As we age, we become more familiar with our own baseline personality. We know whether we fit into the extrovert or introvert camp. We can put a label to our core being whether that is sporty, intellectual, fun, etc. When it comes to money however, we often struggle to acknowledge and describe our own financial personality. This is frequently to our detriment.
Our money personalities consist of the values and attitudes we hold and the traits we exhibit. From a very young age, these key components are shaped and moulded by a variety of factors, including societal ideology and expectations, gender norms, religion, education, parental and family beliefs, etc. Together, these and other influences make up our financial personalities which affect the way we view and manage money. This is turn leads us to exhibit particular behaviours towards managing, spending, saving and investing money.
If you’re wondering what your money personality is and how you can harness it to bring about your 2022 financial goals, keep reading.
FOUR MONEY PERSONALITIES
Savers : If you regularly take care of the small details in your life to ensure you save the pennies to amass the pounds, you’re likely to be a money saver. You’re also apt to carry little debt and will be indifferent to keeping up with the latest trends in clothing, motor vehicles, etc. The pleasure you gain is seeing your gold coins mount up, will far exceed the joy you’ll experience in driving the latest BMW.
By nature, you may be a worrier. Anxiousness about bills and bank balances can be prevalent in your life. Probably you’ll be conservative too when it comes to spending money. These characteristics will serve you well in accumulating funds but can lead to missed investment opportunities hindering your overall financial growth.
Avoiders : Do you dislike thinking about and dealing with money? Is your cheque account often overdrawn and your bills unpaid until final demands arrive? If so, you may be a money avoider, finding the whole business of dealing with the dollars and cents overwhelming and tiresome. Possibly, your financial life is characterised by overspending and debt accumulation, due to uncatered economic events or as a consequence of paying little attention to what’s coming in and going out. On a severe scale, you may experience poor credit ratings and even loss of assets through creditor repossessions and mortgagee sales.
On the flip side, you can pay high attention and be in total control of other areas of your life. In fact, you can beat all the other money personalities to the post on subjects you feel confident and enthusiastic about, such as your physical health.
Spenders : If you spend freely and are very generous with your coin towards yourself and others, you may fit into this category. Likely as not, you’ll be a big picture person, reasonably fearless, regularly foreseeing positive end results. Chic may be an adjective others ascribe to you, due to your coin being spent on the latest fashions and gadgets.
Unfortunately, budgeting isn’t likely to be a word that features in your vocabulary, and you may well spend all you have and then some. You won’t keep up with the Jones – you’ll set the benchmark the Jones need to step up to. Not taking notice of the little details in relation to your money and transactions, coupled with a lack of fear, can lead you to incurring high debt and stepping where Angels fear to tread.
Amassers : Are you diligent, enquiring and tenacious in personality? Do you sweat the small stuff? Are you a bit controlling when it comes down to money? If so, your personality may be that of a Money Amasser. Saving and investing, keeping up with current financial news and views and increasing your financial literacy are all activities you’ll enjoy.
Regrettably, you may spend more time than is warranted analysing a situation and making a decision. This is not only due to your money personality but also your risk profile. Frequently, the sheer amount of energy you put into examining a financial situation results in paralysis, culminating in you failing to take any action and investment opportunities passing you by.
Whilst labels are handy mechanism to describe human personalities, it’s important to note we don’t fit neatly into character definition boxes. This truism is equally attributable to the application of money personalities. Accordingly, our financial personality can consist of a combination of the categories above although its likely to contain a dominant and subservient type. For instance, our money personality may predominantly be that of a money saver, but we can have a tendency toward being a money spender in respect of expenditure of a specific nature.
THERE’S MORE TO IT
Money personality alone won’t determine how you conduct your relationship with money. You have to add into the mix your risk profile as this will also have a dramatic influence on the financial behaviours you exhibit. In particular, your risk profile will signify your tolerance to and acceptance of investment volatility. Somewhere along the spectrum of conservative through to aggressive will lie your preference. This is a subject for another day but know money personality together with risk profile greatly affects the financial decisions we make, including those we fail to take.
CHARTING YOUR FINANCIAL COURSE FOR 2022
It’s my belief our money personality doesn’t preordain our financial destiny providing we’re willing to take the time to understand and work with it. Being cognisant of our money personality helps us identify the financial behaviours we exhibit which don’t serve us. These insights can lead us to capitalising on our innate positive characteristic and taking steps to avoid our predictable weaknesses. In other words, knowledge of our money personalities enables us to make necessary financial behavioural changes. This can lead to an improvement in our financial situations and achievement of the financial lives we wish to live.
Each of our journeys will be different but common to all of us is the necessity to stop and consciously thinking through a decision before we implement it. To improve our success rates we’ll also need to form a vision of the financial outcome we want to achieve at the end of 2022. From that point we can establish our goals and determine the steps we need to take together with a timeline to bring our goals to fruition. Naturally, obtaining professional help and knowledge is vital before taking any action as is regularly reviewing the progress we make throughout the year as we trek towards achievement of our vision.
We’re at the beginning of a brand-new year. It’s up to us to harness our money personalities and chart our courses. The financial outcome of this year starts with us. Even if we don’t achieve our visions 100%, by knowing ourselves, capitalising on our financial personalities and negating our fiscal weaknesses, we are more likely to arrive at the end of 2022 in a better financial shape than when we started it. Happy travelling from me.
Janet Xuccoa is a successful professional, holding commerce and law degrees. She acts as in-house general legal counsel for Greenlion and leads their trustee services division, helping people protect their wealth for themselves and their loved ones.
She has written several books on money and trusts. Her latest book, ‘Women & Money : Mastering The Struggle’ is an easy read, furthering women’s financial education and empowering them to build the financial lives they want to lead.
Read more from Janet’s Money Talk Series here.