Your Relationship With Money

With few exceptions, how we handle our money is the greatest indicator of who we are as a person. Our money habits reveal if we can be trusted or not, if we are careless or not, if we are self-absorbed or not, if we are insecure or not, and if we do what we say or not. For most people, including many who deny it, our relationship with money is more intimate than the relationship with our own spouse. The importance of that relationship is the primary reason for protecting information about our money, often more than information about those closest to us.

Many years ago, I knew of a woman and her husband who had declared bankruptcy for the third time. Right after the third bankruptcy, she and her husband took out a loan on a new car.

One might think you couldn't get a loan after bankruptcy. Who would want to lend money to you when you are known to not pay it back? Oddly, the banks love you more! As the borrower, you have no other debt, and the bank has justification for charging a much higher interest rate.

But what this tells me about this couple is their word is meaningless! They don't do what they say, and cannot be trusted to do what they say. It is someone I would never want to do business with or partner with.

During financial downturns, we see many people behave as this couple did by abandoning homes with mortgages owed, as if defaulting on debt is an acceptable financial planning tool.

If the word "mortgage" had real meaning and consequences today as it once did, this lack of integrity (lack of doing what you say) would rarely occur.

The Latin roots of the word "mortgage" are derived from "gage" which means to commit or promise, and from "mort" which means death. The word "mortgage" literally means "death promise", where you either paid back the loan or died trying. There was no escape from it. You were a slave to the agreement until it was satisfied. This is also why loans in business are referred to as "bonds", as you are bound in financial bondage like a slave until the debt is satisfied.

When it comes to money, if you have an untrustworthy reputation, I simply will not do business with you. Your relationship with money tells me exactly who you are, and if you cannot be trusted with money, you cannot be trusted with anything else.

Then there are those who spend lavishly on themselves. Even if they take on no debt to do so, some folks just can't help but show off. They have the coolest cars, the fine art work, the fanciest house, and all the pics on social media of them and their friends in front of the private jet just prior to leaving on an exotic trip. This person is trying to prove to the world just how valuable they are. In their heart of hearts, they likely feel very insecure needing constant reassurance of others.

Doing business with this type of person is probably better than doing business with one who lacks integrity, but I would still run into severe money issues and conflicts. They will overspend on things like corporate offices. Instead of nice and functional, they will gravitate unnecessarily towards opulent and even gawdy, where that money would have been used more wisely growing or protecting the business entity.

What about the man (or woman) who spends their money on their golf habits, their hobbies, and their own interests completely neglecting the needs of their spouse? In other words, their spending is unbalanced, biased toward satisfying their own needs instead of equalizing their spending for the benefit of the marriage together?

Selfishness is a red flag in business, and fully revealed in the way you handle money. Self interest and protecting one's self with proper boundaries is not the same as selfishness. A business partner (or marriage partner) that is all about "me me me" will strive to cut you out of the profit stream feeling they deserve more than you do, even though you both invested in the relationship equally.

Yet another relationship with money is the miser. Instead of spending lavishly, either to show off or for self-absorbed reasons, this person spends on nothing, including themselves. They will hoard their money.

The primary emotion behind the miser is fear. A business partner with a miserly nature will pass on appropriate opportunities, avoiding all risk fearing potential loss. Business and life involves taking calculated risks, and the wise person properly assesses the level of risk they can accept balanced against the projected reward. The miser fearfully avoids risk altogether.

The way we handle money in life and business emanates from who we are. Our money habits accurately reflect our fears, our interests, our tolerances, our boundaries, and our wisdom. When entering any partnership in life, be it a business partnership or marriage, it is always best to explore and understand that partner's relationship with money. Doing so will help you understand what you will face in the years ahead.

What is your relationship with money? The answer to this question is likely who you really are. And in that truth there is also an opportunity for change.