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Thursday, April 27, 2006
Dollars and Sense
Several weeks ago, T and I did this "quiz" in Money magazine designed to "test" financial compatibility. There was a series of ten questions, and each of us had to answer the questions for ourselves and then try to predict what the other would say. For example, one of the questions asked: "At what price is a purchase so expensive that you ought to clear it with your spouse before buying the item?" The others dealt with what you would do with an inheritance, how you feel about giving kids an allowance, how you handle financial disagreements, etc. When we traded our "answer" sheets, T and I were not surprised (we talk about finances a lot) to discover that we'd matched on every single item -- except one.
The last question was the Bonus.
Complete this sentence with one of the choices from below: 'Money, at heart, is really all about...'
a.) Security. b.) Freedom. c.) Pleasure. d.) Prestige.
T picked "freedom." To him, money is about having the ability to do what you want, and mostly to be free from worrying about money. To me, however, money has always been about security.
Ever since I was a teenager with my own money, it has always been a source of stress for me. This is because my mother was always stressed about it. It's not that she was worried that we didn't have enough money; rather, she was always worried that we wouldn't have enough. It was always an unnamed worry about the future, one that never went away despite the fact that our family circumstances did not ever change much (e.g., my Dad has been with the same company since he was 18; my Mom stayed at home with us until I was 12 and then took a part-time job, the same job she has today). I can distinctly remember sitting at the kitchen table with her when she paid the bills (Mom has always handled the finances), and how she'd say, "Well, we're covered for now," or "That's the last of it" or "Can't wait until next payday." She used to keep envelopes of cash hidden around the house, labelled with things like "New Drapes for Living Room," "Car Repairs," "Landscaping," or "Christmas." She used to round up her purchases in the checkbook (i.e., if the purchase was for $14.34 she'd enter the amount as $15.00) so that she'd have a "slush fund" in the checking account "in case something happens." We never went without anything in my family, but for some reason Mom always felt that we were on the cusp of financial disaster.
Aside from hiding money in obscure places (an envelope full of cash in the linen closet, for example) and rounding up in the checkbook, another one of my Mom's money manias was never looking to see how much she actually had. One the one hand she'd be panicked that there wouldn't be enough money in the future, but on the other she never knew how much was in the bank, where my Dad had his investments, how much her checkbook "slush fund" was, or how Dad's retirement account was growing. When I was in college I participated in a pricey study abroad program, and I remember talking to my Mom on the phone about making the first down-payment on the trip. She freaked out a little when she heard the amount I needed, which in turn made me freak out, we both ended up in tears, and hung up without a resolution. Two minutes later my Dad called me back and said, "Look, how much money do you need? If it's $15,000, we can handle it. If it's $50,000 -- sorry, but we ain't got that kinda cash." That short exchange really put things into perspective for me, and I realized that although I knew I had inherited some of my Mom's money "issues," I had to find a way to get over them.
I have always hated money. I hated balancing my checkbook, I hated credit cards, hated going to the bank. When I was in college, I remember trying to avoid money altogether, and I simply refused to look at my bank statements and my credit card bills. A few times I didn't pay my credit card bill (which was, in college, only about $150!) and then called the company to tell them that I'd never received a statement (a lie). I wouldn't pay my rent until the last possible moment. Once I had a problem with my checking account and I didn't resolve it for three weeks because I simply didn't want to deal with it.
Then I met T. T comes from a very financially-savvy family. His Mom and Dad have made a lot of good investments over the years; they were never "rich," but they lived comfortably. When his Dad died, T helped him Mom sort through their finances, and it made T happy that his Mom would be well taken care of as she grew older. It made him happy that she would never really have to be concerned about money again (unless she lives to be over 100!). T has inherited his parents' financial confidence. He financed the bulk of his college education from savings he started as a sixth grader with a paper route. He financed part of his graduate education with investments he made as a junior high schooler (the other part was financed through his lovely bride, who worked at his school and got tuition remission for him!). He's not at all obsessive about money -- he thinks of it as a tool, something to be managed, something to have some discipline about. For him, it is not something to be "afraid of" as I am and as my Mom is.
I have learned a lot from T. I know all about our investments, I regularly check our savings, checking, and money market balances. I check my old TIAA-CREF account from when I was staff at a University, I check my student loan balances. I know how much is in my IRA and when my contributions go in. Overall, I feel quite "balanced" about it now, comfortable about how our money is "working" for us. But deep down, I'm still not feeling the "freedom" that T feels about money.
T and I were talking about this last night, as he shared with me some news about a few small job leads he'd discovered. He said that he was thinking to himself about why I was so worried about him finding a job, and then he said that it dawned on him that it was about security -- it was about having enough money, whatever "enough" really means. And that's true -- I worry about maintaining, about keeping a comfortable lifestyle. This doesn't mean I worry about not being able to buy lots of "stuff" -- I'm not a shopper. That's not it. It's about that deep-seated, inherited feeling of having a financial security blanket in the future, worrying that the blanket might not be as thick as it is now. I explained this to T. Then he put it this way: "You should not worry about the possibility of a 'thinner' financial security blanket. You should be happy that because we've been diligent with our money, we are free to rely on that blanket if we have to."
T drives me nuts sometimes, but he's practical and smart.