When it comes to money, can get-rich-quick thrill seekers cope with financially savvy partners? In her new book, Investor columnist Linda Gough puts couples' financial compatibility to the test.
What is your financial personality profile? Take the first step to financial success by having a bit of fun with the following matching game.
First, try deciding what financial personality profile you best fit. Then match yours with that of your partner and see what challenges and opportunities you can create together.
Are you a thrill seeker? You enjoy taking risks from acting on a share tip from your best friend's neighbour to investing in your brother-in-law's internet company. You may have a short attention span and tend to be enthusiastic about life and all it has to offer. You have limited patience and aren't too fussed about detail all you want is the bottom line. You also want to become rich quick. When it comes to spending, it's all about easy come, easy go. If you see something you like, you must have it, regardless of the price tag.
Are you savvy? You've always been switched on about money matters and have probably had a share portfolio or investment property since you were in your 20s. You are a goal-setter from way back. You like your money to work for you so you always keep an eye on returns. You often do your own research but are happy to seek out advice to get where you want to be. When you do take a risk, you do it with confidence.
Are you steady? When it comes to detail, you can't get enough. You almost bury yourself in it. Before making a decision, you do plenty of research, weighing up all the pros and cons. You like to feel comfortable about your finances. You prefer the known to the unknown. You are a "blue-chip" kind of person, preferring consistent returns with an established track record, and you manage your credit cards brilliantly.
Are you timid? When it comes to investing, you believe you can't go past owning your own home. You find it difficult to cope with risk. You like to put your money in the bank and leave it there. You don't particularly like shares because you feel they can be too volatile and you don't want to risk losing your hard-earned money. You also like predictability, so guaranteed returns have the most appeal.
Once you and your partner have determined your respective financial profiles, combine the two to see what's in store for both of you.
Thrill seeker + savvy
Pitfalls: Thrill seeker has the potential to frustrate savvy by taking one too many risks. Equally, savvy will try to rein in thrill seeker's enthusiasm by demanding to see the facts and figures behind that latest scheme to make millions. Be prepared for stormy arguments.
Positives: Both of you are keen to make money and prepared for some element of risk. Savvy should be able to temper thrill seeker's extravagance with some common sense logic and hard-nosed facts. Thrill seeker can possibly persuade savvy to loosen the purse strings and make quicker decisions about that investment.
Thrill seeker + steady
Pitfalls: This is a potential battleground. Steady will find it difficult to convince thrill seeker to read the five newspaper articles warning against their latest scheme. Thrill seeker will have a million reasons why you both should go ahead, while steady refuses to budge.
Positives: Over time, and with perseverance and some heated debate, steady may be able to sway thrill seeker to take a middle road. Thrill seeker can help steady mellow a little and agree to some level of calculated risk in their portfolio.
Thrill seeker + timid
Pitfalls: A challenging combination. Let's get one thing clear: neither of you will be able to have what you really want. Compromise is necessary to achieve harmony. The danger is that timid will be unable to hose down thrill seeker's enthusiasm and thrill seeker will take charge and just do it.
Positives: Effective communication, and lots of it, will be the key along with a good financial planner who understands your diverse risk profiles. Thrill seeker will be forced to compromise while timid must accept that a little risk is a good thing.
Thrill seeker + thrill seeker
Pitfalls: This can be a potentially dangerous combination. No one will curb your enthusiasm. You will be so excited about the next big opportunity that goal-setting and planning will go out the window. Separate agendas may be recklessly pursued.
Positives: It's never a dull moment in a relationship where life is full of money-making possibilities. It's all about going for growth regardless of risk. Money will be made and lost and made and lost again. Whenever you are down, you will always believe that you can bounce back.
Savvy + savvy
Pitfalls: There aren't too many pitfalls here. But you may share different strong, unwavering opinions on how to achieve success. Be prepared to concede that you may both be right when it comes to setting your investment strategy. The odd compromise may be required.
Positives: You pay off credit cards in full each month. You are keen to make money through goal-setting and smart financial planning. Decisions about your finances will be backed up with sound investment strategies.
Savvy + steady
Pitfalls: Savvy may be tempted by steady's desire for detail and consequently miss out on opportunities that require snappy decisions. Conversely, savvy may become frustrated by steady's cautious nature.
Positives: A desirable combination. Savvy will help steady to take a few calculated risks as long as the supporting evidence is there. Savvy's confidence will rub off on steady, enabling steady to feel secure while savvy boosts the bank account.
Savvy + timid
Pitfalls: Timid may try to reject savvy's suggestions for any change. Timid will need lots of time to digest savvy's ideas and this may result in a few frustrated outbursts from savvy, who will have to work hard at providing reasons for taking risks.
Positives: Provided time is on your side, the outlook is bright. Until timid met savvy, there was little chance of financial success and the future looked grim. With savvy alongside to help with the decisions, timid should be able to reap results.
Steady + timid
Pitfalls: With a steady, cautious approach to investing, timid will find it hard to create real wealth. As steady is also naturally conservative, you both may come to the conclusion that risk is a dirty word. Your procrastination may see opportunities slide.
