Which way do you tip the scales when it comes to money? It helps to know

We all tend to prefer one thing over another, and why not? Nothing wrong with that. It’s part of what makes each of us unique.

In her book Know Yourself, Know Your Money, Rachel Cruze (personal finance expert and daughter of money guru Dave Ramsey) shares 7 sets of preferences she finds people have with money – our ‘unique money tendencies’. For example, some of us prefer to spend on quantity, others on quality.

What’s refreshing is these are not ‘either-or’, one or the other, but each is a spectrum we find ourselves on. There’s no judgement or no wrong answer. All of us tip the scales in one direction or the other when it comes to the way we handle money. We lean towards either:

• Planned giver… or spontaneous giver
• Full nerd… or free spirit
• Things… or experiences
• Quality… or quantity
• Status… or safety
• Scarcity… or abundance
• Spender… or saver

Now it turns out if we drift too much to either extreme, it can be trouble. If I only spend on things, for example, I will end up missing out on some positive experiences.

“The danger of unhealthy extremes on any scale is that they hold you back,” Cruze says, advocating for us to move towards the centre of each scale. “They limit your potential for growth and for really living life.”

So we’re looking for balance. As you go through the seven sections below, you can even make a list and plot how much you and the whānau tend towards one side or the other.

When you give away money, do you plan it? Or are you more spontaneous?

Let’s start with our giving. Do you give money to others on the spur of the moment, like when you suddenly decide to shout lunch for a friend who is short the money? Or donate to someone on the street? You’re more spontaneous. If you calculate it and sign up for regular donations over the year to an organisation you’ve researched, you’re more of a planned giver. A key question for both tendencies, according to Cruze, is how effective our giving is for others.

Do you go full nerd with money? Or are you more of a free spirit?

Who doesn’t love nerding out with a good spreadsheet or Sorted calculators? Turns out quite a few of us. If this is not your thing though, you’re probably more of a free spirit in the way you handle money, and those spreadsheets don’t really do it for you.

That’s not a bad thing necessarily: free spirits know how to enjoy life (not everyone does), don’t get overly stressed about money (which is useful), and more easily see the big picture.

By the way, turns out you can be really nerdy but still be more of a spender, Cruze says. Alternatively, free spirits can be savers even! Remember, each of these is a spectrum, and our various preferences come together to make us who we are with money.

Do you like to spend money on things? Or experiences?

You may love to travel, while your partner may be happier with something more tangible, like the latest gadget. We all tend to prefer spending on experiences or things. You may like spending on kitchen kit instead of a night out. Or you may prefer boots you can wear for years over one of New Zealand’s world-famous walks.

Which is it for you? Both are just as valid, just different.

Do you typically buy quality? Or quantity?

I like to think I’m a minimalist, opting to buy less things that are more quality and last. But there are times (I’m thinking food), when I prefer quantity instead of the highest-end stuff. Especially when the whānau or friends are gathering and we like having lots of kai to go around.

How about you? Quality or quantity? Everyone naturally leans one way or the other.

Do you tend to want money for status? Or safety?

This gets to the heart of why each of us wants money – what motivates us. ‘Status’ here sounds a bit hoity-toity, but think of it this way: if you view having money as a measure of success or a scorecard, you are on the status side. The home you live in, the car you drive, the money you make, the holidays you take – they are all marks of success. These are seen as achievements, which is understandable.

Safety, on the other hand, is about peace of mind – you tend to want money so that you’ll be secure and okay, comfortable. Should anything happen, like being made redundant or a medical emergency, the money will be there to keep you safe. Sound like you?

Do you see money as being scarce? Or abundant?

This is kind of a ‘glass half empty or full’ sort of question. Some of us look at money as being in abundance, with more than enough around for everyone, whatever happens, and that there will always be more opportunities to make more of it. Those with an abundance mindset are more willing to take on risks.

On the other end, others consider money a scarce resource that needs to be conserved and not wasted. If you play it safe with money, it can make you careful, thoughtful and wise even. (Although at its extreme this can get unhealthy, with a fair bit of fear for the future thrown in.)

Finally, the classic question: are you more of a saver? Or a spender?

I left this one for last because there unfortunately tends to be a fair bit of judgement and negativity towards spenders. (I lean that way for sure.) But let’s just acknowledge: we need everyone to be savvy spenders, not just savers all the time! And if you’ve ever met a hoarder or a retiree who lives in fear of spending anything, you know savers can have their downsides, too.

So which way do you tip the scales? Understanding our unique money tendencies helps us know ourselves and those we’re close to. And it certainly explains more than a few money decisions we’ve made! Hopefully you can see your own preferences more clearly now.

“Once we know the why behind our decisions and habits, we can choose to make different ones, better ones,” Cruze advises.