Building a Money Partnership Transcript Part 1

Building a Partnership with Your Money

List of SMART goals.Building a partnership with your money is an important aspect of financial stability. Every day you may spend money without noticing how much you spend, what you spend it on, or when you spend it. Because of this, you may not realize the impact your day-to-day spending decisions can make on your future financial well-being.

In this series you will learn about your spending decisions, your money personality, what things you value the most, and how to set a SMART goal.

Building a Money Partnership Transcript Part 1

Part 1: Building a Partnership with Your MoneyVideo
Idaho Assistive Technology Project (IATP)
July 2014

Slide 1:

Building a partnership with your money is an important aspect of financial stability. Every day you may spend money without noticing how much you spend, what you spend it on, or when you spend it. Because of this, you may not realize the impact your day-to-day spending decisions can make on your future financial well-being.

Slide 2:

In this module you will learn about your spending decisions, your money personality, what things you value the most, and how to set a SMART goal. The first topic we will focus on is how you like to spend your money.

Slide 3

Here is an example of a spending decision you might not be aware of. What if you bought a cup of coffee at the local coffee shop every day of the week and spent $2 each time? How much money would that decision cost you each week? Each month? Over a year?

Slide 4:

If you spent $2 every day at the coffee shop, you would spend $60 every month; $730 every year; $3,650 every 5 years; $7,300 every 10 years; and $14,600 every 20 years…on just coffee. If you saved this money instead, just think of what you could buy. For example, in just a year, you would have saved $730 that you could use for something you've really wanted. The numbers in this example are assuming that you have put your money in a savings account or some other savings. If you invested this money, it could make more money for you in interest. Now think about how much more you would save if you didn't spend $5 a day. You would save $150 monthly, $1,825 yearly, $9,125 every 5 years, $18,250 every 10 years, and $36,500 every 20 years. Just think about what you could buy with the money saved!

Slide 5:

Saving money is actually a really easy thing to do. Here is an example of one simple way that you can start saving your money. At night when you are done with your day, empty your pockets and throw your change into a jar. Would this be saving? You bet it would. While this is a small step towards saving money, it is an easy way to get started. Once you’ve filled a jar with your spare change you can take it to your bank and get it counted and exchanged for paper money. Change can add up quickly. It can be a great way to save up, to pay off a bill, or buy a new pair of jeans!

Slide 6:

This table shows you examples of ways you might spend your money. The first example, saving 10% of my paycheck every month, is checked as a good spending decision.

Think about what you are spending your money on and how that money might help you a little more if you saved it instead of spending it right now. Look at the spending decisions above. Do you think these are good decisions or not-so-good decisions? What could you have done with the money spent on the not-so-good decisions? Do you have a spending habit that you could change to help save you money?

Slide 7:

Consider what you have learned so far about your money. Create a chart like this and fill it in with several examples of how YOU spend your money. Put a check mark in the appropriate box next to each example—do you think you have made a good or a not-so-good spending decision for each example you list?

Slide 8:

Part of building a solid partnership with your money is recognizing how you think about money. In the next few slides we will find out what your money personality is.

Slide 9:

What is your money personality? One way to recognize how you think about money is by asking yourself: What is my money personality? Are you carefree when it comes to money? Or do you associate money with security? You really need to know how you feel about money and how you spend it before you can build a strong relationship with it.

Let’s figure out which money personality fits you the closest. By knowing how you think about money, you can form a plan to protect and stabilize your financial future.

While reviewing each kind of money personality, you might want to think about people in your life, friends and family, that fit into these categories. For example, if you are one kind of money personality but your spouse happens to be a different money personality, you could think about money differently and therefore spend money in different ways.

In the following quiz there will be a series of 5 questions to answer. There will be a description of each money personality type after the questions. Select the letter next to the answer that best describes how you feel about the question.

Slide 10:

  1. My feelings towards spending and saving my money are:
    1. I live paycheck to paycheck and spend my money when I have it. I know someone will always help me if I run low.
    2. I spend more than I have so I can have nice things.
    3. Money isn’t everything. There are more important things than money and it doesn’t buy happiness.
    4. I love to spend money and as soon as I get it, I buy whatever I want.
    5. I have enough money to live comfortably. I watch my spending but I do not follow a budget.
    6. I stick to my budget. Having an emergency fund is important to me and I try to have one on hand all the time.

Slide 11:

  1. If there were an emergency, I would:
    1. Get by. It’s not important to save a lot of money. It always seems to work out. My money challenges either go away or take care of themselves.
    2. Stall. It’s important to me that people don’t know that I am struggling. Appearance is important to me.
    3. Ask for help. Money isn’t the most important thing to me. My family would help me get by.
    4. Freak out. I don’t have savings but really like to spend money when I have it.
    5. Stress a little. I have a small emergency fund but it could be bigger.
    6. Be at ease. I always have enough money in the bank for emergencies.

