I’m currently reading Gretchen Rubin’s Better Than Before: What I Learned About Making and Breaking Habits–to Sleep More, Quit Sugar, Procrastinate Less, and Generally Build a Happier Life. Many of the principles in her book can translate to the world of personal finance. Today I’m writing specifically about her Four Tendencies framework.
The idea behind this framework (which is also the subject of her latest book) is that we all face two sets of expectations: outer and inner. Outer expectations are those placed on us by others, such as family, friends, bosses, and society in general. An example would be a due date for a big work project. Inner expectations are those we place on ourselves, such as setting a New Year’s resolution.
How she describes the framework in her own words:
Depending on a person’s response to outer and inner expectations, that person falls into one of four distinct types:
Upholders respond readily to both outer expectations and inner expectations
Questioners question all expectations; they meet an expectation only if they believe it’s justified, so in effect they respond only to inner expectations
Obligers respond readily to outer expectations but struggle to meet inner expectations
Rebels resist all expectations, outer and inner alike
If you want to know your tendency, she has a quick quiz you can take on her site.
I am an Upholder with Questioner tendencies. If I commit to something, I don’t have problems sticking to it. Most of the time I’m a rule follower, but sometimes I question external expectations if they don’t make sense.
Some observations on this framework and it’s intersection with personal financial habits:
- FIRE folks are impressively goal oriented; I would guess that most do not have a hard time meeting inner expectations, or if they do, they have figured this out about themselves and created hacks to make themselves accountable.
- I envision the most hardy FIRE people – the Mustachians – as Questioners. They challenge societal expectations. You don’t have to work until you’re 65 (or even 55!)! Of course you can save 70% of your income! (or maybe they are Rebels?)
- According to Gretchen’s survey results, Obliger is the most frequent tendency. External accountability helps obligers meet goals. Just as an obliger might benefit from hiring a personal trainer to form an exercise habit or joining Weight Watchers to lose weight, an obliger seems like a good candidate to work with a financial planner who will help keep him/her accountable to financial goals. Alternatively, sharing goals publicly (such as on a blog) or with a trusted friend could also serve as a way to provide accountability. Or perhaps the Frugalwoods Uber Frugal Month Challenge might create the sense of community that would inspire an obliger?
What is your tendency? How does it impact your financial habits?