Your Money Personality--It's All in Your Head

--Pink Floyd, rock band

What makes one person a spendthrift and another person a miser? Where do we get our attitudes--which usually lead to behaviors--about money?

Behaviorists will say that attitudes about money often are learned behaviors. And that those learned behaviors also reflect a host of other influences, including: ethnicity, gender, class, nationality, immigrant status, income, education, religion, marital status, and family makeup.

Sociologists and others who examine such things as attitudes about money would say that the stereotypical American white Anglo-Saxon household, for example, tends to think of money as a tool to promote individual expression and self-reliance.

Perhaps that's what inspired the song "Money" by Pink Floyd. Taken to the extreme, that's why some professional athletes have six cars when one or two would do quite nicely. In such cases, clearly, car-ownership goes way beyond a utilitarian need for transportation and becomes more an expression of self.

More realistic, however, is the case of Sally and Mike in San Diego. They didn't absolutely have to have a brand-new mini van or a bigger house, but as dual-income full-time professionals who spend most of their waking hours working, it comes down to quality of life.

It's a "we-work-hard-for-our-money, let's-enjoy-it" approach to money. And many Americans would say: "Why not?" Only a short decade ago Harvard economist Juliet Schor noted that average Americans were working the equivalent of two months more each year than their German or French counterparts--and that four-day workweek promised so many years ago is today still a mirage.

According to Celia Falicov, who wrote about the culture of money while at the University of California, San Diego, for the American Behavioral Scientist, there are some pretty significant cultural differences that show up when examining people's attitudes about money.

For example, Falicov says Anglo-Americans would tend to focus on using money to express individualism and self-reliance, while Latinos would more likely focus the use of money based on collectivism--family goals.

Think of it this way. In the Hispanic or Latino culture, the focus is on family connectedness and cohesiveness. Additionally, the Latino community has a broader definition of "family" than Anglos do. Hispanics' extended family often includes immediate family members, distant relatives, close family friends, in-laws, and even godparents. That interdependency on extended family members is one reason why Hispanics send so much money back to their families in their native countries.

"Although money is earned and saved individually [in the Hispanic culture]," Falicov writes, "it is often shared, particularly in times of need." Sending money home is an inescapable duty among most Hispanics.

That's not to suggest that the Anglo family won't be supportive to other family members in need. It's just in the Latino culture, that support is an obligation--not a choice.

Money is better than poverty, if only for financial reasons.

--Woody Allen, American playwright

"Money's a good thing," a smiling 36-year-old Victor Corro says when talking about Latin American money attitudes. "And Latin America is a cash-based society--at least among people age 40 and older."

"People over the age of 40 in Latin America aren't likely to use check or debit cards or any electronic payment tools," Corro notes. "While that's changing among younger people, there's still some mistrust of payment transactions over the Internet."

Raised in Panama until he was 19, Corro's mother put him on the bus every other Friday to spend the afternoon paying the family's utility bills--in cash.

"In the U.S. we value our time, and electronic transactions address that concern. Spending a whole afternoon to pay bills is not a big deal in Latin America," Corro says. As International Partnerships Manager for the World Council of Credit Unions in Madison, Wis., Corro explains that while it is customary in the U.S. to show up five minutes early for a 4 p.m. appointment, in Latin America, arriving 45 minutes late for that appointment is still on time. Time is not the equivalent of money in some cultures.

Of course, one cannot overestimate the impact poverty has on attitudes about money. Poor families purchase by cash because credit often is not available to them. And the cycle of poverty often keeps a family poor for generations. Lack of resources often can mean poor people pay more for the same products and services than the middle class or affluent do. This ghetto-cash economy applies to all poor people, whether they are Anglo-Americans, African Americans, Asian-Americans, or Hispanic-Americans.

"For middle-class and upper-class mainstream Americans, the world of money is electronic," notes Falicov. That means payroll deduction, money transfers, electronic bill payment, and other conveniences are a given. In many cultures, such conveniences aren't always available to poor and working class consumers.