Slide 12:

  1. Using credit to pay for day-to-day bills is:
    1. A normal occurrence for me. I know that tomorrow will come and charging items today helps me get the things that I want.
    2. A necessity for me. I love buying name brands. Being successful means having nice things and being able to shower friends and family with gifts.
    3. Great. There are so many things that I want. Being able to buy something today and pay for it tomorrow is my motto.
    4. Not really a need for me. If I don’t have the money, I either do without or find another way to get what I need.
    5. I use credit for day-to-day purchases but I have the money to cover the charges and pay the bill in full every month.
    6. Not in my vocabulary. I think that every debt should be paid, cash should be used and purchases should be made when you have saved the funds to make them.

Slide 13:

  1. I spend my money on:
    1. I have no clue. I don’t worry about my money…it never helps. And trying to keep track of it would be useless.
    2. Anything expensive. Cheap stuff doesn’t last. I want people to see what I have and drool over it.
    3. My family. I would rather spend more time with my family than worry about things. Lots of money would be great but it isn’t really necessary.
    4. All the nice things in life. Happiness is truly going shopping and buying whatever I want, whenever I want.
    5. Groceries and necessities. I don’t have extra money to buy things I don’t need.
    6. Things I want and need. It is a great feeling to have the money I need for the things that I want and need. I make sure that I save up and shop around for bargains so that my money goes farther.

Slide 14:

  1. When I think of money, I:
    1. Am not concerned. It isn’t my top priority.
    2. Am excited. It means I get something I want.
    3. Feel it is a means to an end.
    4. Am out the door to the nearest mall.
    5. Feel anxious and upset. I live crisis to crisis and hate thinking about money.
    6. Feel secure and in charge.

The Next slide is interactive. Click on the button that represents how you answered most of the questions.

Slide 15: (Interactive)

If you answered mostly A’s, you might want to work on your partnership with money. It isn’t a big issue for you and you aren’t worried about it because things always seem to work out. But wouldn’t it be nice if you didn’t have to ask someone else for help when you needed cash? Something to consider about your money personality type is that by saving some of your money every week, you could avoid getting by, borrowing money from family and friends, or using credit to pay for day-to-day expenses.

If you answered mostly B’s, you love your money! Your relationship is out of balance a little. It is nice to have things you want, but what about the things you need? By spending money that you haven’t earned yet, you risk the chance of financial disaster. Something to consider – by creating a simple spending plan you would know where your money needed to go first before you hit the malls. This would help with running low, and paycheck-to-paycheck problems too.

If you answered mostly C’s, you don’t have a partnership with money right now. Your personal relationships are the most important to you, which is great. And the thought of paying bills makes you a little sick. By making a plan for your money, you could spend more time with your family and friends and make sure you have everything you need, and some of the things you really want. Something to consider – your money isn’t really working for you right now. By tracking your spending habits and knowing where you are spending your money, you could actually rid yourself of the feeling that money is the means to the end and start making your money work for you instead.

If you answered mostly D’s, you have a partnership with your money, for now. You like to spend your money as soon as you get it. This is okay if you don’t have anything else you need to pay for. Saving for your purchases might mean getting something really important later. How great would it feel if you had some cash on hand for later? Something to consider – money doesn’t buy happiness and neither does stuff. Consider visiting your purchases before you buy them the first time. You may find that you really don’t need the item that you were so excited about the first time you saw it. And there is always the possibility that it will go on sale and save you more money for something else.

If you answered mostly E’s, you are so close to having a great partnership with your cash. You don’t have all the cash you need to live the lifestyle you would like, but you could. You are on your way! Something to consider – revisit your budget. Think about some of your expenses that vary every month. Is there a way to reduce, adapt, or eliminate some of those expenses? You might find that it is easy to get rid of an expense that you don’t really need right now and save some money or pay a bill that has been bugging you.

And, if you answered mostly F’s, you have a great partnership with your money. Keep it up! Something to consider – emergencies have a way of popping up and bursting a secure feeling bubble. Make sure that you have 6 to 12 months of savings in a secret place. Use this money only if you need it for a real emergency, not a new wardrobe or that really awesome big screen TV. Now think about friends and family members and what their money personality might be and if that affects their spending decisions. Do you and friends or family have different ideas on how to spend money? Look at the “Something to Consider” under each money personality type for ideas on how to build a stronger partnership with your household money.

Slide 16:

Please continue to Part 2 of “Building a Partnership with Your Money.”