Some folks are just better with money than others. In other words, they are born “money managers”.
And, before I offend anyone – let me offer a few reasons for why I believe this to be so.
The prefrontal cortex
I recently heard a psychiatrist lecture about addictions and why some people are more susceptible to them than others.
One of the main reasons for folks falling prey to gambling, drug, alcohol (and dare I say, spending/debt) addictions is due to the prefrontal cortex part of our brain.
Our prefrontal cortex is in charge of “executive functions”. As Wikipedia lays it out:
[it helps] differentiate among conflicting thoughts, determine good and bad, better and best, same and different, future consequences of current activities, working toward a defined goal, prediction of outcomes, expectation based on actions, and social “control” (the ability to suppress urges that, if not suppressed, could lead to socially unacceptable outcomes).
You may have heard that the underdevelopment of the prefrontal cortex is why many teenagers often make poor decisions – and tend towards being impulsive/erratic.
This “underdevelopment” is also a reason given to why people become addicted: the region never fully develops – or doesn't “kick in” to override compulsive actions.
I'd wager the prefrontal cortex is a contributing factor to many who find themselves struggling with impulse spending and mismanagement of their funds.
A natural gift
On a few occasions, I've had the pleasure of watching Tiger Woods smash 300+ drives and consistently fire his golf ball at the flag time and time again. It is a thing of beauty.
He has a natural, God-given gift. Sure, he has worked long hours to hone that gift and become one of the best to have ever played the game – but what lies underneath it all is a “supernatural” ability.
We've all seen natural gifts / talents of others – even ourselves.
These thoughts lead me to accept that some are more naturally gifted with money than others. Why is it that one person (early on in their life – when there are no obligations) saves their money while the other spends it all like they're in some shopping spree competition?
Some might say this is just “learned behavior”. But, I could point to many folks who grew up with frugal parents – saw how they saved/spent their money – but did the exact opposite (I'm in that camp). :)
Is there any hope?
Many of us learn the hard way through piles of debt, bounced checks and overdue notices to finally manage our money better.
I'm living proof that you can start out poorly – having poor money inclinations – and learn to do it better.
What do you say? Is managing money well something we are naturally born with?