Income and gender, too, play a role in one's attitude about money. Higher income Anglo-American women, for example, feel increased autonomy and independence. Indeed, many Anglo women with higher incomes often keep personal accounts that are limited to their access only. Marc and Vicki, Virginia Beach, Va., have been married for more than a dozen years. They keep some funds separate, and commingle others.

The rule is not to talk about money with people who have much more or much less than you.

--Katherine Whitehorn, British writer

While Westerners often are seen as individualistic and materialistic, that phenomenon may be spreading as the economy becomes more global. Pablo DeFilippi came to the U.S. in 1990 from Chile at age 22. When he returns to Santiago now, he sees a changing culture. "Western-type consumption is more common in Chile now," DeFilippi says. "Attitudes toward debt are generational," he says. His father, a teacher and farmer who came to the U.S. in the 1970s always pays cash, while the son accepts debt as a fact of life.

DeFilippi, who works for the National Federation of Community Development Credit Unions in New York and once managed a credit union on the lower east side of Manhattan, says collectivism is often a necessity in cultures where government support is lacking. "People had to find their own [financial] solution," he says, "that's why they collaborated." Collaboration often is environmental, he notes, because "people with no access to credit are forced to pool their resources."

Attitudes about money are often complex. In India, money is both an essential part of one's life and a potential obstacle to salvation. "The symbols attached to money (in India) are the products of the life state, life aim, and social role," according to an article by Mohan Dutta-Bergman of Purdue University, West Lafayette, Ind.

Money holds different meanings at different life stages in Indian culture--it's used to build material prosperity, enhance familial relationships, do one's duties in life, and attain salvation or 'complete freedom.' In other words, the meaning of money changes depending on one's life stages. In fact, some people from India see Americans as impoverished because money is not used to promote spirituality.

In England, the practicality of needing and using money clashes with the guilt associated with having money and wealth. In some cultures, money, it seems, provides a constant struggle between good and evil.

The notion that wealth is evil is shared across some cultures. In China and Taiwan, for example, wealth sometimes is seen as an evil that can destroy families, interfere with serious thinking, and even promote superficiality.

"I don't know about that," notes Pete Crear, head of the World Council of Credit Unions in Madison, Wis., a global trade association that promotes establishment of credit unions and cooperative ideals--like thrift. Crear has traveled extensively and notes with a laugh, "What I do know is everywhere I go, people of just about any race, color, or creed want to know how to borrow money."

Indeed, money has many different meanings to different people. Deborah Price, a California author and financial instructor, recently established a money coaching institute in South Africa. To Price, the attitudes about money there show up in security issues. "Black South Africans feel so much more secure [in their attitudes about money] because money is not the only medium of exchange that they understand ... whereas that's all Americans understand."

In Muslim countries the charging of interest (riba) is considered usury, and doing business with companies that have a significant portion of income from interest is prohibited. Charging interest is considered an injustice and exploitative.

That attitude was shared by Christians at one time, notes Connie Kilmark, Kilmark & Associates, Madison, Wis., a money adviser. "Charging interest and profiting at the expense of the poor was seen as oppressive and exploitative," she notes before opining that payday lenders and legislators could learn a thing or two from that biblical reference.

Of course, today's world economy means that getting rid of interest income is next to impossible. Muslims use fees as acceptable alternatives. And some Muslim scholars have set a threshold for the percentage of revenue that can earn interest income. Companies that earn too much interest can give back excess interest income to the poor and needy or to a public charity.

In many cultures, money is not an end in itself, but a means to achieve higher values. If it is earned, invested, and spent appropriately, it will reward an individual or a family.

Of course, there are no simple answers to understanding our feelings and beliefs about money. Analyzing your money attitudes, your earning and spending habits, and your money values can be useful.

Price is more succinct in her analysis: Real change won't take place until Americans (and couples) can speak honestly about money and can address the issue of insatiable consumerism.

She says, "Consumerism is the addiction of our time." Maybe that's what Pink Floyd was saying.

Published December 25, 2006