Part 1: Getting to know yourself will set you on FIRE — Financially Independent, Retired Early

I’m really pleased to welcome Rosemary as a guest writer to the Tosca Money team. This will be the first of a few articles Rosemary will share with us as we dig in to who we are and what financial strategies might work for you.

I’m a rebel. Read on, it will make sense…

Welcome, Rosemary

Rosemary Fotheringham lives in Portland, USA

My name is Rosemary Fotheringham, and I’m on the path to Financial Independence (FI)! Over the past two years, my husband and I have totally overhauled our spending habits in an effort to reduce our expenses and pay down debt. We were making decent money but spending even better money. It was a little ridiculous, like a £800-a-month grocery bill — for two people. We just weren’t paying attention! We’ve been able to reduce our expenses and pay down about £15k of debt, and eventually, that money that goes to debt will be able to go to ourselves in the form of savings, with the hope of being able to reach FIRE (Financially Independent, Retired Early) in the next 10 years or so.

I want to share a personality framework with you that completely changed the way I see the world. (In fact, I talk about it so much that my husband jokingly has a drinking game, where every time I mention the creator of the framework, Gretchen Rubin, he has to drink.) The key is that knowing your own personality type can be a crucial element in making lasting habit change, such as saving money towards a goal.

The Framework

The framework comes from the author and podcaster Gretchen Rubin. She has developed what she calls the Four Tendencies framework.

She had lunch with a friend who made a passing comment, “When I was in high school and on the track team, I never missed a practice. But now, I can’t get myself to go running. Why?”

That conversation stuck with her, and she spent years thinking about the answer and developing a framework to help explain it.

According to the Four Tendencies framework, people are divided into four categories based on how they respond to what Gretchen Rubin calls internal and external expectation.

“Internal and external expectation” might sound little nebulous at first, but think of internal expectation as something you decide you are going to do, or that you feel you should do. It could be something like a New Year’s Resolution, or a decision to go for a walk each morning. External expectation is more along the lines of something that someone else, the company you work for, or society as a whole, wants you to do or thinks you should do. It could be something like a request from your spouse, a work deadline, or peer pressure to buy that shiny new car so you can keep up with the Joneses.

Figure out who you are

People pretty much fall firmly into one of the four categories:

Upholders will uphold both internal and external expectation. You give them a checklist of things to complete and a deadline, and they knock it out, no problem. You’ll never have to remind these people or follow up. Examples of Upholders: Hermione Granger

Obligers will stick to external expectations, but have a difficult time following through on internal expectation. If they want to go running (like the track team friend), they will be able to stick to it when there is external accountability, like a scheduled time and place where other people are expecting them, but if no one is counting on them, they’re much less likely to follow through. Examples of Obligers: Katherine Heigl’s character in 27 Dresses, Cameron from Ferris Bueller’s Day Off

Questioners will follow internal expectation, but only the external expectation they believe makes sense. If something doesn’t make sense to them and the way they see the world, or it seems like an arbitrary rule, they won’t do it. Questioners will ask, “Why are we doing it this way?” and the most infuriating answer anyone could give them is, “Because this is the way we’ve always done it.” (I heard a story recently that Elon Musk once kicked a person out of a meeting for giving this answer to that exact question. Elon Musk is definitely a questioner!) Examples of Questioners: Elon Musk

Rebels resist both inner and outer expectation alike. If they had a catchphrase, it would be “You can’t make me, and neither can I.” They can be incredibly effective because they can do anything they want to do, but they can cause some frustration to those around them, because they will also resist anything they don’t want to do. They are strongly motivated by their own view of their identity, for example, “I am the type of person who works out regularly and takes care of my health and my body, so I’m going to go to the gym.” Examples of Rebels: Steve Jobs, Sherlock Holmes in the BBC series, Katniss from the Hunger Games

Obliger and Questioner are the biggest categories, and Upholders and Rebels are relatively smaller groups. You can find out which one you are by taking her Four Tendencies Quiz.

Real world examples you can relate to

So, here’s where this framework gets powerful: when you know your tendency, you can tailor your approach to habit change, such as saving money for a trip or for a house deposit. Here are some examples:

Upholders will be able to “uphold” the habit of saving pretty easily. If you’re an Upholder, you might do well with a schedule on the calendar and a predetermined amount to save each pay day. You can make a checklist for yourself and relish the feeling as you “check off” each payment on the calendar towards your goal!

Obligers require external accountability structures. In this case, saving with friends towards a common goal like a group trip is a perfect structure, because you know you have people counting on you, and you don’t want to let them down! Obligers will also do well with an accountability partner, often another Obliger, who also has a goal to save. Can you think of one?

Questioners will be able to create a habit if it makes sense to them and fits their internal compass. If you’re a Questioner, consider the reasons why you want to save for this trip or item. Perhaps calculate the compound interest and see how much you’ll have in 30 years if you start putting 10% of your income into a retirement account or ISA now, so you can see the maths.

Rebels will be able to do anything they want to do, but will resist if it’s something they feel like they are being forced to do, or if it’s something they know they should do but deep down don’t want to. They love to challenge the status quo. If you tell a Rebel, “You can’t do [Fill in the blank]”, they will say, “Watch me!” and then do it. If you’re a Rebel, the idea of a budget at first will seem restricting, but the key will be to reframe it in a way that appeals to you as a Rebel. For example, you could say, “I am the kind of person that accomplishes the things I’ve said I would. I’ve always said I was going to take a week-long trip to Croatia, so now I’m going to make that happen.”

Help me to help you

Now, what do you do if you are the spouse, friend, or parent of each of these tendencies and you want to help that person achieve their savings goals, or if you’re all saving for an item together?

Upholders want clearly defined expectations, and won’t need any hand-holding. If you’re saving with an Upholder, simply agree on a clear, well-defined checklist or schedule for saving, and they will get their part done.

Obligers need accountability. They will need regular check-ins to make sure they are on track. If you’re saving with a group of people towards a goal, you can have meetings every week or month where you track the progress on your goal. If you know an Obliger who has a savings goal that doesn’t involve a group of people saving with her, help her find her an accountability partner she can communicate with regularly so they can support each other in reaching their goals. It will be most helpful if the accountability partner is another Obliger, since the other tendencies do not need this support to achieve their goals and the relationship will be lopsided.

Questioners will need you to appeal to their logic and show them why saving matters. For example, you can suggest that if you reduce your expenses by a certain amount, you’ll be able to pay off debt in a few months, and show them the math to prove it. It will help them to see facts and figures. Sending them articles or books with clearly laid out arguments will help convince them. They will not respond to expectations that seem arbitrary to them.

Rebels only want to do what they want to do. They hate being told what to do, so trying to help them in the way you’d help an Upholder (clear expectations), Obliger (accountability), or Questioner (logic) will backfire. However, they will respond well to appeals to their view of themselves. They will also respond well to being given the choice to allow them to make their own decision. When they actually want to do something, they are unstoppable. Instead of nagging, give them InformationConsequencesChoice. As an example, “We would really love you to have you with us on this trip we’re all taking [Information]. To save the money, we’ve all agreed that anyone who wants to go on this trip will contribute to this joint account equally over the next few months so that it’s fair to everyone, and only people who contribute their full amount will get to go [Consequences]. If that seems like something you would be willing to do, we’d be glad to have you, but of course it’s your decision either way [Choice].”

What’s next

In the next articles in this series, we will dive more into each of these Tendencies, looking at examples of people from each Tendency and showing the strategies that helped them to achieve their savings goals so you can apply them to yourself.