Understanding your money personality: how it’s like your astrological sign
Women need to understand their money personality. Think of your money personality like your astrological sign. I’m a Virgo. My strengths are that I’m practical, hard-working and loyal. My weaknesses are that I’m critical, a perfectionist and stubborn. I (try to) go about my days using my strengths to make myself better, be aware of my weaknesses, try to curb them and not let myself get in my own way.
Do you like money? Love money? Hate it? Does money make you nervous? A combination of those feelings? Everyone has a money personality. Our money personality dictates our relationship with money, our traits and attitudes: how we use it, feel about it, talk about it.
Money is something that we use everyday, and like it or not, we can’t survive without it! For something that we need and is so important, we don’t know much about it. We have subconscious feelings and habits and don’t know how to use it in a way that best fits our personality.
You need to think about your money personality the same way you think about your sign. But first you need to identify your personality.
The same way you looked up your birth date, identified your astrological sign, read the characteristics and said “Oh, that’s so me!”
You need to do the same for your money personality. As I go through different money personalities, you need to find what resonates with you. A personality may not be a 100% match, and that’s OK. You can also be a combination of a couple personalities depending on the situation. But what personality are you closest to? What qualities do you possess? How can you now use this information to help you navigate the money waters of your life?
In this blog, I will share with you some money personalities that I have identified over the years and the characteristics of them. Most importantly, how your life can become better now that you know your money personality. As you read, identify the characteristics you possess within a money personality and determine how you can use this new found knowledge going forward.
There are no cut and dried money personalities. Depending on who you consult, you will find that there are different names for the personalities everywhere. I have done the research for you! I will boil down the information to make it as easy as possible to cut through the noise to help you identify your money personality. Then I’ll share with you how your life is going to be better!
Understanding Your Money Personality: What’s Your Money Tendency?
Dave Ramsey identifies seven money tendencies. (ramseysolutions.com) Dave says that your money personality is determined by the tendencies of how you deal with money.
It is likely that you are one or the other between the two tendencies, but it can also a spectrum.
As you go through these tendencies, don’t overthink it, go with the first tendency that you identify with.
Spender or Saver.
- Easy enough. Do you spend most of your money or do you try to save as much as you can?
Nerd or Free Spirit.
- Do you budget, pay your taxes early or do you tend to not think much about the details and hope things will just work out?
Experiences Person or Things Person.
- Do you like stuff or to do stuff?
Quality Person or Quantity Person.
- Do you research and find the best item or do you prefer lots of little things that add up to the same amount of money?
Safety Person or Status Person.
- Do you like security that money can provide or do you enjoy name brand things?
Abundance Person or Scarcity Person.
- Do you find yourself giving and taking risks or holding onto your money with white knuckles?
Spontaneous Giver or Planned Giver.
- If you donate your money, do you give to anyone who asks or do you do your research to make sure your money is going to the right places?
That wasn’t so bad, right? And thankfully, there are no right or wrong answers. It just helps you understand how you’re wired. Hopefully that got you thinking. Now that you have a handle on your tendencies, let’s explore some of the money personalities.
Seven money personalities
CNBC published an article on money personalities. They identified seven:
The Compulsive Saver
The Compulsive Spender
The Compulsive Moneymaker
Understand Your Money Personality: The Compulsive Saver
The Compulsive Saver saves money endlessly. I like to call this Financial Hoarding. Their security is directly correlated with their money.
Understanding Your Money Personality: The Compulsive Spender
The Compulsive Spender buys unnecessarily, oftentimes the buying is correlated with their emotions. Buyers remorse is real with Compulsive Spenders.
Understanding Your Money Personality: The Compulsive Moneymaker
The Compulsive Moneymaker’s goal is to get to the top, financially. They just want to make more and more. More money, more problems, is not their mantra, instead they believe money makes everything better and they want others to recognize their financial success.
Understanding Your Money Personality: Indifferent-to-Money
The Indifferent-to-Money person rarely thinks about money, usually because they have “enough.” They feel like money should not influence decisions.
Understanding Your Money Personality: The Saver-Splurger
The Saver-Splurger is a combination of the Saver and Spender personality. They are smart with money, but only for so long, then they are impulsive with their spending. I compare this to a caged animal. When inside the cage, they behave themselves, but once let free, they go wild.
