What makes people good with money?
I often meet people who say “you can’t help me, I’m awful with money”. I find this slightly absurd, as it’s toughest to help those who are really good with money, not bad. Yet what is it that makes some fiscally competent, while others constantly carry metaphorical holes in their pockets?
Without doubt, a chunk is to do with education and upbringing, which is one of the reasons I’m so involved in trying to get compulsory financial education in schools (we launch the all party parliamentary group of MPs supporting this in a couple of weeks, hurrah). Yet you commonly meet siblings who went to the same school, had the same education (and of course parents) but have totally different attitudes to cash.
I suspect there’s a strong, though not absolute, correlation with mathematical skills. It’s more along the lines of ‘those who are good with money are often reasonably numerate’ rather than ‘those who are numerate are always good with money’. Yet I think it’s attitudinal too.
I suppose to answer the question we actually need to look at what being good with money means. In MoneySaving terms there are two elements. Interestingly, when you ask a class of kids if they’re good with money, they always answer yes to the first of the below points.
- Being a good budgeteer.If you spend less than you earn, keep tight reins on what cash you’ve got and what you can afford to spend. That certainly helps (see the budgeting guide for help on that).
- Paying less for bills and getting better deals. I’ve met many good budgeteers who are wasting a fortune throwing cash away (a classic case of this was in the 5th episode of Make me rich, you can see some of the actual programme in my old showreel). To be really good with money you also need to ensure you’re not overpaying for things, classic MoneySaving if you like.
Of course for some it doesn’t stop there, you could include Thriftiness (as in Old Style MoneySaving) or entrepreneurship as strong financial skills too, though outside the pure definition of MoneySaving.
I’d love your thoughts
So enough of my mullings, what does it take? Are you good or bad with cash and if so, why do you think that is? What about those who’ve had a lightbulb moment and were once awful but are now shining beacons of MoneySaving? Is it just hard work or a more fundamental change about who you are?
