay off non-house debt using snowball (smallest to largest) method
3. Save 3-6 months' expenses in emergency fund
4. Invest 15% of household income in retirement
5. Save for children's college fund
6. Pay off home early
7. Build wealth and give

A Forbes article provided some points of agreement and scrutiny:

• You need a budget--agree. However, most people don't implement it well enough to *not* live paycheck to paycheck. Budgeting can backfire because it may encourage more spending to match anticipated expenditures.
• Get out of debt--don't give banks more money than they "need": agreed. However, sometimes debt is wise as a stepping-stone for investment.
• Live below your means--agreed. However, there are two ways to do this: reduce expenditures and/or increase income.
• Save money--agreed, but also offer valuable products/services to others. "Bottom line: savings doesn't equal wealth. It equals stewardship."
• Be generous--agreed, but don't wait until you're out of debt to get into that mindset/habit

Suze Orman?

A good friend of mine, retired several years into our friendship, is a big fan of Suze Orman. Since she is approximately as much a household name as Dave Ramsey, to my knowledge, it's worthwhile to include a bit about her in this post. 

Suze's 10 steps to retirement resemble and expand upon Ramsey's 7 baby steps:

1. Live below one's means
2. Ensure vehicle(s) are a combination of cheap and reliable
3. Critically evaluate support for adult children
4. Talk about money across generations
5. Consider downsizing
6. Pay off mortgage if it's a sizable amount of anticipated retirement outflow
7. Convert traditional to Roth accounts
8. Consider long-term care insurance
9. Wait as long as possible before receiving Social Security payouts
10. Purchase good annuities for passive income

Advice Orman has given that MoneyWise has criticized:

• Don't pay for conveniences (e.g., grocery delivery) - she values money-in-hand over time-in-hand
• Don't aspire to retire before 70 - she values working longer and having more accumulated before post-retirement life expectancy
• Claims erroneously that potential employers look at credit scores (whereas legally they can look only at credit reports)
• Make at least minimum payments in all cases - one exception should be someone who is making less-than-minimum income and needs to prioritize food and shelter
• Always have a Roth IRA - in reality, some groups may benefit more from a traditional IRA
• Always help a parent in need even if it compromises your own retirement funds - in reality, see if other resources (Department on Aging, etc.) are available first
• Always choose more active investments - in reality, this encourages more risk taking than is warranted for most people

What is Our Blended Philosophy?

As I mentioned above my financial personality is strongly biased towards saving. Husband's personality, meanwhile, is between Shopper and Indifferent-to-Money. Over time, we have discussed and practiced enough habits to make a blended philosophy that works for us.

How do we Manage Money?

Because I think about money more, and am more productive than he is when task-switching and detailed work are involved, I set up and handle the majority of money tracking and bill payment, as well as moving income into various savings accounts or additional mortgage payments. As much is automated as possible (HSA contributions, retirement savings, college savings for Child, mortgage, utilities, tithe).

When we have individual or family expenditures that we want to make, we talk early about the principle behind the purchase and, if it's large, make sure we have enough accessible funds to pay in cash. While we do have individual credit cards, we pay them off in full each month and thereby earn points or dollars.

One change since marriage, besides paying off all debt except for mortgage in full, has been to gradually increase our tithe each year. We are now at 10% for 2024, and the more we tithe, the more God provides for us.

What are Our Financial Goals?

I lean toward Orman's mindset of retiring as late as possible, not only for financial reasons but also for life satisfaction. I enjoy my work and staying involved, and it gives me satisfaction to produce things (intellectual property, etc.) that help others. Husband, if he had his druthers, would read and write for a living, which is guiding one of our long-term goals.

Currently, we are balancing early payoff of at least part of our mortgage with maintaining a 10% tithe with maintaining a level of cushion and preparing for an eventual transition to a single-income household. We plan to homeschool; and while that can be done with two full-time working parents, it is far easier (and cheaper childcare-wise) to have only one parent working full-time. The next few years are a patient waiting game, saving each month, chipping away slowly at each goal and seeing where the Lord leads.

What are your favorite guiding principles for your financial management? Feel free to discuss in the comments!