We are all uniquely made, from our physical features to our personalities. Our physical features are based on our genes and our personalities are based on our childhood, experiences and beliefs. There is no difference when it comes to our money personality, it is based on our childhood, experiences and beliefs. Our money personalities tend to shape our financial habits and our financial future.
There are many different money personalities, the name of the personality depends on who you ask but they are all mostly similar in nature. There is the Spender, Saver, Risk-Taker, Avoider and Planner. Knowing your money personality is an important of coming up with a financial plan that works. But knowing is not the only part, understanding your personality is key to being successful in managing your finances. Let’s define the personalities first and then we can look at a couple of examples of the importance of understanding what drives your personality.
Spender– Loves to spend money. It doesn’t matter who it is for or what it is.
Saver– Loves to save money. Always looking for deals and ways to spend less than they must.
Risk-Taker– Love the thrill of taking a chance, usually high stakes chances too.
Avoider– Generally has no idea about how much money they have, have a tough time paying bills on time or even balancing their checkbooks.
Planner-prepares financially for the future and is always thinking ahead.
Keep in mind that you may have a primary personality and a secondary personality. As I mentioned earlier, it is not only important to know what your money personality is, but it is just as important to understand what drives your personality. Take for example a Spender, are you spending because in the past you couldn’t? Or are you spending on others as a way of showing you care? What about the Avoider, are they avoiding dealing with their finances because they don’t know how to manage them or because it brings on anxiety? In either of the examples knowing what drives your personality is helpful in creating a financial plan that considers your personality so that there is more opportunity to be successful. In addition to it being useful to creating your financial plan, it is very useful in relationships. Understanding each other’s personality from the beginning is key in coming up with a strategy to manage your finances TOGETHER based on very different personalities. I think a lot of times couples struggle because they haven’t talked about and identified what drives their personalities. Growing up we didn’t really talk about money personalities, but I could see the difference in my parents and their relationship with money. Their relationships with money were very different, in fact they were at opposite ends of the spectrum (for various reasons). We won’t get into the specifics, but it is much clearer to me now that I am older. Too their relationship with money hasn’t changed much but how they manage TOGETHER has. They know what drives each other’s personality and they have a strategy that works. When dealing with relationships and personalities it is important not to make either person feel bad about their personality, it is important to understand it and be able to talk about it and come to a solution that works.
What’s your money personality? Has it changed over the years? Let me know in the comments.