In last week’s segment we started the discussion about savers and spenders.  Before you can really gain control over your money, you have to understand your natural tendencies toward money. 

Whether you are a saver or a spender, don’t worry, you can still handle your money well, accumulate wealth and enjoy the ride.  You will need a plan, but the way you go about implementing that plan will be different based on your dominant saver/spender tendency. 

If you took the test last week, you already know which one you are.  If your money is tied to someone else, like a spouse you will need to know whether they are a saver or a spender too.

Once you are armed with this information you are ready to set your plan in motion. 

            If you are a saver or you are a saver in a relationship with another saver, your path to creating wealth is much easier.  You each have an “in case of” list and together your combined list is huge.  This will provide you with plenty of motivation to save money. 

Your challenge will be to enjoy your life without the constant focus on buying the cheapest thing so you can save more money.  Keep your eye on your saving target and splurge once in a while.

           If you are a spender or you are a spender in a relationship with another spender you will have the hardest time accumulating wealth. 

You won’t have the hardest time making money because spenders love the risk of trying new things and sometimes it will pay off with big monetary gains.  Your challenge will be to save some of it. 

You won’t be able to do it alone and you will have to make an agreement with yourself and your partner if you have one to handle all of your money issues together.  You will have to shine the light on your money to keep each other on track.  If you work together, you will find that you are a powerful team.  If you don’t, you will continue to struggle with your money. 

Here are two other combinations of savers and spenders in relationships. 

The saver/spender relationship where the saver controls the money.  This is the only one that has any chance of working because the saver will do what they can to put some money away and make sure the bills get paid on time.  The problem in this dynamic is that the saver generally thinks they can dictate to the spender how much they can spend.  The saver will have to make an agreement with the spender that the spender agrees to.  Here is what must happen to make it work.

The spender must have their own spending account where they keep their own spending money.  They must agree to…

1. Not use credit

2. Not touch the family money and in return,

3. They do not have to account for where they spent the money in their spending account. 

A note to the Savers in this scenario:

If you structure your money this way, you will have set up a system where the spender won’t mess up your ability to pay the bills so you can still put some money away.  Your spender will be happy and you can avoid uncomfortable money discussions in the future.

Our final dynamic is where you have a saver/spender relationship where the spender controls the money.  It is important to note that in this dynamic, the spender does not want to deal with the money, they just want access to it. 

You both have to sit down and agree to having the saver control the money and the bills.  The previous example works the best but if you just can’t agree on that, the compromise is to handle all of the money together.  Like two spenders have to. 

Remember, savers want to save money “in case of…” and spenders need the thrill of buying.  The two can work together and be successful, but you have to set it up correctly.

In today’s environment, we don’t get as many mistakes with our money as we used to.  One mistake can set you back for a life time.  Now that doesn’t mean that we have to be afraid to do anything, it just means we have to spend a little more time planning. 

Any time your money is dependant or mingled with someone else, you need to make sure that you have some agreements.  To have an agreement, you need a clear line of communication.  This means you have to talk, you have to be completely honest and yes you have to have a plan.  Your plan should include a clear understanding of where you are today with your money and where you want to go financially. 

When we are coaching people on their money, we start by making sure that they are on the same page to begin with.  We also want to make sure they have some type of agreed upon place where they want to end up.  We do this with our clients by helping them create a financial vision.  That way whatever happens along the way or no matter how off course they might get, at least they know where the journey started and where they want it to end.

Your money might be the most energy charged journey you take in your life.  It is an inanimate object but it does have lots of energy that makes people do and say things they wouldn’t normally do or say.  In order to win the money journey you have to view it as a tool.  As you move through your life and you get more understanding of how this tool works, using it and making it work for you really does get easier. 

One thing that you have to understand as you are learning to work with money is your dominant nature about money. 

Are you a saver or are you a spender?

Your answers to that question will determine how you will go about accumulating more of it. 

For example, Let me explain the way Savers think.  Savers are always looking to put money away in case of… A savers in case of list is always huge.  What if the car breaks, or the refrigerator goes out and ruins all of the food in there.  These all cost money and I need to have more money stashed, in case of…

Spenders on the other hand are more than the exact opposite.  Spenders get a rush from spending money.  Spenders are always looking to make “the buy” regardless of whether the buy is high on the priority list or on the priority list at all.  They will buy based on the availability of money or credit as long as there is something to buy. 

We (I say we because I am a spender) We are not bad people, we are just wired differently than savers. 

Savers, if you have a spender in your life, don’t think you can guilt us out of it or reason it out of us.  I am not sure that you could even beat it out of us.  I believe it is in our DNA or something.  In any event, it won’t go away, you will just have to learn how to understand the way our minds work and create a personal financial system that allows us to be who we are without screwing up the agreed upon plan.

The problem most people encounter when they are creating their financial plans together is that they don’t consider this really important aspect of their relationship. 

We know that for all practical purposes, men and women speak different languages about everything.  We also know that people from different financial backgrounds won’t worry about the same things when it comes to money. 

When people are starting to get their finances in order they need to explore the language and needs of savers and spenders.  This is as important as the Mars and Venus differences between men and women.  But here’s the rub.  Not all savers are women and not all spenders are men.  You have to determine where you lie on scale and adapt your plans based on the results.  Here is a quick test to get you started on where you fit in.

It is the 10^th of the month, the paycheck from the beginning of the month is gone, the next one won’t be here till next week.  There are some bills to be paid and some food left in the fridge.  While going through your car you find $40.00.  Do you pay a bill, put the money in the bank or Go to dinner? 

Don’t sit on the fence, be honest with yourself.  You have a dominant side so embrace it and use it to start your financial plan. 

Tune in next week and we will talk about the different dynamics that spender and saver couples have and how to make whatever dynamic you have work.