Understanding Your Money Personality: The Gambler
The Gambler is a combination of the Spender and the Moneymaker. They like to take big risks, but money drives their emotions. When they win big, they’re happy, when they lose, they’re depressed.
Understanding Your Money Personality: The Worrier
The Worrier is always worried about losing money. They don’t have confidence in themselves to achieve financial prosperity. They’re always preparing, but may not know what they’re preparing for.
Typically, we fall into a couple of personalities. You can be a Compulsive Moneymaker and a Compulsive Spender or a Compulsive Saver and a Worrier. It is important to recognize the strengths and pitfalls of each personality, by doing so will inevitably improve your relationship with money.
How Understanding Your Money Personality Makes Your Life Better
Now that you have identified your money personality(ies), I would like to share with you how your life can become better. Apply each of these strategies to your personality and adapt it to fit you.
- Information moderation
- Wait three days
- Spend purposefully
- Monitor your money
- Have a Spending Strategy
- Make smart investments, be diversified
- Address and understand your emotional feeling about money
Information moderation: If you get overwhelmed by financial information, whether on tv or radio, from your friends and neighbors or even just logging into your bank account. Think about why you’re getting overwhelmed. Is it because you think you’re “behind” or you are not doing enough to help yourself financially or because you don’t understand all the accounts you have.
Filter where you get your financial information from, don’t log onto your financial accounts unnecessarily and get advice from a licensed financial professional.
Wait Three Days
Wait three days. If you’re in a store and you see something and you say out loud “Ohmigod, I have to have this. This is amazing!” Is it really? You’ve lived without this item for so many years now, can you continue to do so? Step away, leave the store. If this was an emotional purchase, you likely won’t be in the same emotional state three days later. If you’re still thinking about that item, you can go back to buy it. Or are you just buying it to show your friends you got a bonus at work?
Spend Purposefully. If you need to make a purchase, do a little bit of research, ask your friends if they have purchased something similar and share their thoughts and then buy a quality version of that item. Is it expensive? Calculate cost per use. Conversely, just because it’s on sale, doesn’t mean you should buy two (and it’s likely on sale because enough people didn’t like it enough to buy it). Cheap isn’t always best but you also don’t always have to have the most expensive version if you’re not going to use the item enough to justify the price tag.
Monitor Your Money
Monitor Your money. Do you know where all your accounts are? Would it make life easier if some accounts are consolidated? (Old 401ks, savings accounts) Decide the amount you like to have in your checking account and set that as the minimum. Are you paying your bills on time?
Are you contributing to your employer’s retirement plan? You don’t need to look at every statement you receive, but at least you should know that you’re saving. What’s a number you like having in your checking account? Pay attention to at least keeping to your minimum.
Have a Spending Strategy
Have a spending strategy. You need to have an idea of where your money is going and how much you have. You don’t have to track every expense in QuickBooks and have a detailed monthly budget if that is not your personality, but you also can’t stick your head in the sand. When your credit card bill is due, look at the expenses. Are there recurring expenses that you don’t need? Are you spending just as much as you’re bringing in? Do you have a strategy to save?
Make Smart Investments
Make smart investments, be diversified. You don’t have to actively trade your accounts and get in on the latest stock that is going to boom. Just invest, in general. Make sure your 401k is diversified, and don’t put all your money in bitcoin. If someone is telling you their investment is the latest and greatest and will make you a millionaire, run- don’t walk -away. If you want to make sure your investment is appropriate, talk with a Financial Advisor.
Address Your Feelings About Money
Address and understand your emotions and feelings about money. Once you identify your money personality, ask yourself why you are that way? If you are a Compulsive Saver, why is that? Did you not grow up with much or did you hear your parents argue about money? If you’re a Compulsive Spender, again why? Is Spending filling a void in your life? It can be exhausting to be a Saver-Splurger, and being indifferent, although freeing, can leave you ill prepared for the future.
How Understanding Your Money Personality Can Make Your Life Better: Build a Financial Foundation
Do all of these financial life improving ideas sound great, but you don’t know where to start? My Financial Foundations program addresses these items, plus more. Understanding your money personality is just the baby step in building a solid financial foundation for you and your family.
If you would like to talk more about your financial personality and how to create a plan that best fits your personality, schedule a call with me. I create plans that take into account my client’s financial personality, their risk and goals. Financial planning is not a one and done event, like life, our finances and how we feel about and what we need from money is ever evolving. So, let’s talk.