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Your Money Temperament and Why it Matters

Whether you’re aware of it or not, you do have a money temperament. Everyone does. It’s the way you naturally think about, behave, or react to money. To loosely assess your money temperament and to have a little fun with this, consider the following premise then choose the response closest to what you would do.

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Let’s  say, for illustration purposes, that you’re driving an old clunker of a car that’s costing you dearly in repair bills and bailing wire to keep it running.

By some stroke of dumb luck, you are the proud owner of a $20,000 winning lottery ticket. You cash it in, determined to buy a car. What do you do?

a.) Make a $20,000 down payment on your dream car.
b.) Pay cash for a $20,000 previously-owned car.
c.) Exercise extreme patience, flexibility, consumer savvy, and negotiating skills to find a dandy used, late-model, low-mileage, well-maintained car for $10,000 cash, then stash $10,000 into a savings account.

Putting aside your humble columnist’s obvious bias, let’s analyze the options.

Twice the Price

If you responded to option A, you are prone to live your life for twice the price. You don’t mind paying interest and taking on monthly payments because in your mind, that’s the way to get what you want. You’re just doing the best you can to maximize your income so you can drive a reliable car.

You depend on consumer credit to bridge the gap between your income and your expenses. For you, it’s easy and convenient that way.

Because you pay double-digit interest rates on your revolving debt, you end up paying twice, or more, for the goods and services you charge, but you don’t think about it that way. You live for today, assuming that tomorrow will somehow take care of itself.

Full Price

If your response was option B, you are okay with the full price. When you have money, you don’t hesitate to spend it. You’re a cash buyer, not a wheeler-dealer, and you prefer to just pay the asking price. No hassles, no problems.

You have a cash mentality. You pay as you go. If you like it you buy it. If you don’t, you wait.

You don’t pay attention to prices that much. As a result, your income matches your lifestyle. You don’t live beyond your means and never carry credit card debt. Still, it takes every penny to pay the bills. You live from one paycheck to the next. It seems like you can never get ahead.

Half the Price

If your choice was option C, your temperament is geared to live your life for half the price.

You enjoy the challenge of living below your means, you try to never pay the full price. You get a thrill whenever you beat the system. You earn more than you spend and save the difference.

You know your prices, you’re patient, and know how to pay less than the going price for just about everything. In fact, you pride yourself on living your life for half the price.

You live an understated lifestyle and find great satisfaction in being prepared for the unexpected. You live below your means and that means contentment, joy, and financially stress-free life.

Back to Reality

Of course, no one pays twice-the-price for everything nor can anyone be assured of never paying more than half. My point is that with every spending opportunity comes a choice. You can choose to go into debt, you can determine to not spend more than you have or you can work hard to pay half the price.

We are not bound by our temperaments. The ways that we naturally think about, respond, and behave to money and myriad other things in life are simply our first, natural responses.

We have control over those thoughts and behaviors. Sometimes our responses are like bratty kids who need some adult supervision and discipline.

Toil and Trouble

A couple of hundred years ago, Adam Smith, economist and philosopher, wrote in Wealth of Nations,

“The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.”

I’m not trying to fool you into thinking it’s a simple thing to live below your means. I’ll admit that for some  of us myself included, the natural response is that its easier to just buy what you want and then switch to credit when you run out of money. That’s as easy as walking downhill. Or rolling off a log.

There is a component of toil and trouble in half-price living, and at times it is more toilsome than the other choices. In some ways, living below your means is like having a part-time job with this job description: plan, research, wait, negotiate, strategize, compare, and consider.

What better part-time job could you hope for than one where you set your hours, agenda, and pace and you’re the boss? The more toil and trouble you choose to contribute, the closer you’ll come to living your life for half the price. And don’t forget that the “wages” are tax-free because every dollar you manage not to spend is a dollar on which you have already paid taxes.

Toil-and-Trouble on Wheels

Remember the $20,000-for-a-car question? Let’s revisit the three options, taking into consideration the toil-and-trouble factor.

Car Purchase Option A

Buying the new car in option A took all of about one hour. It was simple and convenient and, given the fierce competition among new car dealers, probably quite pain-free.

The salesperson was more than willing to handle every detail and made the transaction so simple. You didn’t even have to think about the full price. Just knowing you could handle the monthly payment gave you a sense of satisfaction. No toil, no trouble.

Car Purchase Option B

Paying cash in option B required diligence to locate the car. Because this was not a new vehicle, add in the time and expense of a trip to the mechanic for a checkup and inspection.

Paying a lot less in the long run for a good used car was offset by the toil and trouble this buyer was willing to contribute to the deal.

Car Purchase Option C

Finding a cream puff of a car for just $12,500 in option C was harder work. It took weeks of patience, test-driving, calling, and networking. But all of the toil and trouble paid off when this amazing low-mileage, single-owner, pampered car turned up.

Now let’s also consider the additional “paycheck” this buyer received in exchange for his toil and trouble: $5,000 in the bank!

Half-Price Mindset

While “half-price” refers to the cost of things, half-price living is an attitude, a new way of thinking, a learned behavior. No matter your money temperament. Those who choose this—mindset no matter their natural money temperament—see a bigger picture. They exercise personal discipline and respect for the money they are entrusted to manage.

I want you to get excited about what can happen in your life when you begin to live below your means. And if you’ve already begun the journey, I want to inspire you to do even better.

And now for a shameless self-promotion ALERT:




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3 replies
  1. Holly O says:

    I have won money like that (multiple times ). FIRST thing you do is pay taxes on it!!! You should not spend it all as you will get a 1099 or a W2-g. I won $40,000 from Butterfinger ( yes the candy company) I put away $10,000 for taxes ( I pay quarterly ) Then I went and negotiated at great deal on a new ( yes I only buy new but sales people hate me – no extras, no pin stripe, window coat etc ) car and traded in my 12 year old car that had over 200,000 miles for double what the blue book was – Paid cash ( actually cashiers check ) then still had $6,000 left over. I have won $$$ multiple times – ALWAYS pay the Taxes first!! Having that car paid off was a great as it happened right while retiring . Always pay off anything you have recurring payments on – Debt free with money in savings is a wonderful feeling.

  2. Sheri B. says:

    I paid full price on my 2021 Jeep Cherokee Trailhawk (4×4) last yr with only 11 miles on it and they said that was taking off the truck and putting some gas in.
    I love it. It is so safe going up the mountain’s at Christmas time to be with my sister. She always has Black ice at the top of her street. A big patch of black ice. But with my Jeep, I can drive right over it and not slide!!!! Plus it has room for my 6’8″ adult son to ride with me up there.

  3. Charlie O. says:

    My wife and I recently celebrated our 50th wedding anniversary. Several months ago we purchased a 2008 Lexus with 127,000 on it for $5000. It will be probably be our last car. Until then, in over 48 years we had paid a total of about $11,000 for all of our cars. We have always lived below our means, and the absence of financial tension, and the flexibility it affords has been a blessing. We save money in dozens of ways that enables us to enjoy vacations, a paid-for house, and a comfortable standard of living. In spite of the fact that our income has always been at best modest, we are able to have whatever we want. Fees and interest are poor ways to spend money.


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