Positives: You both won't rush into any risk and favour safe investments. You may even be able to predict what income you will receive for the rest of your life. There will be no financial dramas. Life will be smooth and predictable, just as you like it.
Steady + steady
Pitfalls: You may not have much of a social life as your time will be spent on research. Weighing up all the options is important to you but your procrastination may stop you from making the most of your opportunities. Growth may also be compromised.
Positives: You will really enjoy gathering your data like a bird gathers twigs. You will be comfortable with your choice of investment vehicles and be happy to wait to reap your rewards.
Timid + timid
Pitfalls: Unless you undergo a personality change or seek plenty of financial help, you may never be financially successful. Your worst nightmare not enough money to fund your retirement may come true as your funds will simply not grow enough sitting in savings accounts and term deposits.
Positives: If you seek financial help from a planner who comes highly recommended and who you both trust and feel comfortable with, or by undertaking a course in investment, you may be able to push the boundaries of your comfort zone.
The important point to note is that every relationship is unique and there are positives in most situations, even those with opposite financial personalities.
Value judgements
Having determined your financial personality types, you need to sit down with your partner to discuss your values. Like your personality, your values help shape who you are and determine what matters most to you.
Funnily enough, couples often pass over a discussion on values and go straight to goal-setting. Yet, without a clear understanding of your partner's values, you will be unable to fulfil and maintain your life goals.
Values such as security, emotional support, fun, fidelity, trust, health and spiritual growth can be all key aspects of your expectations about your relationship.
All too often, people fail to align their goals with their values. The result is that they may end up disappointed with their lot in life.
Take Katrina, who never discussed her life values with her partner, James. She worked and worked to accumulate as many possessions as she could: a big house, flash cars and expensive clothes. Her values were security, comfort, stability and wealth.
Unfortunately for Katrina, James's values were about spiritual growth, emotional support and enjoying life. The partnership hit a rocky patch when Katrina turned 40 and realised that their values and therefore their goals were entirely different. Sure, she had accumulated wealth, but it was at the expense of their relationship. She had spent so much time away from him that they had drifted apart.
You may have a dream to sail around the world or sing in a rock band. You may want three children quickly while your partner secretly wants none. Don't be afraid to share your dreams and aspirations, as they will undoubtedly have an effect on what goals you set together as a couple.
For couples, finding out more about each other's attitudes to money can help you understand how to align your spending and saving habits. Here are some tips to remember when discussing this essential subject:
No single person's attitude is the right one.
Respect a partner's feelings when discussing attitudes try not to be judgemental about spending habits.
Try to find common ground with your partner with goals and decide what changes, if any, need to be made.
Be aware that you may need to adapt your own attitudes if they are too extreme for your partner.
Knowing your financial personality types and discussing values, dreams, attitudes and goals can be extremely liberating for many couples. It can make the road ahead clear and will help draw you closer together. And just think how much more you will learn about your partner along the way.
Achieving your aims
Whatever your dreams and ambitions, the first step towards turning them into reality is to become a goal-setter. By following this simple, five-step strategy, you, too, can become an achiever rather than a dreamer.
1 Write down your goals
People who write down their goals are more likely to achieve them. Write down five short-term and five long-term goals, and don't forget to have a deadline for each goal.
2 Be specific
You have to know exactly what it is you are pursuing. Could you do it in six months? How much would you have to set aside? Include your values in your goal-setting.
3 Act now
Don't dally. By acting sooner rather than later, you are more likely to make your goals a reality. Research well so that you are taking steps to make your goals come true.
4 Seek help
Achievers recognise their own strengths but don't hesitate to enlist the help of others. So don't sit back. Do a course and talk to experts who can give you guidance.
5 An accurate costing
Set a budget. An accurate costing may disclose that some of your goals are unrealistic, but don't be dismayed. All you may need is some tweaking of your plan.
Honesty pays when debt mounts
If most of your friends share the same situation, you can be tricked into thinking that your level of debt as a couple is not a problem, even though a little voice inside tells you otherwise.
My advice is to sit down together and put a tick beside any of the following points that relate to you. If one partner pays the bills and the other is oblivious to your financial plight, now is the time to be honest and confess.
You are in the habit of impulse buying even though you know you don't have the money to pay for the goods.
You have two or more credit cards between you maxed to the limit.
You rely on cash advances from your credit cards to pay off your bills.
You take a cash advance from one credit card to pay off the minimum balance of another.
You sweat on your pay day to meet your bills.
You are about to default on a mobile phone payment.
You make sure you beat your partner to the letterbox to get your credit card statement.
You never knock back an offer from the bank to increase your card limit. You are even flattered that they have made the offer!
You are often threatened with disconnection notices for late payments.
A store owner hands you the phone when they ring to get a credit clearance for the birthday present you planned to buy your partner.
If you have answered yes to at least three of the above, you may have a debt problem.
If you have answered yes to four or more, you may have a serious problem and it could be time to seek financial help.
Linda Gough is a senior executive at BT Funds Management Limited. This is an extract from her book The Couples' Guide To Money, published by Unwin & Allen. It goes on sale on Friday, $24.95.
